How to Niche Down and Find Profitable Niches Fast

How to Niche Down and Find Profitable Niches Fast in 2023

How to niche down? A simple way is to identify your niche and then look to niche down within that and focus on one specific part of the main niche.

You must have heard the saying -‘jack of all trades, master of none’- this is the same.

It’s time to gear up and step into the more ‘granular' niche areas other brands have overlooked.

Below, we will discuss what a ‘niche’ is, how to niche down and focus on areas other brands haven't.

Wondering What a Niche Market is?

A niche market is a portion of a larger market. It is usually one that has been ignored by other online businesses and therefore possesses immense potential and opportunities.

This market, which is narrowed and comprises your target audience, is dominated by unique and creative items or services.

It is a refined market that allows online businesses to have a focused outlook, further enabling the easy and quick growth of a custom audience.

A market can be divided into many factors, but some of the standard parameters are:

  • Demographics (based on age, gender or income, etc.)
  • Location (can be international, national, or even focused on a specific area)
  • Price (a luxury item or a necessity etc.)
  • Psychographics (based on interests, preferences or values, etc.)

Having a niche assists an e-commerce business to develop credibility and an edge compared to other generalist players in the online market.

But you also need to be careful while deciding upon your niche.

What is ‘Niching Down'?

How to niche down or niching down is simply to dig deeper into a main niche and focus on that particular part of the niche.

For example, if your niche is fishing equipment, rather than focussing on this and selling all sorts of fishing kit, you could niche down and just focus your whole business on selling fishing rods.

Or, you could go even deeper and niche down even further by focusing just on selling fishing rods made only for fly fishing.

When working on how to niche down, you are focussing all of your efforts in a very defined range of products or services, and this helps you to be 100% committed to this and dominate that part because your competition is too busy focussing on the main niche of fishing and spreading themselves too thin over many different products.

Find Profitable Niches

How to Go About It

Let us zoom in on how to niche down and build this niche market for online businesses. This may seem overwhelming, but it’s not that difficult.

There are 4 steps to help you get on track.

1. Your Strengths and Passion

The best way to start anything is to first look inward and be confident about your own passions. What will help you develop a niche is what makes you unique, and that is your interest.

Focus on what you or your brand are offering, which others are not. Look not just for niche markets but also for niche ideas because that will give your online business a unique selling proposition.

Look around and see which group of people you would want to get connected to or serve. Enjoying what you do is very important, so choose something that gives you inner satisfaction and pleases you.

Ask these questions, and let the answers guide you to your niche market.

  • What issues are you resolving? What are peoples pain points?
  • What issues do you want to resolve?
  • Which problems can you address better when compared to the generalist competitors that you have in the market?
  • In which arena do you think you hold the highest command?
  • What are you best at?
  • What do you have the most knowledge about?
  • With which group of people would you and your team want to work?
  • Whose issues would you like to address?
  • Which group of people are you most comfortable getting connected with?

2. Do Your Research

Jumping into something with no prior knowledge is a mistake. Instead, do your needed industry research.

After figuring out where your passion lies and which segment of the market can be the most mutually beneficial, you can now move on to the practicalities of this process.

The first and foremost thing is finding how many, what and which competitors you would have once you step in.

Then, do an analysis and thoroughly compare your idea and market with what these competitors are already doing.

Dig deep into the dynamics of your relevant market and look for loopholes and any missing spaces that you, as an e-commerce entrepreneur, can capitalize on.

Use tools like Google Trends and Ubersuggest to see what popular searches and keywords are floating out there.

This will provide the right direction by providing you with insights into your target market and relevant product category and ultimately how to niche down.

3. Gain Consumer Insight

A good entrepreneur knows what exactly their customer needs. For this, you can use Alexa’s audience overlap tool.

You can go onto sites with a similar target audience as yours through searches and then study the trends, needs or interests, etc.

Google Consumer Surveys allows the reader to view paywalled content in exchange for a short survey. This will allow you to gain insight into what your customers are thinking.

4. Be Ready for Any Needed Adjustments

Having flaws in your idea and strategies is highly possible but doesn’t mean that it is the end of the world.

You don’t need to get the expected results on your first go, but with slight adjustments, you can get there.

Test your initial idea and run it. Notice the response you get and make changes accordingly and run the updated version of your business again.

Google Trends are based on the search results of Google Search and will show you how many times real people use a specific search term.

The results will show you the search volume locally, worldwide, and in different languages. 

Now you can take your business idea and dig even deeper. You can analyze trends in cities, areas, and countries. 

This will give you facts about the popularity of the product in the market locally, in regions, or whichever market you want to serve with your online business. 

Benefits of Niching Down

When learning how to niche down, it pays to understand the benefits:

Clarification of the purpose: A clear and concentrated niche can help you understand the specific needs and desires of the target market.

Improved Marketing: By understanding the target audience, you can create better marketing campaigns aimed at gaining a new customer base.

Increased differentiation by focusing on the specific niche will help differentiate your business from its competitors.

Increasing credibility: Serving specific areas shows you're knowledgeable about the niche, increasing the trust and loyalty of customers.

Do Your Research

If you jump on something without knowledge it can be mistaken. Make the necessary industry study.

Once you determine where and how you are passionate about your business and where you have the best mutual benefit you can move onto the practical.

The best way to know who to beat will be to determine the competitor you have when you enter. You've got the best chance at evaluating the market.

Find loopholes and gaps within your e-commerce market to maximize your potential.

The Process of STP – Segmentation, Targeting, Positioning

The term STP is marketing in 3 parts. Consider this when looking for how to niche down.

  • Segmentalization – Segment your audience.
  • Targeting – Target that segment.
  • Positioning – Position your company and its products or services within that target audience.

Tell me the best way to differentiate ourselves? Tell me the best way to eliminate competitor?

how to niche down


What is a Niche That is Too Broad and Why You Don't Want to Be There?

It is broad when you are all over the place and your area is not specific. Your customer base is not one particular type of person or a specific target audience. The niche of ‘fishing products' which we mentioned above is an example of this.

Another key identifier is when you have too many competitors and little relevance.

Again, you don’t want to attract unneeded and ‘potential’ clients, but instead, you should attract your narrowed-down target market so that you can stand out.

Through this strategy, you will become the go-to expert. Your marketing is also easier and less costly in niche marketing (just saying …).

Doesn't a Broader Niche Mean More Money?

No! Going narrow gives you an edge and helps develop credibility among your target audience. Niche markets enable your online business to become an expert resource which will, in turn, give you more sales and, therefore, revenue.

How Do You Estimate The Size of a Niche Market?

There are many methods for this, including top-bottom, bottom-up, comparable markets, or new market approaches. However, the technique that usually is used as follows:

  1. Develop a profile pinning down who your target customer is.
  2. Define the area/country you intend to target.
  3. Move on to calculating your rate of demand. Use Google Trends and Google Keywords to assess traffic potential for your niche.

Do I really need to niche down?

Yes! Because niches are more valuable because they generate more revenue and gain a larger customer base.

Using specialised niches, you can increase the prices – and even more importantly, your clients may come and be the right customer too.


Here is a guide to online resources/tools that can be helpful for online business owners who are working how to niche down in their industry.


CensusViewer is an online application that provides you up-to-date census access. The premium version lets you see registered voters and commercial data sources under the U.S. Census Bureau and American Community Survey.

You can find data organized according to age, race, ethnicity, income, education, etc., making it easier to find data on your desired target market.

Consumer Expenditure Survey

The Consumer Expenditure Survey collects data about the purchasing habits of consumers. It includes demographics, income, and expenditures of customers in the U.S. These cover the major expenditure categories and are collected through a national survey and are thus reliable.

It provides insight into consumer behavior without charging any subscription fee and is reliable as it is collected nationally.


SizeUp is an application that will answer all your burning questions within seconds. It covers data to cater to small online businesses and help them make intelligent choices by providing easy access to business intelligence tools.

It provides extensive data and business intelligence tools to small businesses at an early stage to help them grow. In addition, it is a reliable source of data to make critical business decisions.

Google Trends

Google Trends will help you access top searches on the google search engine over a chosen period.

It helps small online businesses keep a check on their niche or industry for free.


For an online business to make its way into the competitive landscape, going deep into your niche is your best bet. We definitely hope this guide has helped you in determining how to niche down and defining what it means to niche down.

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