For online retailers, searching out niche markets isn’t just a possible option; it’s the real opportunity.  As a small business, you may get frustrated looking at the retail prices of the high street and retail park superstores – how does an online business compete?  The answer is simple – you don’t.

Beat, Compete or Go Round?

It’s impossible to compete with a huge retailer on price.  The superstores buy in such huge quantities that they will always get a better discount than a smaller business.  Their wholesale prices will be lower and they can pass on a good range of special offers to their customers while still seeing a healthy profit.  So if it’s clear that in your market you can’t beat the big guys on price, or compete with them on offers, it’s possible to see a great opportunity in your third option.  Go round and find an alternative market.

Big stores make their money by creating a fast turnover of stock.  They won’t put out on the shelves any items that don’t sell quickly and their product range will be narrow as a result: they want the new titles, the popular make, the best selling product – and not every consumer wants that particular model.

There is a theory that ecommerce is a ‘long-tailed’ industry – a theory made popular by author Chris Anderson.  This  suggests that the best selling items that shift quickly make up the ‘head’ of the retail industry while the slower-moving niche products make up the ‘tail’.  That ‘tail’ might appear to trail behind, but sales from it can equal or outdo the best sellers at the head of the market.

Where can the specialist consumer go – the one that doesn’t want the best seller?  Increasingly, they’ll look online – for specialist shops with the niche market items they want to buy.