Pros and Cons of Businesses That Sell Niche Products

Carving Out Your Niche

Having a niche product or service can be both a highly lucrative business as well as a very dangerous one. If you have been able to produce something that is difficult to copy and you are able to copyright protect it, then you could be well on the path to amazing riches and fame. Come up with an idea that is unprotected, however, and you could quickly find yourself on the road to ruin.
We looked at some of the pros and cons of operating a niche product or service.

Pro: A Trusted Service

If you are in the business of making or producing one thing, or one range, then you generally become accepted to be an authority in that area. Therefore, if consumers are looking for specialist advice around a product, for example fireworks, a specialist business focusing solely on this area is more often than not going to be the place to go.
Because a business such as this focusses on one product or range, they can almost always be trusted to have stock of the item and be able to provide it as and when required.

Con: Rise of the Supermarkets

Supermarkets are becoming, almost more and more on a daily basis, a one-stop shop for people who are looking to buy everything they need. Therefore, people looking to buy specific products don’t need to use specialist retailers as often as they previously have done. Come a specific time of the year, seasonal space is cleared to make room for the latest trends, from Easter and other religious festivals to Chinese New Year and seasonal space.
If an idea is easy to replicate, a small business could easily be exposed by the power of larger retailers.

Pro: Depth of Stock

Despite the rise of the supermarkets and other retailers that are able to provide everything for a consumer, specialist retailers, whether they be selling fireworks, sportswear, or food, will always be able to offer an in-depth range and generally much more variety.
For people who are looking for the very best products around, specialist niche sellers will always have a place.

Con: Cost Issues

Perhaps the biggest obstacle for specialist retailers is that they need to maintain their margins, given that it is their only avenue of generating profit. Supermarkets, for example, can use fireworks and other products as a footfall driver to bring people into their stores, and sell them at a dirt cheap price while relying on their customers to buy other, more profitable, items in order to support their business.