The Benefits of Buying a Niche Online Business: Why Specialization is Key
Remember the old saying, “Jack of all trades, master of none?”
Well, that applies to online businesses too. While offering a wide range of products and services allows you to have your finger in a lot of pies, your resources are often spread too thin to really dominate any of the markets you operate in.
That’s why if you’re looking to buy an online business, consider narrowing your focus and buying a niche business.
In this article, we’ll break down what a niche business actually is, and the many benefits of specialization.
What Is a Niche?
Before we dive into the benefits of niche-specific businesses, let’s go through a quick rundown of what exactly a niche is.
In online business, a niche refers to a specific market segment or demographic that a business targets. It can also refer to a specific product or service that a business specializes in.
For example, a business that sells all-natural, organic skincare products specifically for people with sensitive skin. This business has identified a specific market segment (people with sensitive skin) and a specific product niche (all-natural, organic skincare) which allows them to target and serve this specific group of customers better than a more general skincare company that sells a variety of products for all skin types.
Now that we’ve cleared up what a niche is, let’s take a look at some of the advantages of niching down.
The Benefits of Operating within a Specific Niche
Improved Brand Authority
By specializing in a particular product or service, businesses can provide a superior value proposition over competitors that offer a “one size fits all” solution.
Think of it this way, if you have a rare heart condition, would you prefer to consult with your local GP or a cardiologist? Specializing automatically gives your brand a higher perception of authority within your niche.
Not only does this improve a brand’s reputation and increase customer trust, but niche-specific businesses can leverage their authority and ‘expert knowledge’ to charge more than competitors who have a generalized offering.
As a buyer, this authority and trust give you a great foundation to build on when you take over the business.
Targeted Customer Base
Niched-down businesses tend to have a much clearer understanding of their target audience. Serving a specific demographic instead of a generalized market helps businesses to really hone in on their customers’ wants and needs.
This helps businesses to align their mission with the values of their customers, boosting brand loyalty. As a result, online businesses that specialize in a specific niche often have a well-established customer base and a healthy amount of repeat customers.
This gives you a great advantage when buying a business, as you won’t have to spend as much time and money on acquiring new customers.
When it comes to online business, niching down is like being a master chef in a fancy restaurant instead of a fast food cook. You get to focus on a specific dish, perfect it and serve it to a crowd of people who are specifically looking for that dish.
As a result, you’ll be the go-to spot for that product and you’ll have less competition. It essentially allows you to become a big fish in a small pond instead of the other way around.
Specialization, and the well-honed skillset that accompanies a narrowed-down focus, make it harder for your competitors to imitate your success or your products and services. Plus, it allows you to establish a unique selling point in the market.
As a buyer, having a built-in failsafe that keeps competitors at an arm’s length gives you breathing room to learn the ropes of the business without having to worry about competitors breathing down your neck.
Sticking to a specific niche allows businesses to be laser-focused on one thing and excel at it, rather than spreading themselves thin trying to do it all.
When you only have one area of expertise to focus on, you can invest in specialized training and tools to help your business become the best in its niche.
A great byproduct of this increased efficiency is that it allows businesses to sell their products and services at a lower cost than competitors who have to oversee the production of several goods or services at one time. A more streamlined product offering also helps to reduce inventory, transportation, and fulfillment costs.
Niching down is also helpful when it comes to marketing and advertising. Having a narrowed focus helps businesses operate like a sharpshooter aiming at a target. While businesses that sell a wide variety of products and services have to scatter their shots in different directions, businesses that specialize in one niche can zero in on their target audience with precision and clarity.
With fewer cogs turning, there’s less room for error, which is a relief for buyers who need time to come to grips with the structure and process of their new online business acquisition.
Online business owners have a lot to juggle over and above the everyday running of the business, including monitoring new trends, best practices, and changes in the market.
In such a quickly evolving industry, staying up to date can be challenging. By narrowing your focus to a specific niche, you can reduce the learning curve and have a better shot at identifying opportunities.
Niching down your business can also help you to be more innovative.
First, when you focus on a specific niche, you can become a subject matter expert in that area. This allows you to identify and understand the specific needs and pain points of your target audience. This in-depth knowledge can help you develop unique solutions to their problems that others may have yet to consider.
Secondly, niching down your online business allows you to create a more targeted marketing strategy. This means you can create content and campaigns that are directly tailored to your target audience, which can increase engagement and lead to higher conversion rates.
Additionally, when you niche down, you can easily identify the competition within that niche and find ways to differentiate yourself and stand out. This can lead to more innovative ways of doing business, such as creating new products or services or finding unique ways to deliver existing ones.
If you’re looking to grow your newly acquired online business, ease of innovation and a reduced learning curve will get you off to a great start!
Niching down your online business is like finding your tribe. It allows you to connect with other like-minded individuals and businesses who speak the same language and understand the unique challenges and opportunities of your niche.
The smaller your circle, the easier it is to make meaningful and valuable connections with fellow business owners. And, by becoming a subject matter expert in your niche, you may become the go-to person, the MVP, the brain trust of your network, and that’s a pretty sweet spot to be in.
You might even get invited to niche-specific networking events and online communities where you’ll be able to connect with other businesses that share your passion and goals, and maybe even make a few valuable connections along the way.
When you purchase an online business, having a network of niche specialists to lean on will be a huge asset!
How to Scale Your Online Business within a Niche
The temptation to expand beyond your niche is a challenge that many online business owners struggle with. The urge to grow businesses to new heights is what get’s many entrepreneurs bouncing out of bed each morning!
So how do you grow a niche online business while maintaining a specialized focus?
Many business owners fall into the trap of thinking the best way to get more profit is to offer more products. While this does occasionally work, in many cases it simply dilutes your brand and splits your focus.
Instead of branching out into shoulder niches, consider what you can do to strengthen your foothold in your existing niche.
The best way to do this is through vertical acquisitions. Vertical acquisitions involve expanding into additional business models within your niche.
For example, if you run an eCommerce store that sells pet products, you could purchase a website that focuses on pet care. That will allow you to tap into revenue from display advertising and affiliate links, while also driving traffic back to your eCommerce store.
Kevin Espiritu from Epic Gardening is a great example of niche expansion done right. He shared his journey with us on The Opportunity podcast, explaining how he grew his humble gardening blog into a multi-million dollar gardening empire.
Kevin’s business now includes a website, a YouTube channel, eCommerce products, a podcast, a newsletter, and more. Plus, in 2022, Kevin raised $17.5 million in growth capital to grow his business even further!
Even though Kevin’s business now involves multiple different revenue streams, he never strayed from the gardening niche. This allowed him to build his authority and become the go-to resource for gardeners from all over the world.
Buying a Niche Online Business Is Easy as Pie
Now that we’ve laid out all of the benefits of owning a niche online business, you might be itching to get your hands on one of your own.
Luckily, you don’t need specialized knowledge to find a long list of high-quality niche online businesses. You simply need to register an account on the Empire Flippers website, then visit our marketplace to view all of the businesses we have for sale.
If you have your eye on a specific niche, you can use the filter option to narrow down your search. We have 58 different niches to choose from, so you’re sure to find a niche that suits your needs.
If you’re unsure about which business is right for you, you can always book a call with one of our expert business analysts to discuss your options.