Is There Such a Thing as a Saturated Niche?

This is a guest post by Hendry Lee.

I bet you’ve heard this advice somewhere. Perhaps several times. Internet marketing experts almost always recommend you to avoid saturated niche as part of their teachings.

Their advice is to corner your own small but profitable niche. With little to no competition, you should be able to dominate the niche and make money by either selling advertising space on your blog / web site for advertisers who want to sell to this market, or sell your own product and service.

At a quick glance, this advice may perfectly make sense. However, it may come to your surprise that picking a small niche may not always be the right strategy. Worse of all you may find out later that it becomes one of the biggest lies that prevents you from getting the most out of your online business.

False Perception about Saturation

According to Merriam Webster Dictionary, saturation means:

“The supplying of a market with as much of a product as it will absorb.”

Based on that definition, saturated niche as the dictionary refers to simply can’t exist. Close to saturation is possible, but there can’t ever be a saturated market.

In real life, especially in the era of long tail distribution, it is impossible that everyone buys from one or a handful of vendors. Customers could switch from one brand to another. They may also wait for new product to appear before buying.

Let’s not forget there is always new customers who replace old customers too. As more people come online, presuming it is a growing niche, more customers become available to the market.

Finally, the same person often buys multiple items of the same product from two or more vendors.

Getting It Straight

When asked further, usually these marketers use the wrong word to describe what they mean. By saturation, they refer to a condition where there are a lot of competitions doing business in the same niche.

Satellite TV and credit card are just two examples of niches with a lot of competition. And here’s the truth. Competition isn’t equal to saturation.

When two or more businesses are trying to sell the same type of product to the same individual, they are competing. Competition isn’t necessarily a bad thing though.

Oftentimes, competitions can only means one thing: there are more customers who are still in demand for the products. If no one else wants the product, and people are no longer making money from the niche, then competitions should not exist at all.

Your Competition, Your Partner

Here is a strategy, or mindset if you will, that applies especially well to certain type of online business. Actually this strategy works everywhere just that in other markets some people may think it is impossible. Lack of creativity, perhaps?

Competitions may as well be your best partners. Think about it for a moment. They spend money to generate traffic and leads. They build a list of prospects and customers. All of these customer profiles fit very well for your products and vice versa.

Business owners are only going to make more money if they just cross promote or do some type of partnership. After all, people rarely buy from one vendor only. People who are very fond of surfing often buy half a dozen, if not dozens, of surfboards, most likely from different brands.

By doing cross promotion, you will be able to generate revenue when your existing customers buy from others too. This purchase habit happens with or without you, so why not take advantage of it?

In other words, a partnership not only allows you to get customers faster, but also at a cost that is much lower than if you have to do it yourself.

What does this have to do with blogging and online business?

A lot. Let me elaborate.

Blogging in the “Saturated” Niche

One of the important metrics of a successful blog is traffic.

If you look at it from the search engine optimization perspective, an expert tells you to pick a less crowded niche because with that you will be able to climb the search engine ladder easier. With the right pick of long tail keywords, you may start getting into the first page of the search results within the first weeks, or even days.

At the same time, you are limiting the number of traffic you can possibly get from search engines. By no means you should target the broadest niche possible but you also want a topic with room to expand, perhaps for years.

Competitive niche usually has more keyword variations, although it may not always be so. It definitely will take longer time to rank for your most wanted keywords, but you can work from the bottom up — from those easier to rank, long tail keywords.

Everyone knows that links are very important for search rankings. If your blog contains high quality content, you are more likely to get people to link to your blog if there are more bloggers blogging the same topic. By getting links you can also speed up the ranking process for your keywords.

Making friends and getting links are easier if you know someone to network with.

And if you don’t want to see if from the search engine perspective, plunging into a competitive niche also means more partners to promote your products. If you’ve ever struggled to find affiliates to promote your niche product, you should know what I mean.

Competitive niche usually means more and better products to choose from, more affiliate programs, more everything.

I could go on and on with examples but you get the idea.

Before You Dip a Toe into Shark-Infested Waters

Be prepared. Despite all the great reasons to play in a larger pond, it is not for everyone.

Unless you have a unique selling proposition, you should not try to compete with the sharks, or they will eat you for lunch.

On the other hand, if you have something valuable to contribute back to the niche, or if you have a tested product idea that will be accepted by the market, there is no reason why you can’t conquer a share of the niche.

At the end of the day, if you have something interesting to offer, you are doing people a disservice by not taking the necessary steps to contribute.

It may take a lot of brainstorming and planning. You may have to play like the big fish but if you are ready then jump in.

Those sharks who are already dominating will thank you too because soon they will have another great partner to link to and promote. By nature, this process will push the less interesting products out of the market, which is what competition is all about.

Keep in mind that in order to make six or seven figure online, you don’t have to dominate a niche, although it certainly sounds nice. You only need a small share of the pie.

No matter which path you choose, remember that it never is a good strategy to start a blog where you are the only one who blog about the topic. That usually means other than your spouse and mom, no one will read it.

Your turn. What do you think about this strategy? Are you a shark or a small fish? What’s the reason you pick your niche? Let’s start an interesting discussion.

Hendry Lee helps bloggers overcome strategic and technological challenges in starting and growing their blogs. He also writes about blogging at his blog Blog Tips for a Better Blog – Blog Building University. While you are there, download your free eBook and subscribe to his blogging e-course where he reveals his secret about blogging and content writing!