It’s almost the holidays and you know what that means? The Victoria’s Secret holiday catalog will soon be hitting mailboxes. Gracing the cover is usually one of the retailer’s gorgeous “Angels” sporting a bra that either makes you go “Ooooo!” or “Huh?” Encrusted with diamonds, precious gems, and gold, this bra will bust almost anyone’s bank account with an astronomical price tag that could be in the millions (the 2012 “Fantasy Bra” was over $2 million). So… who wants a $2 million bra?
Granted, this jeweled concoction is a showcase piece to get attention. But once the photo shoot is over, who’s going to buy it? Obviously someone who’s not concerned about covering cleavage or costs! The list of potential buyers is short indeed, making this an extreme example of a limited market.
What about your market? Do you have a totally unique product or service that has a limited number of ready, willing and able buyers? In the quest to create a name and niche for themselves, entrepreneurs can often slip into “$2 million bra” territory. Their offerings are so one-off, off-the-wall or custom that the appeal and market volume are limited.
As well, businesses with create-to-spec services and products (maybe even a gemstone-studded bra?) run into a related problem. They don’t scale. The slice of the market they can pursue is restricted by the time, energy and other capacity factors of their operations.
How do you know if you have a limited market? Here are some of the markers:
- No Competitors. While entrepreneurs might be enamored with the idea of being a monopoly provider, it’s actually one of the most difficult selling scenarios. It means one of two things: 1) You’re competing against everything else your customers can buy; or, 2) You’re competing against nothing, make that buying nothing.
- Few or No Stats Exist for Your Market or Niche. Although many don’t, prior to entering any market, business owners are well advised to estimate the total market, customer base and growth potential that exists for their company’s niche. Drill down to a level that is relevant—by product, geography or other demographic factors—to determine viability. If those types of stats are difficult to find from government and database sources (SBA, Census, mailing list providers) or trade associations, you may have a difficult time finding interested customers.
Let’s say against better judgment you decide to pursue this limited marketplace because you’re emotionally attached to it. What are some strategies you can employ to create an acceptable sales volume?
- Revise, Repackage, Repurpose. Is there a way to revise, repackage or repurpose your company’s offerings to appeal to a larger swath of the population or additional markets? Example: An oil painting artist whose works sell in the tens or hundreds of thousands dollars in the art gallery market could create works that might be appropriate for use in commercial buildings.
- Stream/Line. Is there a less expensive or related product or service line you can offer to create multiple income streams to fill in the gaps between showcase projects? Example: Our oil painting artist friend could create a line of greeting cards or prints to sell to the masses through sites such as RedBubble.com, which would require minimal investment.
So when considering a new business or market, just make sure it fits and can support you.
