What is a Niche Market? The Definition, Its Pros and Cons, and a Niche Market Example.

A niche market is a subset of a larger market usually defined in the online business space by your keyword, product, or topic selection. A niche market is focused and targeted. There are fewer competitors but often easier opportunities with getting found and build a brand.

Niche Marketing Advantages and Disadvantages

Defining your niche market marks several marketing advantages and disadvantages.


  • Less Competition. Fewer businesses vying for market attention, resulting in easier exposure in the space versus loss among thousands of copycats.
  • Cost-effective. Highly focused campaigns target specific audiences, removing distractions and wasteful activities trying to be everything to everyone.
  • Brand Leadership. Leveraging expertise and placement to create fierce loyalty, becoming a leader in the niche by delivering consistent value.


  • Limited Growth. The smaller accessible customer base has a limit, stifling your growth because you’ve tapped most (if not all) of the available pool.
  • Disruption. Losing chunks of business presence if another major player enters the market, big businesses can come in and wipe out smaller ones.
  • Boredom. Finding you no longer care for the focus as you exhaust topics, turning something fun into a job.

Niche markets are often comprised of early adopters. These individuals are savvy and loyal but can feel alienated as the audience grows. What makes the niche unique begins to dissolve as the total market attunes to its offers, eventually attracting larger businesses and the public.


Niche markets are ideal for small startups. The lower barriers to entry, loyal market, and low overhead let entrepreneurs explore ideas without extraordinary risks in tackling major markets. This also gives the “fail fast” exit strategy – preventing dead-end projects from creeping and becoming money sinks.

A Niche Market Example

Truthfully, nearly every online business is a niche market example in one form or another. The Net attracts people from all walks of life, this lets entrepreneurs cater in unique ways. What was once impossible or wasteful is now worthy of experimenting.

Japan Crate is a niche market example.

Japan Crate

This subscription box company sends Japanese candy and snacks, monthly. There are several competitors, but it was one of the earliest in its niche. Because of their entry point, they’ve successfully positioned themselves as a market leader.

Finding a Niche and Creating a Strategy

Opportunities are endless because the Web attracts billions of users. You’re bound to find niche markets wherever you look. This presents a great opportunity if you’re deeply embedded in a culture, topic, or industry not yet represented to the masses.

How to find your niche

  1. Use niche selection examples to inspire your brainstorming session
  2. List your skills and interests, finding a crossroad with what you’re good at
  3. Look at your communities, asking what’s missing
  4. Think of a product you and others (in the niche) would find valuable
  5. Float the product idea to others, and decide to launch from their feedback

How to make a niche strategy

  1. Define your brand culture and business’s unique selling point
  2. Identify and target your ideal audience by making a customer avatar
  3. Run small-scale tests promoting a product, gathering feedback
  4. Launch a website or blog to begin building your online presence
  5. Reach niche communities through social media platforms

Niche businesses are quick-and-easy to develop with low overhead and barriers to entry. This means you could launch a site and product within a few days. You could exit the idea just as fast if it fails to reach its intended audience, saving resources and letting you get into the next niche idea.

Closing Words and a Nich Market Suggestion

Some of this information may not be new to you, or maybe it is. I believe niche marketing is far less about building the next game-changer and more about experimenting and tinkering. You’re testing skills while having genuine fun with the challenge.

A niche market will have you exploring site development, advertising, marketing, social, and more.

I think it’s a great way to learn by doing – facing a challenge and overcoming it as it comes through. This builds and builds, giving you greater experience and skills to take on larger markets. Plus, successful niche ideas become a new passive income stream to fund the next.

Good luck out there in those niche markets!