Starting an Online Business All-in-One For Dummies®, 3rd Edition

Deciding to Sell a Niche Product

When thinking about a niche market, imagine the market in terms of a pie. The whole pie represents an entire market — one that's usually well established. But cut out one piece of that pie, and that piece becomes a smaller market all on its own. You no longer concentrate on selling the entire pie. You now narrow your focus to that single slice.

The pet industry serves as a real-world example. More than 62 percent of U.S. homes own a pet. As you might imagine, that adds up to a lot of potential when it comes to pet-related expenditures. Pets do indeed represent a multibillion-dollar industry, with nearly $51 billion expected to be spent in 2011. Of that amount, approximately $11.4 billion is expected to be spent just on pet supplies and medicine, according to the American Pet Products Manufacturing Association. Within that total market is pet insurance, which is a much smaller, but growing, niche.

Research shows that pet owners spend close to $1,000 per year, on average, on veterinarian bills. Moreover, surgeries or the need to treat serious illnesses can cost more than $5,000 per procedure. In 2011, pet insurance premiums are estimated to double from a few years ago, to $374 million. Even so, only 2 percent of pets in the United States are currently insured. These numbers show both a true demand and an opportunity for growth in this niche service offering

To answer the demands of this customer base, Web sites such as QuickCare Pet Insurance Programs ...