Selling In a Niche Market: How Purchase Order Financing Can Help

Running a successful business in a niche market can be a rewarding experience if you do it well. Niche markets come with unique challenges and benefits, and while they are not for everyone, for those who succeed, selling in a niche market can be a rewarding and profitable experience.

One way to become successful in a niche market is to use purchase order financing to turn the cons into pros, and to make the most of the opportunities niche markets present. 

Pros and cons of a niche market

The pros:

• Being on a short list of options for customers. 
• Having a clearly defined target audience. 
• Selling to a tightly knit and well-connected community. 
• Having less competition than more crowded markets.

The cons:

• Having a small margin for error or mistakes.
• More limited options for finding equipment or suppliers. 
• Selling to a smaller community of customers. 
• Fierce competition for the customers in the smaller market.

A pro can quickly become a con in a niche market if handled incorrectly (for example, selling to a smaller customer base). If a business can complete orders quicker with high quality, the smaller customer base will work in its favor with positive reviews and word-of-mouth recommendations. On the other hand, if a niche business is unable to fulfill its orders, it can become marked with a bad reputation among customers who will give negative word-of-mouth reviews. 

How purchase order financing helps you succeed in your niche market

Thriving in a niche market means being the bigger fish in a small pond, which requires resources. Purchase order financing is a type of short-term financing that can help your business pay for the inventory needed to fulfill incoming customer orders. Businesses often use purchase order financing to:

• Fulfill large orders they cannot afford to fill alone.
• Face seasonal or short-term spikes in sales.
• Keep up with customer demand without taking on traditional debt.

Niche markets have clearly defined target audiences with customers who know what they want. These customers will give positive or negative feedback to the rest of the community. Purchase order financing will enable your business to stand out as you will be able to fulfill larger orders at a pace that surpasses your competition, leading to a faithful customer base and a strong reputation in the community you sell to.

What to look for in a purchase order financing partner 

Businesses want to choose well when picking a purchase order financing partner as their name and way of treating suppliers and customers will become connected to the business’ name and reputation (of even greater importance in a niche market). When looking for a purchase order financing partner, business owners want to find a company that:

• Is attentive to detail. A purchase order financing company will handle transactions and communication with a business’ suppliers and customers, so look for someone who will do it well and not overlook important details or information that create frustration and poor customer experience.
• Has a high rate of success among customers. Business owners don’t just want financing; they want to work with a partner who is invested in the success of their business and will foster trust and good communication. Look for a purchase order financing company that is well respected and positively reviewed by customers.
• Is efficient. The more quickly and smoothly sales go, the more a business can complete, and the more customers it can satisfy—an efficient purchase order financing company will help accomplish this.
• Will do their homework on your niche market. Understanding the needs and wants of a niche market customer base is critical for success; businesses should partner with purchase order financing companies who will put in the necessary time and effort to understand the specific requirements of a niche market. 

Conclusion
Niche markets can be hard to succeed in as they present unique challenges and opportunities—purchase order financing can be a great option for niche-market businesses to gain an edge over their competition and build a loyal customer base. 

Are you a niche market business looking to partner with a purchase order finance company? We can help. Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.