A few years ago, the editor of Wired Magazine wrote an article about the Long Tail and used Amazon.com and Netflix as examples.
Basically, the long tail theory says that you can do more business by selling small amounts of hard to find items than trying to sell large amounts of easy to find items.
Amazon stocks hundreds of thousands of items, and sells only a few of each, but because the stock isn’t residing in an actual inventory, the overhead is negligible and Amazon is able to sell millions of dollars worth of product.
Any online retailer or business can mimic the same model of the long tail – especially if you’re a Club Asteria member!
First, you need to figure out the niche that you serve – are your customers looking for business solutions or residential solutions? Do they want to purchase software or are they looking for specific business books?
The next step to finding a niche is to research the market that you are currently targeting. Start by listing the “easy guesses”, that is, the popular products that everyone carries and sells. The strong sellers are what help pay your overhead, keep your site running and the bills paid.
Now look closer at your sales over the past several months, what are your steady sellers that might only be purchased 5-10 times a month? Do they all fit into one category or do they represent an entirely different kind of market?
The best way to test this theory is marketing these steady, smaller sellers and observing how they perform. Another great way to discover niches is to survey your customers, based on their past purchases, and ask what other products or titles they would like.
Another way to discover a niche is test marketing, and with the Internet that’s easier than doing it the traditional way. If you’ve noticed a trend in business and found a product that compliments that trend, offer it as a special deal on the front page of your site.
Using your analytics and tracking programs, you can determine if this new product is getting a lot of attention. You may have to tinker with this process, but you won’t be taking a big risk, since the inventory doesn’t have to be purchase by you until orders are generated.
Niche markets are always waiting to be discovered – and if you can’t find one, building a niche is the next best answer.
This process takes more time, but if you realize there’s a market that hasn’t been serviced, matching up existing products or developing new ones, can result in significant profit.
Again, the initial investment of time and money is sizable, but when you grow a niche market yourself, you benefit from being the first one there!
Tags: business solutions, business books, niche market, financial freedom