Monday, July 09, 2007

4 Things to Be Aware of When Building an Online Niche Business

From 2002 through 2005, I ran an online ethnic decor business, Ethnic Home Décor. The site featured ethnic décor accents for the home, eg, mudcloth pillows, ethnic candles, wall art, etc.
Even though I shut it down due to lackluster sales, it was fun and I learned a lot.

Why do I bring this up? Well, piggybacking on my 6/28 post about creating multiple income streams, I wanted to: (i) explain exactly how to go about creating an online niche business; and (ii) remind you that if you do decide to go this route, try and make it an offshoot of your current freelance business.

Eg, if you're a freelance writer, opening a CafePress shop selling t-shirts with your witticisms. Staying somewhat in the same line will make your online niche business so much easier than if you decide to start a separate venture in another arena altogether.

Remember, starting a business is a monstrous undertaking with no guarantee of success. Niche businesses, though, may offer a better than average chance for survival, for the following reasons:

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"Niche startups are good in that they offer you a chance to focus all your branding and marketing in one area and expand on those core customers as you grow your company [emphasis added]," according to Ira Davidson, director of the Small Business Development Center at Pace University in New York City. [Source:, "Scratch a Niche," August 2005]
So, how do you start an online niche business? I'll tell you by way of my story.

One Entrepreneur's Startup Story

Ethnic Home Décor grew out of my love for sewing. You can read the background details on, which featured the business in February 2005.

Website: Once friends started asking me to make a pillow for them one too many times, I thought, "Hmm, I should get a website."

So, I registered the domain name and built my website using FrontPage software. As I initially only had a few products, it was a very simple site. Following are some things to look out for when building your online niche website.

4 Things to Look Out for When Building a Niche Business

1. Website: If you can build your own website, do so. Use templates whenever possible - especially if you have little or no money.

There is so much do-it-yourself website building software out there that it's easy to learn how to build a site. And, it'll be cheaper because, trust me, you'll be changing it a lot - especially: (i) in the beginning; and (ii) if you offer different products.

DO get a dedicated web name and a reliable, but cost-effective host. Eg, at, you can register a domain name for as little as $8.88. You can even register one for as little as $1.99. I've been a user of Namecheap for years. I like them because they make it easy to transfer domain names, forward URLs, etc.

As for hosting, you shouldn't pay more than $10/month for hosting fees - at least in the beginning. If you start to get more traffic, you can pay for more space, but don't pay for more than you need up front.

Get with a host provider though who is reliable and offers expanded services because you don't want to have to migrate your whole store to a different host provider if you do grow exponentially.

2. Payment Processor: I signed up for a merchant account, which, if I remember correctly, costs about $100 to sign up and charged a monthly fee of $24.95/month, plus a percentage of each sale. Novice mistake!

Use a payment processor like PayPal. It's become much more accepted now than it was back in 2002 (it used to be looked on as cheesy and subpar).

It's FREE to sign up with PayPal, and they get a percentage of each sale. So, if you don't sell anything from your site, you don't pay anything.

3. Product Offerings: Wanting to round out my product offerings, I searched for vendors who sold ethnic products wholesale. Don't take on too many products at one time, which is a mistake I made.

You may wind up with a lot of unsold merchandise sitting in your basement.

To avoid this, look for vendors who don't require you to buy a lot up front. Many wholesalers have minimums, so expect that. So, by all means round out your product line, but don't be in a rush to do so with too many at one time.

4. Marketing: Building an online niche business - or any business for that matter - requires marketing. I employed free and low-cost methods like press releases, free article marketing and a newsletter.

I really kind of surprised myself in this area with what a little determination and a lot of effort brought. I managed to get the name out there to some impressive publications, eg, and The Wall Street Journal's

I even got a call from Essence magazine about being featured, but had decided to close the business before I managed to get a firm commitment from them.

If I had one thing to do over in this arena, I would have tightly focused my marketing more.

As a side note, I was running Inkwell Editorial at the same time, so was unable to give this one all the attention that it needed. That was a valuable lesson learned. NEVER try to run two businesses at one time, especially if your primary business is a freelance business -- not a full-time job that pays the bills.

Nine times out of 10, you're going to be working full-time while you get your niche business off the ground. To grow it into a full-time enterprise, you will have to be super focused in the time that you do give to it.

Online niche businesses are fun and you can avoid a lot of headache in the beginning if you keep the above in mind as you start.

Tomorrow's Post: I've secured our two employer panelists for the upcoming freelance writer's seminar in October. Tomorrow, I'll tell you who they are. This seminar is shaping up to be so much more than I ever dreamed possible. I'm so excited -- and lucky! -- to have nabbed these two panelists. I'll tell you EXACTLY why if you're currently a freelancer, or thinking about becoming one, you'll want to be hear what these employers -- who hire and deal with freelancers on a regular basis -- have to say.

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