Starting an online business has been a hot topic for the last few years. More and more people are trying out their luck to see if they can create something sustainable but there’s one thing that can make it infinitely harder than it should be and that is targeting the wrong niche. Focusing on the wrong niche can delay your success for years and can be expensive. Luckily, there are some signs that you can look out for to avoid that and start your online business in the right way.
Why it’s important to pick a niche for your online business
An online business needs to have the credibility to succeed. If people don’t trust the products or services you provide they aren’t going to be willing to part with the money in their wallet in exchange for them. It’s easier to gain that trust by being very knowledgeable in one thing than being a jack of all trades and a master of none.
This is why it’s important to pick a niche and revolve your business around it but as I said, just picking a niche is half the battle. Picking the right niche is what will help you achieve your goals in the shortest way possible.
Below are 5 signs you’re focusing on the wrong niche.
1. Your niche is based on a trend
Most people go into an online business with the idea of creating a sustainable business for the long term and if you’re in this group I’d be very wary of niches based on trends. It’s very tempting to pick a niche based on it blowing up but just as fast as it has become popular it can go back to being almost non-existent.
An example of such a niche was hoverboards. At its peak, I have met people that made up to $20K a month just in affiliate sales and 2 years later barely make $200 a month. That doesn’t mean you can’t take advantage of these opportunities but know what you get yourself into if you do and have a long-term plan in place.
2. You’re competing with huge businesses on every corner
I don’t think it’s necessarily a disaster if there’s already an authority in your niche because there’s a lot of money to be made in being the number 2. For example, take Pepsi Cola. With all of Coca-Cola’s success, Pepsi is doing fine but this doesn’t mean you can do that in every niche that is dominated by other businesses. If you’re constantly trying new angles to appeal to your niche but your competitors keep invading those spaces and are capable of taking all the attention away from you, it might be time to look at picking another niche.
“The problem with competition is that it takes away the requirement to set your own path, to invent your own method, to find a new way.” – Seth Godin
3. You picked it solely for the money
It’s important that the niche you pick is profitable but if money is the only reason for picking a niche you’re going to have a hard time for multiple reasons. I always say the steps to creating an online business are simple but that doesn’t mean it’s easy.
The moment money is your main goal for picking a specific niche and you don’t start earning at the pace you expect, it’s going to be easy to lose motivation. The most profitable niche are also the ones that tend to be the hardest to succeed in because people flock to these niches all thinking the same thing: “…This is where I can make the most money…”
As a result, they often run into sign #2 as a problem. What they don’t realize is that there is a lot of money to be made in the smaller niches and it’s a lot easier to obtain.
4. Most people in your niche are broke
An online business needs to be profitable to sustain itself. Entering a niche that is known for having people that don’t have money isn’t the best idea. It often limits how much you can ask for your products and/or services and it decreases your chances of making upsells to increase your profit. This doesn’t mean you can’t make it work but it often takes the same amount of energy to target niches with people that are willing to spend more money.
5. You have to convince your niche to buy products
We often believe sales is this magical thing where if you’re an expert, you can say a few magical words and people will become obsessed with your business but this couldn’t be further from the truth. In reality, when doing sales, the majority of your leads will say no. That’s why even the largest B2C businesses still convert under 50%.
Sales is mostly showing people that are interested, enough context to make a purchase and handling objections. The moment you have to spend a lot of energy on every sale of a product that is commonly used by that particular niche, it’s time to get back to the drawing board.
How to deal with these problems
When you come to the conclusion that you picked the wrong niche the first step doesn’t necessarily have to be picking an entirely different niche. Depending on the situation, you could also narrow down your niche to a sub-space.
For example, let’s say you picked the niche personal development for your online business. In this niche, you’d be competing with people like Tony Robbins, Tim Ferriss, Patrick Bet David, etc. Not a good place to be.
Here are some examples how to narrow down that niche:
- By location (Personal development in a certain city)
- Demographic (Personal development for kids with anxiety, physically disabled people)
- Activity (Meditation, productivity Leadership, communication )
Narrowing down a niche can open thousands of doors you normally would never think of.
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