Niche internet marketing was a mystery to me when I first started in the online business world. We hear about internet marketing so we think it might be a good way to start a home based business. When we ask how we start a home based internet marketing business, the first thing someone says is “find a niche.”

If you are as confused as I was when I first had someone say this to me, I’ll offer a little primer on what niche internet marketing is and how to look for profitable niches.

In marketing, whether it is online or traditional, a niche basically relates to a product or service that occupies a special area of consumer demand. It usually occupies a very small corner in a broad market that relates to a certain specialty that addresses an unmet customer need. When running a website, you position the product to meet the needs of the niche. It is through this relationship of common product and unique need or unique product and unique need, and the marketing directly to a small segment, that you are able to lock down niche internet marketing with a corner of the market for the niche product you are trying to promote.

When you are identifying a need in the market, it requires you chunk down a market into small, fragmented pieces and find a way to address the need. For example, if you have identified a market for dog shoes you need to look for a niche within the market. What about dogs shoes for three-legged dogs? It then seems reasonable that pink dog shoes for three-legged dogs would be a very specialized niche.

While the above example may be amusing, there are real market demands within niches that may seem even stranger than that example. If you are looking to define a niche, you must drill down from the starting concept, such as dog, and think like dog owners with special needs dogs.

Finding a niche simply requires finding a market segment that is small but has potential profit. Sometimes the market is very small, so in order to maintain a profitable number of sales, the strategy depends on retaining the loyalty of customers so they will be repeat customers on your site.

You have the ability to feed your inner creativity with niche marketing as it is only as broad or narrow as your creativity allows. You can find one-of-a-kind opportunities and market to groups that are wildly unique. Niche internet marketing uses different approaches than other online marketing strategies because the market in a niche has been segmented down to a very small, unique group of people with very specific buying needs. The reason niche internet marketing is so successful is that when this small group of people looks for a product they are typically ready to buy.