Imagine two shops that receives 100 customer each every day. Of these hundred customers 40 always find and buy what they need in each of these two shop. Of these 40 that buy 30 come from across the road where fewer people live. Imagine that one of these shops decides to relocate across the road to the smaller population to be nearer to her customers and serve them better. Obviously because of fewer people she attracts less customers to her shop. However because of the closer relationships the customers can now request for what they want stocked. As a result not only do all the customers to her shop buy, they buy more often. This is the power of niche-marketing.
Remember ‘Differentiate or Die’, a noble concept peddled not so long ago for survival of corporations? Online it is ‘Niche or Die’. This is becoming increasingly critical for the small internet businesses.
Niche marketing is a simple concept that involves targeting very specific keywords and optimizing your website and internet marketing for those specific terms. This practice can help a business, even one in a very competitive online category, to gain an advantage in the search listings.
You probably have heard that the internet has leveled the playing field for businesses small or large; those with huge budgets and those with shoe string budgets. As much as this is true, you will quickly discover that no sooner than you have rolled out a Pay per Click campaign, that your moneyed competitors are willing to bid 10 times more than you can even afford. a strategy called loss leader. As an online business person you are ill-equipped to market to the high traffic keywords (read huge markets) both monetarily and capacity wise. Unless you like the feeling of your head cramped in a vice, you are better of targeting more low-traffic yet closely related keywords. Though the internet does give you access to these huge markets theoretically, you will be quickly overwhelmed trying to satisfy it.
As a small business, trying to fight for the same market as itunes or amazon is often suicidal. However you could provide exclusively East-African Music and compete very effectively with itunes or sell specifically motvational books and compete effectively with amazon. These smaller markets provide niches which as a small internet business you can not only satisfy but easily over-deliver. Niche markets may provide less traffic but when well structure they give you more business.

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