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Outflank Competition on Amazon with Niche Marketing

Let's face it: You just can't quite compete with retail giants. Amazon.com has the market monopolized, cornered, and in all other ways just about wrapped up. The competition is just too fierce for an independent seller to make much headway.

That's why many small to medium-sized businesses are carving out their own niche markets. Niche marketing can be a solution to the problem of standing out in a crowded, competitive field — a way to have your voice heard over the cacophony.

There are more than 2 million third-party sellers on Amazon alone, and a comparable amount on eBay as well. Today we'll examine the statistical difference between the market demand focused on niche markets and major supplier marketing, which is generally more focused on mass appeal.

The gap between the two is where a small business can make a big splash.

Popular Products vs. Niche Markets

Let's look at some examples of popular product categories and compare the number of listings on Amazon and eBay. This will represent the level of competition. Then we'll compare those numbers to more focused search queries in an effort to see how niche marketing can affect the audience you attract.

Basketball Shoes

Here is the Amazon result for the search query "basketball shoes."

As you can see it's a popular category with more than 25,000 listings. The results on eBay are even greater.

A whopping 163,407 listings. How could you possibly attract consumer attention with all that competition, much less compete on price with sellers who purchase vast quantities of shoes at wholesale prices?

Now let's look at what adding a single word does to the number of results.

Nike Basketball Shoes

Here are the Amazon results:

And eBay results: 

The addition of a four-letter word reduced the results for each listing by nearly 15,00 and more than 60,000, respectively! Just imagine if you added "Air Jordan" to your query. You'd have a highly focused, and highly profitable niche listing.

But maybe you're concerned that the lower number of listings could be due to a smaller amount of demand. Put that thought right out of your mind, because the basketball shoe market has never been hotter. The total sales for this category are up by 20 percent in the U.S., reaching a total of USD $4.5 billion in 2013.

If you're still not convinced, you can also track the search volume for basketball shoes.

There's a pretty steady trend of spikes and valleys for these shoes every year (right around the beginning of each new NBA season), but the number of searches within the spikes and falls is rising steadily as well.

Now let's examine how this overall traffic compares with some more focused keywords.

Examining the graph even briefly brings to light a few insights. First, you can see that there are significantly fewer searches performed to find niche products. Second, the demand is consistent and complementary to the overall traffic.

Finally, the graph clearly illustrates that there is a viable niche market here, one that's brought on by a need for focused footwear that isn't currently in great supply relative to the larger shoe market.

In other words, you can ride the momentum from the overall demand while appealing to a niche market simply by choosing your product's keywords carefully. Although the niche market is searching and buying in lower volumes, it can still represent a powerful flow in your revenue stream.

This brings me to my next point.

Niche Marketing is Less Expensive

In addition to there being viable demand and an opening in the online marketplace for niche products, it's also cheaper to purchase PPC ads and rank for niche keywords in popular search engines such as Google or Bing.

As you can see according to Traffic Travis, the more generic the search term, the more expensive the CPC (Cost Per Click) of an online advertisement.

The most expensive of the keywords listed are "men's basketball shoes," weighing in at a hefty USD $1.13 per click, followed by "wholesale shoes" which came in at a more reasonable, yet still costly, USD $0.74.

Compare this with more focused keywords, which are cheaper and still come with high search volumes:

  • "wholesale nike shoes": $0.54; 8,100 monthly searches
  • "wholesale jordans shoes": $0.50; 1,300 monthly searches

This is an incredible boon to small businesses, who might not be able to invest as much in their marketing budget. They can certainly afford to invest in an effective niche marketing strategy.

Finding Niche Markets

Now that you know how effective niche marketing can be, let's talk about how you might go about finding a niche of your own.

There is really only one strategy for finding a niche: research, research, and more research. Even if you're looking into a niche that you care and know plenty about (following your passion, so to speak), you still need to back up your enthusiasm with effective and comprehensive market research.

Here is a list of tools to help you do just that.

  • Google Trends: This tool reveals global demographic information and compares search trend volumes over time and across locations.
  • Google Scholar: A search engine for white papers written at colleges and universities around the world. It's a massive resource for studies and collected data that can be extremely relevant to your market research.
  • Government websites: Identified by the .gov extension, these sites can offer all sorts of information about different demographics, industries, and markets. Here are a select few to choose from:
  • Pew Research Center: This is a powerful publisher of a variety of facts, figures, statistics, and trends.
  • SaleHoo Market Research Lab: This is the SaleHoo directory's market research tool, which collects data based on aggregate eBay listings and offers market relevant metrics to aid you in your research.

Want to use this newfound knowledge to outflank your competition? Learn how to find your niche and start performing your market research with the SaleHoo's Market Research Lab.

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