Finding your Niche
Finding Your Niche
By James E. Lee
Building a niche for yourself in this industry will lead to a solid foundation from which to build and grow your business.
As a young boy of twelve I sold my first stamp at the junior’s member meeting of the Beverly Hills Philatelic Society which met at the Ridge Park field house on the southwest side of Chicago. That transaction sparked a dream of some day becoming a full time stamp dealer. Twenty-eight years later I seized upon an opportunity to leave the real world and fulfill my dream.
Prior to entering this business full time I had been selling off duplicates from my philatelic library for about four years. Several opportunities to buy and sell collections had also added to my confidence that I could make my living selling stamps. My experience in business forced me to develop a business plan. About six months into my new career I came to the realization that one could not make a living by just selling literature and stamps. Everyone sold stamps, the competition was intense, and the capital requirements at the level that I wanted to compete were astronomical. A new business plan lay on the horizon.
Literature sales and opportunities to buy libraries were growing at a very steady rate and providing a very respectable margin of profit. The stamp sales curve was not meeting the goals that I had set and the margins were less than impressive. The comparison of the two categories lit up the proverbial light bulb in my mind. One niche was setting the world on fire and the other was just smoldering. I came to the conclusion that I needed to drop stamps and find another area to develop. Further examination of the results told me that I had very little competition in the literature category and I needed to really promote and work toward dominating this segment of the market. However, literature alone would not carry the day. Besides the lack of competition, my overall knowledge of philatelic literature (gained form years of collecting books) had aided in achieving great results. Were there any other segments of the market to which I could apply the same approach?
I took an inventory of my other interests and areas where I felt I had a strong knowledge base. Prior to entering the stamp business, full time, I had collected essays and proofs, with an emphasis on the 1861-67 issues, Civil War material and fancy cancels. My other hobby focused on studying American history from 1850 to 1870. My collecting experience and collective knowledge of history lead me to the development of two other market segments: essays and proofs, and postal history (I flirted briefly with fancy cancels as well).
Let me take you through the thought process and action plans that were used to develop these market segments. You can use this same process to continue the development of your own business.
The first thing I did was look for market segments that were underserved, had potential for growth and where my knowledge could give me an edge. I studied ads in Linn’s and Stamps Magazine and examined the dealer information listings in the ASDA directory.
Once I had had determined the segments that offered the best opportunity for success I rented the APS mailing list which contained the names and addresses of collector members who had an interest in these areas. To my surprise the number of collectors listed was greater than I had expected. This list then served as a base from which to grow my business.
Next I honed the focus of my ads to concentrate only on these three areas. All of my show signage and promotional literature was created to dovetail with this focus. However there was a need for a platform that my media plan could not meet. This need led to the development of my quarterly eight page newsletter which went on to grow from a black and white to a 16-page four color publication.
My newsletter, James E. Lee’s Philately, provided a platform to present material to my market and gave me an additional opportunity to write about my areas of expertise. This publication proved to be one of the most important marketing decisions I ever made. It started with a base of about 400 nine years ago and today is read by over 1,000 clients.
As time passes and technology changes, opportunities present themselves to further your market penetration. The development of a website was the next important key to my growth. This allowed my marketing plan to reach the entire world and at very little cost. Today I sell philatelic literature, essays and proofs, and postal history all over the world.
The last piece of the puzzle came to me about three years ago. One could further exploit the Internet by sending out periodic offers to all of the email addresses that had accumulated over the years. This has proved to be a very effective marketing and sales tool. It keeps you in regular contact with your client base, again with very little cost involved.
As you grow your business be sure to develop the important niches where you have an opportunity to dominate. If you find an opportunity to develop a niche but don’t have the knowledge, it doesn’t take that much to go out and acquire it. Be sure to take the time to develop a good and well thought out marketing plan to reach this new segment of the hobby. And here’s something really important: make sure you have a way to effectively measure your results. Don’t be afraid to fail and start over again. All business experience is positive in the end if you learn from it.
Jim is a member of ASDA his philatelic business is, James E. Lee, www.jameslee.com and he can be reached by email at email@example.com