Vertical Markets
It’s not generally realistic to think that you can compete with existing internet retailers within established mainstream markets. However, there are niche markets that could be taken advantage of… Amazon sell a huge range of products but because of their diversity they don’t specialize in any particular field. This creates areas in the market where someone who is willing to specialize in small sections of a market and really focus on every aspect of that niche can attract sales from discerning customers.
Because a vertical market is often a niche or smaller section of a larger market there is no reason why you can’t concentrate your initial efforts on that niche and grow your company by expanding into different areas of the bigger market in a timely and manageable fashion.
For example, if you really must sell books, don’t take on Amazon they are very competitive, they have massive buying power, excellent infrastructure and one of the best weighted sites on the internet today… Look for a specific/vertical market and sell books targeted to that market. i.e. maps and atlases, concentrate on that one field, find the expressions people use to find them, advertise in the locations where people interested in maps go, communicate on the forums where people interested in maps talk.
Once you have the map and atlas niche completely covered, find another niche and concentrate your efforts on that niche in much the same way. In my opinion it’s an advantage if you can find different but related niches to move into, there will be less product learning involved, the product can share the same web-space and existing customers may also be interested in your new product lines.Â
There are also opportunities in some of the diverse markets; I once discovered a site that sold cannabis paraphernalia. While you couldn’t describe me as a pothead, I must confess to being amused by the whole concept. Here you have an idea that has:
- Good mass appeal (there are plenty of pot-smokers out there!)
- A very inexpensive, importable product range
- No corporate competition (no blue-chip would be seen dead with this product range)
- Limited general competition
- No support and limited returns (what can go wrong with a pot-pipe or bong!)
- Easy to optimize search expressions (no one else wants them)
- Low Cost-Per-Click and Pay-Per-Click Listings
- Completely legal (Its not illegal to sell cannabis paraphernalia)
I went on to discover that two people ran the whole operation in their spare time, the company had a turnover of $600,000 and achieved very healthy gross profits of around 50%. Very nice work if you can live with the stigma!
OK, this maybe a little extreme, I’m not suggesting that you get involved in product ranges with dubious moral value, but I hope you can see my point. There are still specific vertical markets too small (or dubious) to attract the attention of the corporates or large internet companies but large enough to generate a decent income. And if you can find and start one there’s nothing stopping you finding and starting a second or a third!
