Why I Like Competitive Niches

Choosing a niche is one of the first things you need to do when starting any kind of business whether it be a brick and mortar business or an online business. Successfully choosing the right niche and business to start can make a big difference in your likelihood to succeed. A lot of people that I run into seem to think that it is a good idea to pick a nice little niche where there isn’t a lot of competition. I like going after competitive niches. Here’s why…

Wrong Mindset #1 – Smaller niches have less competition, so therefore I am more likely to succeed

It’s true that smaller niches have less competition, but it’s also true that there is less demand for the products or services in these niches. When I started my first e-commerce site, I decided to go after the baby shower niche. I had considered the wedding niche because it was much bigger, but was afraid to get into that because of the high level of competition.

In retrospect, perhaps that was not the right way of thinking of things. In truth, it’s hard to say whether I would do things differently if I could go back in time. The baby shower business has kept me working for myself for a long time, but I’m dependent on less keywords on Google and there are less places to advertise to get targeted traffic.

So even though it might be way harder to rank for wedding related keywords on Google, like “wedding invitations”, there are so many more less competitive keywords that can be targeted.

And more recently as I got into web design (super competitive – trust me), I have found that there are many options for getting work. This is due to the high demand for website design. There are plenty of places where you can place advertisements, apply to jobs, go to networking events, etc.

Wrong Mindset #2 – I can’t possibly win against more powerful, experienced, and better funded competitors

Another thing that holds people back from competitive niches is the thought of being unable to compete against more established and experienced players. The important thing to keep in mind is that you don’t have to be number one.

You just have to be good enough to get your piece of the pie. And there’s more pie out there in bigger niches.

Another thing to note is that in many businesses, particularly local businesses, the competition is not extremely marketing savvy. So if you get good at sales and marketing, you may actually have an edge against more established businesses.

Caveats

Of course there are a few things you want to keep in mind. As you go along, you should try to figure out ways to differentiate yourself from your competition or at least how you are perceived by your prospective customers. Finding out tiny ways to make yourself stand out or appeal to a slightly different crowd within your niche can be a good way to create a foothold in a competitive niche.

Some simple ideas are to figure out what they are not doing that they should be doing. What are some of the things that their customers complaining about? Ask people for their honest opinions and read reviews on the review sites.

Also, don’t start a business that competes against large companies like Walmart, Best Buy or Amazon. Unless you can niche specialize in some way, stay away from directly competing with big retail corporations.

Ultimately, the point is this – a lot of people pick niches that are just way too small or too hard. Don’t let fear of competition stop you from picking a profitable niche.