Online services like Netflix are giving Blockbuster a terrific run for its money. In fact, some experts believe Blockbuster may have to file for bankruptcy sometime within the next six months. The problem for Blockbuster is that it has to be a mass marketer and stock DVDs that will appeal to the largest number of people possible. On the other hand, Netflix is both a mass marketer and a niche marketer. Because it can offer more than 25,000 tiles (vs. Blockbuster's 3,000 DVDs), it has films for both those who want the really popular new releases and those with special interests. In fact, Netflix says that nearly 20% of its sales/rental are now coming from these "unpopular" special interest titles that are not available at the off-line stores. Another example of this is Amazon.com It has found that nearly 25% of its sales now come those "unpopular" special interest books that are not available at brick and mortar stores. What lesson is to be learned from this? What this suggests to me is that one good path to success for an Internet marketer is not to compete with the big boys, but to sell less by which I mean by selling a small number of hard-to-find products to a specific market niche. In fact, I think in today's competitive Internet marketplace, the smart marketer almost needs to find a niche within a niche. Again, take Netflix as an example. You can bet it wouldn't be offering 10 pages of military documentaries (a niche within a niche) if there weren't enough people out there who want to rent or buy these documentaries. Sell less for more Big online retailers like Amazon.com often have to compete on price since a popular book is essentially a commodity item. On the other hand, marketers who have found a very specific segment can charge whatever the market will bear as competition is not that much of a factor. For example, suppose you decide your market niche is books about the Korean War. There may not be as many potential customers as there as would be for books on WWII, but you can bet those people who are really interested in this police action, will happily pay full price for books that cater to their special interest. So, if you're looking for a way to make money on the Internet, don't try selling more. Try selling less. |
