this post was submitted on 31 Oct 2023
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This reply may be true for certain industries but for other areas, such as antiques and flipping, there is good reason to guard niches.
Not even other competitors but other suppliers (like thrift stores) can absolutely cut into profits.
Both still stand as small businesses, are their antique sellers that make millions pretax annual profit? Maybe. But I'm guessing 95% don't. And people going to thrift stores don't even clear 6 figures usually, but yeah I'm aware some do. Ecommerce is my industry so I'm not speaking out of ignorance completely. I don't know much about antiques but I've visited many antique stores and I would imagine most are high five figures or low 6.
So ill revise then, guarding niches are for very small entrepreneurs who can be infringed by other small entrepreneurs who would pursue microniches. But they're still inexperienced or low skill ceiling entrepreneurs. That's not inherently bad, not everyone should pursue being a millionaire or billionaire. But if they're not and don't have high levels of success in business which is unfortunately factually quantified by revenue or investment money raised, they shouldn't speak with authority... because they don't have any.
Another important lesson in business is knowing when you don't know. If you can't fathom situations where sharing about your niche would be incredibly detrimental, maybe your corner of Amazon reselling pet rollers doesn't afford you as much entrepreneurial experience as you thought.
An easy example is a company working in a blue ocean sector, which is a huge reason to become an entrepreneur. Do you think someone whose company invested millions in R&D or IP development should go bragging about their market on Reddit?
How about a sector with an unusually high profit margin, for whatever reason? These exist all over and many businesses became huge by finding and exploiting these before anyone else.
You could argue that your IP should protect you, but anyone who's experienced with IP knows it's a bandaid or stopgap in many cases. You could argue if you're Mr Hotshot McBusiness then you shouldn't worry, because you're the only competent person in your industry, but there's a world where other competent fish moving into your pond could erode your competitive edge months or years earlier than it would have.
What is the profit margin in pet rollers like? Since we're all in a sharing mood?