On Target: How the Internet Makes Niche Businesses Profitable

The Internet fundamentally changed the way that customers and entrepreneurs do business. Just as importantly, it makes niche businesses more than a pipe dream. They can operate as sustainably profitable businesses. So, how does the Internet make niche businesses a profitable venture for new entrepreneurs?

Low Overhead

Niche businesses typically cater to smaller target market groups. That makes running a brick and mortar store problematic. Unless you live in a major city, it’s hard to get sufficient traffic flow to make your lease payments. You may well still go broke if your business caters to a niche that’s too small.
The Internet lets you forego any kind of business real estate. You can literally run an e-commerce business out of a spare room or garage. That dramatic reduction in overhead makes the niche business more profitable.

Geographic Dispersed Customer Base

With an online niche business, you can cater to a geographically dispersed customer base. An excellent example of this is online colleges for military personnel, veterans, and their families. Service members might be stationed anywhere in the world, but they can access the Internet from most non-combat zones.
In a similar vein, let’s say you sell vintage clothing. You might only find a few dozen interested people locally. You can find tens of thousands of interested customer online. Just as importantly, they can find you with a basic search engine query.

Niche Groups Self-Identify Online

You can find groups for almost anything. Groups that love knitting or comics or movie franchises. While you have to handle it with some care, those groups represent the ideal target market for your business.
You don’t have to spend tons of time and money figuring out your market. You just need to attract their attention. That makes the business cheaper to run than a more general business.

You’re Always Open

Barring some kind of outage at your hosting company, your niche website never closes for business. That means your customers can place orders whenever it’s convenient for them. You can continually reap profit regardless of when you’re in the office.
The Internet makes niche businesses profitable by removing some of the biggest stumbling blocks of brick and mortar businesses. You reduce or eliminate overhead while remaining open 24/7. Members of your target market self-identify in groups all over the web. You aren’t limited to customers located in your local geographic area. All of these factors combine to reduce costs while maximizing potential profit.