The Do’s and Don’ts of Niche Retailing

Thinking about owning a retail store? While you can always go broad by offering a wide range of products, a smarter solution is to target a particular niche. This process, known as niche retailing, allows business owners to laser-target a specific demographic based on their product. However, there are some important do’s and don’ts niche retailers should follow to ensure their business is a success.

Do: Choose a Niche With High Margins

Let’s face it, you aren’t going to experience any serious level of success selling products with low profit margins. When you’re choosing a niche for your retail store, pay close attention to its profit margins. The electronics niche, for instance, typically has a low profit margin, which is why big-name retailers dominate it. Jewelry, apparel and fashion accessories, however, tend to experience higher profit margins.

Do: Focus on Your Niche

If you’re going to take the route of niche retailing with your business, you should stick with your niche until you’ve completely dominated the market. One of the biggest mistakes niche retailers make is trying to expand prematurely. Let’s say you own a bathing suit store; wait until you’ve built up a sizable following of loyal customers and clients before you venture into things like apparel and beach accessories.  There’s certainly nothing wrong with selling these items, but it should only be done once you’ve established yourself as THE leading bathing suit store.

Don’t: Attempt To Enter a Competitive Niche

Research and planning is critical to the success of a niche retail store. Before you even think of signing a lease and opening a store, check to see what the competition is like. If there are half a dozen similar retailers selling products in the same niche nearby, you’ll either want to move to a different location or choose a new niche. This doesn’t necessarily mean your business will fail in a crowded niche, but it will certainly make things harder.

Don’t: Overlook Customer Service

Regardless of your store’s particular niche, you shouldn’t overlook the importance of offering exceptional customer service. As a niche retailer, you want to encourage customers to keep coming back for future purchases. If they make a single purchase and are never seen or heard of again, they’ll likely take their business to one of your competitors. Maintaining a friendly attitude and helping customers find what they need encourages them to return for future purchases.