How To Find a Profitable Niche for your Craft Business

Whether you’ve been selling the same item for years or your product is still in the planning stages, it’s important to be continuously looking for ways to improve and stand out from the crowd at craft shows or on Etsy.

This is where a niche can be helpful.

The more you can narrow your product offering, the easier business becomes.

 

Why your craft business needs a niche

The last time you were at a craft fair or browsing Etsy, how many vendors who knit/crochet did you notice? What about jewelry vendors? Or vendors who make soap?

Do you remember their business names?

If you couldn’t remember the name of a soap vendor and you wanted a friend to be on the lookout for them at the next craft fair, how would you describe their products? 

They’re selling soap in the shape of a rectangle. Each bar of soap has a cardboard sleeve around it and they have a wide selection of scents.

That would describe the majority of soap vendors.

Now imagine describing a business with a niche soap product. You still can’t remember their name but…

They sell soaps in the shape of chocolate and candy. Their labels are bubblegum-pink and turquoise and look like candy wrappers. All of their soaps are chocolate or candy scented, you can smell them from a mile away.

How easy would it be to find that soap maker?

Their products would be recognizable, even without knowing the logo, display, or vendor.

That vendor is also memorable and if you don’t buy from them, it would be hard to find something similar at another craft show, store, or on Etsy.

Narrowing your products can feel like you’re stifling your creativity but focusing on a niche gives you many other ways to be creative, all of which will help you stand out and strengthen your brand.  Here are just a few benefits:

• Make more sales – you would think a smaller market equals fewer sales but not so. Most businesses are going after a big piece of the pie leaving the smaller piece available for you. Less competition equals more sales.
• Build authority – you become known as ‘THE’ person to go to when people are looking to fulfill a specific need. Your customers will feel as though they’re working with the best due to your expertise.
• Charge more – when you’re known as an expert and the best in your niche, you can raise your prices.
• Competitive edge – competing on price is out of the question when it comes to handmade, you’ll never win. But if you offer something unique through your products, expertise, branding, etc. you instantly set yourself apart.
• Effective marketing – imagine you start with a product for women. Which women do you want to reach and how do you market to them? There are a million methods to exhaust and each person has a different need. Now if you target women who practice yoga, you know exactly where to find them and the product features that would interest them.
• Avoid analysis paralysis – quick, make a decision: chicken or beef for dinner? Easy right? Now decide the type of chicken dish you’ll have. There are hundreds of options making deciding harder, more exhausting and perhaps leading you to a bowl of cereal for dinner instead. This could happen to your shoppers if you have a table full of products and too many options to choose from (here’s how your creativity can kill sales). People like simplicity and the more choices they have, the less likely they are to make a decision to buy.
• Brand loyalty – when customers feel as though you understand them and are catering specifically to their needs, they become loyal to you. Instead of checking out the competition, they’re going to become repeat customers. They’ll also be more likely to tell others about your business.
• Get press – your business becomes a walking storyline when it’s distinct. How many newspaper articles have you read with the headline “Jane started a business”? Likely none because it’s not an exciting storyline. There are millions of people who have started a business. What are you doing differently from them? Working with unique materials, sending an important message, or selling exclusive products gives your business an angle others don’t have.
• Enjoy and perfect your work – narrowing your product offering allows you to work on what you love and make a real connection with your customers. It also gives you more time to perfect your packaging, display, website, etc. to appeal to your ideal customer.

 

How to find a niche for your craft business

Having an existing product line shouldn’t stop you from refining. All businesses require constant adjusting so don’t let a “but this is how I’ve always done it” mentality keep you in a rut or stand in the way of your best sales.

Use past sales to point you in the right direction and alternate products at craft fairs and in your Etsy shop to test their success.

As you grow, so can your product offering. But almost every great, memorable business started with a focus on one thing and doing it well.

TOMS is an extremely successful company and it launched with one style of canvas shoe and one message; for every pair of shoes sold, one pair was donated. Now they offer multiple styles of shoes, sunglasses and bags and support several different causes. They didn’t have the trendiest looking product or the widest variety but they built a name that spread like wildfire due to their simplicity and commitment.

Have an open mind as you read through the following ideas and brainstorm how you can polish your products to create your own niche.

 

1) Narrow down then expand

Look at what you already make and see if there’s a specific area you can focus on and become specialized in.

Consider the 80/20 Rule. It suggests 80% of your sales come from 20% of your products.

If you have 10 products, two of them are likely to generate 80% of your revenue. Which two products would those be in your business? Once you determine your best sellers, consider how you can expand upon them.

For example, if you make bath & body products and your most popular scent is chocolate, how can you give the people more of what they want? Think about extending that scent to hand lotions, bubble baths and lip balms. If those do well you can expand your products to include a candy theme, adding 5-cent candies, licorice, and bubblegum scents. All of a sudden you have a niche that markets itself.

 

2) Target a very specific customer

Consider who’s a perfect match for your products; who are they and why do they buy? You might think appealing to a wide range of people equates to more sales, however, it’s impossible to be everything to everyone.

The more specific you get with who you’re targeting, the easier it is to connect. And when you make connections, you make sales.

The easiest way to find a target market your business and products can connect with is to consider psychographics and the interests, hobbies, passions, activities, and lifestyles of a group of people.

For example, targeting people based on their love for practicing yoga makes business decisions easy (what types of scents, labels, branding, etc. would yogis be drawn to?), and it makes it easy to find and attract your target market. You can sell your soaps in yoga studios, place ads on yoga blogs or in yoga magazines, your yoga-themed soaps and branding will immediately grab the attention of people who practice yoga, etc.

Determine who you want to target (check out How To Find the Correct Target Market for your Craft Business) and make every aspect of your products and business the perfect fit for them.

 

3) Pinpoint your look

Can you focus your products on a specific material, method, color(s) or style? You quickly become an expert, create a signature style, and build a reputation as THE best when you can focus on one creative aspect.

For example:

>> a handbag designer may only work with suede

>> a potter may only offer stamped pieces

>> a jewelry designer may build a brand around turquoise stones

>> an artist may focus on pop-art style pieces

>> a soap maker may focus on floral scents and floral shapes

Try developing a signature style (here’s more info on how to do that) that your business becomes known for.

People should be able to recognize your products as yours, without having to see a name or label attached to them.

 

4) Lean away from the masses

Take a look at the vendors selling in the same category as you at local craft shows or on Etsy. Which product features do they have covered? What are they missing?

Make a list of things they’re doing well and where you think they’re lacking. See if there’s an opportunity for you to be on the opposite end of the spectrum.

If competitors are using a similar style or making the same type of items as you, move in another direction, even if you were there first.

When everyone is selling similar products, it’s hard to stand out and it becomes a buyer’s market; tons to choose from and they’ll likely head to the lowest price.

For example, a vendor who crochets may notice that other vendors are offering hats in the shape of the latest Disney character (which, by the way, is copyright infringement unless the proper product licensing agreement is obtained, please see LAWS FOR SELLING HANDMADE). The customer they may be missing is the mom of a child who doesn’t watch Disney movies but draws their own characters and would love to see those characters recreated in a hat design. The vendor could stand out by offering highly customizable character hats using one-of-a-kind patterns.

Create a competitor analysis graph, as explained in this article, which will make it easy to find areas of opportunity.

 

Tips for finding a good niche

Finding the right niche for you and your craft business won’t be easy. It will require research and testing to be sure you’re going in a direction that will be profitable. Here are a few tips to keep in mind.

 

Make sure your niche is profitable

Don’t go too small with your niche, narrowing down to the point there aren’t enough customers.

Use past sales to show where profits are or research different markets if you’re starting from scratch.

If you can’t find any competitors for a specific product, it may be a sign there isn’t much demand for it.

Take a look at big brands in your category to see which needs they cater to. These will indicate a profitable market.

For example, a skincare brand may offer a product line for dry skin, oily skin and mature skin. Any of those would be a good place to focus when deciding on a niche and developing products.

 

Mix and match niches

Depending on the product you sell and your competition, you may need to combine a few methods to find a good niche.

For example, creating skincare products for people with oily skin isn’t that revolutionary; it’s not hard for consumers to find products for oily skin.

However, combining “oily skin” with a psychographic, such as people who live clean, toxin-free lifestyles, may help carve out a profitable niche. Natural, organic skincare products for oily skin. 

 

Make change slowly

Always use past sales to dictate the direction you go in, and make changes slowly. Don’t remove half your products from your Etsy shop of craft show table. Simply give the products you want to test more real estate.

You can keep the products you’re thinking of phasing out in your Etsy shop; just keep those listings lower in the shop results. At a craft show, give less space to the products you want to phase out, or keep them behind your table.

Pay close attention to your sales, and at a craft show, watch how shoppers react to your new niche products.

Follow the numbers and slowly create more of what sells and less of what doesn’t.

 

I hope this article helps you find a profitable niche for your craft business. Let me know in the comment section if you have any questions!