Learning Niche Marketing: What are the Advantages And Disadvantages of Niche Marketing?

There are pros and cons to every decision in life and learning niche marketing is no different.

Unfortunately, this profession is often hyped by those who promote it to the point where it might appear to be the proverbial pot of gold at the end of the rainbow that is just waiting to fall into your lap at the snap of your fingers.

For some it does in fact become a very lucrative means of income. For others it provides a stable income, and for some, no income at all.

When learning niche marketing, think of it as a change to another profession, a profession where you are in charge of the business. Like every other business owner, whether online or off, it will require time, effort, investment and education to achieve success.

Having said that, let’s take a look at some of the advantages and disadvantages of working in niche marketing online.

Advantages Of Niche Marketing

1. Market Focus

Niche marketing focuses on a small segment of a given market as opposed to the mass marketing with which we are most familiar. Because of this focus, you have the ability to get to know the consumer that you are targeting a great deal better. With this knowledge, you are better able to provide content that is helpful, build a reputation, and find products that this segment of the market is looking for.

2. Targeted Investment

If you have done your homework and taken the time to get to know your niche consumer, you are aware of the issues and problems that they are looking to solve. You are also aware of the language that they use when discussing these issues. With this knowledge in hand, you are able to target your investment of time and capital in a manner that speaks to this type of consumer in the language they most commonly use.

This ability allows you to invest time in creating your online presence through a website, blog, content, and article composition in a manner that will be accepted and seen as authoritative by your intended audience.

If you are investing in PPC advertising, you will know the language they tend to use when using a search engine to find what they are looking for. This allows you to target your ad copy and keywords to the needs of that specific niche and the potential customers within that niche.

3. Increased Income Potential

While it is true that you will be going after a smaller group of people, the people in this group are far more likely to be buyers for the products you are promoting. Mass marketing works on the premise that if enough advertising is thrown out there, someone will be attracted and buy the product.

This school of thought can quickly drain the wallet of an online niche marketer who has limited resources of time and funding to work with, particularly if they are using PPC as a means of drawing in potential customers. Targeted PPC ads are far more likely to draw in a paying customer than ones that are setup to address general markets.

Disadvantages Of Niche Marketing

1. Smaller Market Share

Although targeting a smaller audience is in fact a major advantage for the niche marketer, it can also be a disadvantage. The disadvantage occurs when the market share is too small to produce an income that is substantial enough to support the income needs of the niche marketer. For this reason, many niche marketers, if not most, will be working in more than one niche at a time to increase income generated by their efforts.

2. Competition

Even if you were the first to discover a lucrative niche, over time, others will want in on it as well and you will need to increase your efforts in order to maintain a reliable income from that niche.

If you are one who is trying to break into a niche where you have competitors, it will take time and effort on your part to build up your reputation within the niche and to get your ads and content listed at the top of the search engine results.

Higher competition will also mean higher rates for clicks in your PPC advertising. Niche marketers are encouraged to diversify their efforts into many niches to help out when markets become mature and too competitive. Having only one niche is equivalent to putting all of your eggs in one basket.

3. Cannibalization

Cannibalization is a term more frequently heard of in the mass marketing industry, however, it applies to niche marketing as well. Cannibalization occurs in a business when it releases a new and improved version of a product and as a result, the value and market share of a pre-existing product decreases.

In the world of niche marketing, and the world of online business as a whole, there are newer and better products constantly being released. A dramatic example of this would be the technology changes between the time when videocassette recorders ruled the market place and their subsequent replacement in that market share by the DVD recorders of today.

4. Its A Business

While this may seem like an obvious statement, it is rather surprising how many people fail to realize that niche marketing is a profession and a business. It requires capital and commitment to grow and like any other business, it also requires customer relation skills, financial management and constant learning.

If you want to use your niche marketing as a business for tax purposes, you will want to maintain separate banking and accounting information at the absolute minimum. Failure in this area could have your application for business expenses denied at tax time.

As well, because it is a business, it will be important for you to stay on top of any licensing requirements, regulations such as FTC regulations, and tax collection and remittance requirements. Ignorance is neither bliss nor accepted as an excuse for not following laws and regulations within the industry. It won’t cut you any slack with the tax department either if they decide this is just a hobby for you and not a legitimate business.

If you are thinking of learning niche marketing and developing a business around it, it is important for you to be aware of both the advantages and disadvantages of niche marketing rather than just the hype that is more commonly seen on the Internet.

With this information in hand, you will be better prepared to make an informed decision as to whether niche marketing is what is best for you and to meet its inherent challenges head on.

To Your Success,

SherryD
http://www.wbobr.com