How To Find Your Niche in 5 Steps
Learn how to find and define your niche in this blog. Plus, get tips on how to find niche products to sell to your target market.
The best way to succeed online is to pick a niche with characteristics that are conducive to success.
Why? Because your niche dictates everything from the products you develop to how you communicate with your customers. By understanding the specific needs of a niche, you can position yourself in the market and earn more sales.
In this short guide, learn how to find your niche and what products to sell in it—plus, get tips to see if your small business ideas have sufficient demand.
What is a niche?
A niche is a segment of the broader market that has its own unique characteristics to distinguish it. Choosing a niche lets you target a more specific audience and offer products, services, and content tailored to their unique needs and problems.
For example, if your niche was indoor plants, you could create ceramic planters that appeal to customers who value craftsmanship and sustainability. You’d produce planters with unique designs, textures, and colors not found in larger retail stores to further attract buyers and build loyalty.
Why is it important to find your niche?
To succeed in business, you need to carve out a niche. Choosing a niche helps you build credibility with one audience and dominate a particular corner of the market. When you niche, you become the go-to business for a specific group of people.
Niching also:
Helps you build brand loyalty. Customers will choose your brand over a mass market company offering more product types. They also will connect more with your niche brand, knowing it will meet their needs.
Lowers marketing costs. By knowing your niche, you can target specific groups of customers. These people are more likely to act on your promotions, which brings down marketing and advertising costs.
Shows expertise. Choosing a niche establishes you as a thought leader in your space, as opposed to someone providing a generic product. It also positions you as an expert, signifying credibility and building trust amongst relevant customers.
Increases profits. Narrowing down on a niche lets you learn about specific customer groups. If you can show you’re the best brand to meet their needs, they’ll spend more with you more frequently.
Suppose you own a shoe store. You sell many types of shoes in the store. One day, in order to attract more customers, you add shirts, hats, sunglasses, and jackets to your shelves.
If someone is looking for a specific work boot or running shoe, are they going to come to you? Chances are, no.
Say you position your shoe store to be the #1 place for nurses to buy shoes. You sell durable slip-resistant shoes that offer support all day long. You spend money on ads and influencer campaigns targeting nurses. Over time, you become the go-to spot for nurse shoes and establish your place in the market.
1. Evaluate your passion and skills
Finding your niche begins with looking at your passions and skills. Some questions to ask yourself include:
Are there any topics I’m passionate about?
What do I excel at?
Do I have a favorite hobby?
These are all important factors to consider when trying to find a niche.
Let’s say you have a passion for fashion and are good at styling outfits. You might enjoy creating or sourcing clothes and working with a stylist for photo shoots. You can find a niche in the fashion industry by combining these interests and skills.
Or perhaps you enjoy cooking and creating healthy recipes. You might enjoy selling cookware and writing recipes for your company’s food blog. Finding a niche in the food industry would be easier with these interests and skills.
The key is finding an area you’re passionate about and have some skills in. This will make finding a niche you enjoy working in much easier.
2. Find a few different potential niches
Once you have an idea of your passions and skills, start looking around for potential niches. In this phase, you want to build a big list of niches so you can determine demand. You’ll narrow down these niches later.
You can define a niche by:
Price (luxury, moderate, discount)
Levelofquality (premium, handmade, economical)
Geographics (residents of a certain country, city, or even neighborhood)
Demographics (gender, age, income level, education level)
Psychographics (values, interests, attitudes)
For example, selling trail running shoes is a niche. Trail running shoes are a segment of the larger industry of footwear and the audience is runners, hikers, and nature enthusiasts, which have large communities.
There’s no single way to find a niche, but here are a few to consider:
Start with Google searches
The best way to start brainstorming is to understand what other online retailers are doing. Let’s use “vegan shoes” as a starting point. Scroll down to the Refine section, where you can search by type, style, material, and department.
1. Evaluate your passion and skills
Finding your niche begins with looking at your passions and skills. Some questions to ask yourself include:
Are there any topics I’m passionate about?
What do I excel at?
Do I have a favorite hobby?
These are all important factors to consider when trying to find a niche.
Let’s say you have a passion for fashion and are good at styling outfits. You might enjoy creating or sourcing clothes and working with a stylist for photo shoots. You can find a niche in the fashion industry by combining these interests and skills.
Or perhaps you enjoy cooking and creating healthy recipes. You might enjoy selling cookware and writing recipes for your company’s food blog. Finding a niche in the food industry would be easier with these interests and skills.
The key is finding an area you’re passionate about and have some skills in. This will make finding a niche you enjoy working in much easier.
2. Find a few different potential niches
Once you have an idea of your passions and skills, start looking around for potential niches. In this phase, you want to build a big list of niches so you can determine demand. You’ll narrow down these niches later.
You can define a niche by:
Price (luxury, moderate, discount)
Levelofquality (premium, handmade, economical)
Geographics (residents of a certain country, city, or even neighborhood)
Demographics (gender, age, income level, education level)
Psychographics (values, interests, attitudes)
For example, selling trail running shoes is a niche. Trail running shoes are a segment of the larger industry of footwear and the audience is runners, hikers, and nature enthusiasts, which have large communities.
There’s no single way to find a niche, but here are a few to consider:
Start with Google searches
The best way to start brainstorming is to understand what other online retailers are doing. Let’s use “vegan shoes” as a starting point. Scroll down to the Refine section, where you can search by type, style, material, and department.
Use Google’s suggestions
Ever notice how when you start typing something into a Google search, it shows you suggestions before you finish? These are Google’s most-searched-for related keywords and queries. Use them to your advantage to find a niche for your product category. You can plug in “best shoes for” to get some ideas.
You can also use keyword research tools to check search volume and trends. This will help you identify the most viable opportunities.
Look for passionate communities online
The web is pretty good at organizing itself into communities based on shared interests, passions, and hobbies—in other words, into niches. Dig through the most active subreddit and listen in on the discussions.
Subscribe to hashtags on Instagram and TikTok, like #sneakerhead, and you’ll find opportunities to niche down.
3. See if there is a market
When you’re looking for a niche, it’s important to ensure a big enough market to support it. It’s no use trying to sell to a group of people that’s too small to sustain your business.
Here are a few ways to determine if there’s a big enough market for your niche:
Total addressable market (TAM). This is the total potential revenue that your business could generate if it captured 100% of its target market. For example, if you’re selling a product that’s aimed at women aged 18 to 35, your TAM would be the total revenue generated by all businesses that sell products to this demographic.
Size of the niche market. This is the portion of the TAM that’s made up of your target market. For example, if you’re selling a product aimed at women aged 18 to 35, your niche market would be the TAM’s portion of this demographic.
Growth rate of the niche market. This is the rate at which the niche market is growing. For example, if you’re selling a product aimed at women aged 18 to 35, your niche market might be growing at a rate of 5% per year.
Do market research on your chosen niches to see if it’s a good specialization or not. You can also plug each niche into Google Trends to research the current trend.
For example, you can see below that the topic “vegan shoes” has consistent demand over the past five years. This would be a decent niche to get into as a new business owner.
4. Narrow down your niche
Now that you’ve brainstormed a list of potential niches, it’s time to start narrowing them down. Here are a few factors to consider:
Do you have any personal or professional experience in this niche?
Is this niche something you’re passionate about?
Do you have any existing connections in this niche?
Is this niche too broad?
Is this niche too competitive?
Can you realistically see yourself building a successful online business in this niche?
You don’t have to check all the boxes, but the more “yes” answers you have, the better. If you’re struggling to narrow down your list, try these exercises:
Take a closer look at the niches you’re most passionate about. What are the unique selling points (USPs) of each?
Are there any niches on your list that you could combine? For example, if you’re passionate about fashion and sustainable living, you could focus on selling sustainable fashion.
Are there any niches on your list that you could segment further? For example, if you want to sell fitness products, you could segment by type of fitness (e.g., CrossFit, yoga, running) or by product type (e.g., fitness apparel, fitness equipment, fitness supplements).
4. Narrow down your niche
Now that you’ve brainstormed a list of potential niches, it’s time to start narrowing them down. Here are a few factors to consider:
Do you have any personal or professional experience in this niche?
Is this niche something you’re passionate about?
Do you have any existing connections in this niche?
Is this niche too broad?
Is this niche too competitive?
Can you realistically see yourself building a successful online business in this niche?
You don’t have to check all the boxes, but the more “yes” answers you have, the better. If you’re struggling to narrow down your list, try these exercises:
Take a closer look at the niches you’re most passionate about. What are the unique selling points (USPs) of each?
Are there any niches on your list that you could combine? For example, if you’re passionate about fashion and sustainable living, you could focus on selling sustainable fashion.
Are there any niches on your list that you could segment further? For example, if you want to sell fitness products, you could segment by type of fitness (e.g., CrossFit, yoga, running) or by product type (e.g., fitness apparel, fitness equipment, fitness supplements).
5. Validate your niche
There are a few key ways you can validate your niche before you invest too much time or money.
Take a look at your competition
If there are already a ton of niche businesses selling what you want to sell, that’s not necessarily a bad thing. It could mean there’s a market demand for what you’re selling.
But it also could mean you’ll have a hard time standing out in the crowd. If you do decide to enter a competitive market, you’ll need to have a unique selling proposition.
Talk to potential customers
See if potential customers would be interested in what you’re selling and if they would be willing to pay for it. You can also look for online communities related to your niche and see what kinds of conversations are taking place.
Are people talking about the problem you’re trying to solve? Are they looking for solutions? If so, that’s a good sign you’ve found a potential niche.
Build your audience first
Kickstarter campaigns generate awareness about products before they’re even developed. You can introduce your idea and gain followers before the idea has come to fruition. This way, you’ll have an engaged group of target customers ready and waiting for you when you launch.
Research consumer trends in your market
It’s important to be up to date with what’s happening in your chosen niche. Resources like Think with Google and Nielsen consumer research will help you understand consumer pain points, desires, and breakout trends.
Set up Google Alerts for related keywords and regularly monitor social media conversations to stay on top of what’s trending.
The goal is to get feedback from real people about your niche idea. This will help you validate (or invalidate) your assumptions and give you a better idea of whether or not there’s a market for what you’re selling.