How to Find Profitable Niches in Saturated Industries

I often get the same question over and over again “isn’t x market too saturated for a new entrant”, yes sometimes it is, but sometimes it isn’t. But most time when people ask this question is because this business suits their situation: it requires little capital, it can be easily learnt and it is not very hard to turn it into a sustainable business to cover their living expenses.

Strategies

Specialise
if you are currently offering a myriad of services – the same as your competitors – in a crowded marketplace, then see if there is not perhaps potential to specialise in one service or one part of the market and become known for this service. This will also allow you to narrow your marketing and better target people. In other words:
Instead of: Supplier of general signage
Say: Supplier of small format signage, specialising in estate agent boards: one to full colour including photos!

Diversify
You may be asking what if I already offer a single specialised service? Then try the opposite, diversify your offering. If you already have the equipment to make estate agent boards, then you have the ability to make small format and emergency signs (no smoking, fire extinguisher, emergency exit etc.) which can be sold in retail outlets such as hardware stores.

Change business model
If you offer a certain service, see if the equipment used to carry out that service cannot be used to produce items sold in a retail setting. Example: if you offering laser cutting as a service, that same tool can be used to make toys, coasters, stencils etc. which can be sold in stores.

Sub contract
Sub contracting is doing work for a person or company as part of a larger project. In other words they have won the main contact and are outsourcing various smaller tasks. An example is a builder hiring a plumber or painter. What this means is you don’t have to go looking for work, but is could also means less profit as the person who has won the contract is dictating the price and you can be very sure they want whatever you do to be done for as cheap as possible.

Examples

Signage
Buy a vinyl cutter and you are in business. All the materials you need can be cheaply and easily sourced on a job to job basis (and will taking a deposit you don’t even need to outlay anything). Vinyl, Perspex, Correx, ABS, Chromadek all cheap as chips and sign making is very easy to get into. Now the market is flooded, big players, mom and pop shops and one man operations. What to do?

A vinyl cutter is a very versatile piece of equipment, yes, you can look for opportunities in the signage business, but a vinyl cutter can also be used to cut vinyl for wall art, window art and even airbrush tattoo stencils.

The Internet
Let’s take the Internet as another example. It is very difficult to launch a website and make it successful these days, especially if you launching a platform with existing players. Many people have tried to launch competitors to bidorbuy or Gumtree but have failed due to the network effect. Some niche players have made inroads in categories already covered by Gumtree such as autos and property but they have done so with a lot of money (Private Property is a good example who spent a lot on advertising).

So how would you take on Gumtree as a small business? If it is even hard to narrow down to the niche. You take on a category that Gumtree does not want to touch.

So lets have a look at what is not allowed on Gumtree:

The list below details what can’t be posted on Gumtree:

  • Alcoholic Beverages (including collector items)
  • Blood, Bodily Fluids and Body Parts
  • Burglary Tools
  • Counterfeit Products, replicas or knock-off brand name goods
  • Electronic Surveillance Equipment
  • Embargoed Goods
  • Endangered or protected species, or any part of any endangered or protected species
  • Escort services that offer or indicate sexual services
  • Fireworks, Destructive Devices and Explosives
  • Government and Transit Badges, Uniforms, IDs, Documents and Licenses
  • Hazardous Materials including but not limited to radioactive, toxic and explosive materials
  • Holiday points, timeshare points, club points, flexible points/weeks and/or any other, similarly related items, services or packages. If you need to sell/trade your points, please contact the related agency/service.Points may not be bought or sold on Gumtree
  • Identity Documents, Personal Financial Records & Personal Information
  • Illegal Drugs, controlled substances, substances and items used to manufacture controlled substances and drugs, & drug paraphernalia
  • Illegal items and services (including hacking services)
  • Illegal telecommunication and electronics equipment such as access cards, password sniffers, radar scanners, traffic signal control devices or cable descrambler
  • Items issued to any Armed Force that have not been disposed of in accordance with that country’s demilitarization policies
  • Items which encourage or facilitate illegal activity
  • Lottery Tickets, Sweepstakes Entries and Slot Machines
  • Material that is obscene, pornographic, adult in nature, or harmful to minors
  • Material that infringes copyright, including but not limited to software or other digital goods which you are not authorized to sell
  • Modded consoles and services
  • New merchandise or services from network marketing companies, work-from-home, independent franchisees or distributors, or similar representatives
  • Personal information or mailing lists.We do not accept the sale of bulk email, Internet Protocol (IP), Instant Messenger (IM), or mailing lists that contain names, addresses, phone numbers, or other personal identifying information. Any tools or software designed predominantly to send unsolicited commercial messages (UCE or “spam”) are also not permitted.
  • Selling or offering services for supplements/medicine general or pharmaceutical
  • Nonprescription drugs, drugs that make false or misleading treatment claims, or treatment claims that require therapeutic goods administration “DOH (department of health)” approval
  • Offensive material
  • Pesticides or hazardous materials
  • Asbestos-based products
  • Pictures or images that contain nudity
  • Plants and insects that are restricted or regulated
  • Prescription drugs and devices
  • Prostitution or ads that offer sex, sexual favors or sexual actions in exchange for anything
  • Recalled items
  • South African Fossils
  • Stocks, Cryptocurrencies and other Securities
  • Stolen property
  • Tobacco products (including e-cigarettes)
  • Un-cut/un-polished diamonds and/or precious gem stones
  • Unwrought gold and platinum
  • Loose diamonds without certificates
  • Used cosmetics
  • We do not accept ads selling body parts/bodily fluids, adoption or surrogacy anywhere on the site
  • Used or rebuilt batteries or batteries containing mercury
  • Watermarked or copyrighted images
  • Weapons and related items (including, but not limited to firearms, firearm accessories, parts and magazines, ammunition, BB, pellet and airsoft guns, tear gas, tasers, stun guns, switchblade knives, martial arts weapons, archery and/or bow and arrow equipment)
  • Vaporizers
  • Hunting trophies or animal parts for any animal listed in the CITES 1 guidelines
  • No commercial sale of hides/furs

As you can see there are some non-illegal things that Gumtree does not want on their website, booze, tobacco, weapons and some more this might open a niche market for a site. For example ecigssa has a booming e-cigarette classifieds section (items that are not allowed on Gumtree), there are online gun classifieds for legal guns as well as websites for adult entertainment (all not allowed on Gumtree).

Brought to you by Niche Business Ideas in South Africa

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