eli5 What is a ‘Niche Store’ in the world of dropshipping and ecommerce?



thanks in advance

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Niche: “denoting products, services, or interests that appeal to a small, specialized section of the population”.

Say you want to run an online clothing store. You sell general clothing items that are useful to most of the population, but can be found pretty much anywhere. Why would people choose to buy from you, instead of from a more well-established company, or a mall/thrift store in real life that’s probably way cheaper? Your customer base is wider but you have a LOT of competition.

Now say instead of a wide variety of styles, you ONLY sell steampunk clothing, or platform boots, or something. It may seem like you’re limiting your customer base, but people who are searching for that will come to your store. It’s unlikely you’ll have competition. You can charge more and dominate the market for that specific niche.

There is an online store that sells gongs. That’s it. How big a market is there for gongs? Well, buddist temples, decor in a chinese restaurant, a karate school? I remember decades ago one of those saving and loan scam brokers used to bang one everytime the closed a deal. Across the country maybe a couple hundred.

A niche is a specialized category. On the one end, you have Target or Wal-Mart that sell good in a ton of categories. On the other end, you could have a business that only sells tape measures. A store that specialized wouldn’t work in the real world, but online you could do that and still find enough customers.