Competition vs No Competition Markets: Which Has Made The Most Money For You?

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There seems to be two schools of thought when it comes to Internet marketing.

School of Thought #1
One school says the less competition a market has the better your chance of success. In fact, mini-industries, products and services have been created around that premise.

School of Thought #2
The other school of thought says the more competition a market has the better your chance of success.

I notice this seems to be confusing the heck out of most newbies and a lot of oldies as well.

So, my question to the experienced. What has "actually worked" best for you.

Please no theories or speculation. Only those who can speak from experience (to avoid heated debates). No one can argue with a persons experience, right?

Thanks for your input.
#main internet marketing discussion forum #competition #made #money
  • Well, there are so many other variables that come into play other than competition. But okay, I'll bite.

    Hands down, the more competitive markets (and niches) have done much, much better for me. They generally have more buyers, more opportunities for strategic alliances (such as JVs), and they usually have more distribution channels to reach my core audience.

    For me, more competition = more profit.

    RoD
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    • I agree with Rod Cortez.

      Also, any market that is "low competition" and also very profitable will not remain low-competition for long.

      For a while (I think in the 90s, maybe early 2000s) Blue Ocean strategy was a hot topic. Its basic premise was that a business needs to find or invent non-competitive markets (blue oceans) because they're more profitable than competitive markets (red oceans).

      That theory may have some value in terms of opportunistic niche marketing. But as a long-term business strategy it's pretty shaky. If you continue to abandon profitable markets as soon as competition starts showing up, you will repeatedly put your business at risk (what if the latest "blue ocean" doesn't have any fish in it???). You also may have a hard time building and capitalizing on brand equity and long-term business relationships.

      Competition is where it's at .
  • I think demand is the variable of huge consideration here.

    Whether or not there's competition doesn't really bother me... It's whether or not there's demand.

    Are people buying XYZ? Then give me a crack at selling.

    (I always return to the McDonalds analogy. Arguably, their food absolutely sucks. But there's ALWAYS a demand for fast hot food, regardless of who else is offering a similar service).

    PS: Literally every penny I've ever made has been the result of DEMAND. Sure, it can be nice to find a hot "exploit" (where there is massive demand and low competition), but that rarely lasts for long right?

    But demand... Demand will outlast any of us. So... The best advice I could ever give... Is to learn how to channel that demand better than anybody else.
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    • Competition and demand normally follow each other right. If you have a market with a lot of competition, that usually signals demand. Can you think of any exceptions?
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  • Ususally niches have high competition because the demand is there.

    RoD
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    • I do a bit of both but as others have said, the money is where the competition is.

      It's easy to throw up a small niche blog on a low competition market (I've never come across a no competition market) and earn some money quickly, but the low competition usually doesn't last forever. When other marketers see you promoting something they're usually quick to jump on the bandwagon.

      For bigger authority sites it's always best to go for a slice of a relatively competitive market. You have more scope for traffic, more products available to promote etc.

































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    • What a great post! You nailed an important distinction. I was reading kindsvater's post and thinking "You know, he's right--for certain kinds of business models." Clearly, the "low competition" model works for him largely for reasons you cover. Thanks for offering your insight.

      My approach is focused on the long-term--I want to win customers who get to know what I offer, need it on an ongoing basis, and buy over and over. And I don't rely on SEO at all. For me to build that up over time and then pick up stakes and move due to competition would be self-defeating.

      I entered a competitive market on purpose--but demand outstrips supply in that market. So I can't say I ignored competition completely. As Sarevok said, there has to be plenty of demand regardless. Otherwise you're either in a low-competition niche where there's not much money to be made, or a high-competition niche where there's money to be made but you're not likely to make any of it .
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  • Obviously when it's a market with a lot of competition it means there is a lot of money to be made in that market.

    However, i believe in the reverse market research theory, which is: How can i add value to the marketplace?

    If there's a lot of competition, and you are able to add value for the consumer, then you shouldn't worry about competition too much. The consumer always decides and should always be put first.
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  • The niches where the money is tend to get found. Hence competition...
  • I've always stayed in niches where there is high competition. Niches with low competition will eventually have high competition. I've made as much as $1400 in a day promoting click bank tv on pc products targeting low competition sporting event keywords. There are always low competitive key word terms you can target that are related to the competitive niche you are promoting. Also cross promoting is a good way to make money in a competitive niche by offering a product that adds value to an already popular product.
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    • Not always. Sometimes they stay low or dwindle if one person finds, creates or improves a tactic, technology or barrier (as kindsvater stated) others can't match.

      That one point alone is worth paying for. That idea is Money! Good share.
  • Competitive niches have more competition for a reason:

    *More traffic
    *More customers
    *More products to promote
    *More potential money to be made

    With competitive niches its easier to get started as there are so many ways to get your face in front of your target crowd.
  • Banned
    Excellent question! Believe it or not, the markets that have no competition will be the most profitable. Other internet marketers will disagree because they don't understand the dynamics. Markets with little to no competition are filled with hungry buys as opposed to high competition markets that are used to seeing "that offer" before. You see what I mean? Now don't get me wrong, you can make lots of money in both arenas. This is why its important to do a little testing here and there so that you can find out for yourself what I am explaining.
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    • Banned
      I always get a kick out the "if they disagree they don't understand" rebuttal.

      Based on what you posted, I have a feeling you don't understand. If you are putting out offers that are considered "that offer" then no wonder you need niches with no competition.
    • You make an interesting point, and I respect it.

      But what I'm experiencing more and more is no competition markets filled with free information researchers, freebies hunters and curiosity seekers.

      I'm personally finding it harder to find the no competition markets filled with hungry buyers. I've found them, but they usually have to be educated before they buy, sometimes a lot..I also notice I have to look harder each passing year.

      Plus, they don't stay low competition as long as they used to. Have you noticed any of that?
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  • Hmmm, I just don't see it that way Kindsvater. I'm not competing against everyone. Even in the most uber-competitive niches I can find inefficiencies in many of my competitor's business models. I can compete on price sometimes, though that's not usually how I position myself. I usually compete by having a better product, better operations, better customer support, and a better, more efficient promotional campaign.

    I do very well in niches that have little competition and those tend to be very specialized niches, but that's not where I make my bread-and-butter. Even though I do well there, I've done far better from a pure ROI perspective in niches that had more competition, as long as the demand was there.

    This advice is so spot on. Aside from having a great USP, a great way to compete is to "niche-down" and find a niche or a mirco-niche.

    Though it's not always necessary. Positioning also plays a huge role there too.

    RoD
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    • Good living examples, advantages and power of having a niche (I.M.O)
  • Banned
    According to me the low competition market is more profitable than competition market. In a competition market one businessman need to small profit due to heavy competition. while low competition market make huge business.
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    • Now are you basing that on your actual experience (numbers, income, profits)? Or are you saying that's what it should be? Just asking.
    • You know that for sure, because you've actually tested it in the marketplace yourself, with your product or service?

      If not, it's dangerous to assume, guess or speculate. The marketplace is like a volatile, contemptuous woman. As soon as you think you have her figured out ... she surprises you, changes or contradicts herself in unpredictable ways.
  • Competition is inevitable. What's important is you maintain a healthy one and keep yourself grounded
  • My greatest successes have been in conquering those barriers to entry Kindsvater referred to, and creating my niches as Steve B explained.

    The kinds of IM businesses that create 6 figure paychecks, in my experience, are the ones that you build in response to an unmet market need. In my cases, there was no "demand" in the beginning because my markets were not aware of the idea until I introduced it to them.

    Once these markets see what I offer, fine-tuned for their specific business needs, and outside of the mainstream types of products and services typically aimed at them, they flood in. Click my sig link (Jack Gives Back) for one specific example. I have others.

    Interestingly, I have found that my knack is for doing it the hard way and creating niche industries singlehandedly. When I have tried to enter "commodity" type businesses, I have never had much success.
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    • Jack, the post behind your link is great! I did something similar with companies that were sued over issues with their employee benefits programs. We turned $90 in direct mail costs into $250k in billings. Unfortunately, collections became a problem and the project tanked. (Maybe you can make it work!)

      I'm curious: have you seen your model disrupted either by competitors or by the large intelligence aggregators (Lexis, Thomson)? The latter in particular have been expanding their product lines. Do they, or might they, start providing the same information that you do? This would be interesting to hear given our discussion about competition moving into low-competition markets.
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    • Congrats, Excellent example and story:

      Instead of limiting yourself to just trying to find a niche, you took the ultimate step.

      You created your own niche, your own niche market and your own niche service. You Own It! ... You da man!

      Don't be surprised, if someone tries to buy you - when they discover it's not worth there time and energy to try and compete with you. It's the new normal for people who create their own niche product or service these days. Have you noticed?
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  • I'm going to argue for more competition here.

    And here's why: competition gives you something to play off of. A very competitive market can have its problems, like compressed margins. But a large number of competitors means there's also room for one more. Consumers haven't settled on a final choice - they're out, they're looking at different choices, they haven't settled on something yet. There's still room for you to carve out a niche.

    On the flip-side, a market with little competition is ripe for disruption - which could be profitable, but usually isn't. Case in point? T-Mobile US.
  • I think you are right in recognizing that this is not quite a scientific sample and it is a bit dangerous to try to draw valid conclusions from it.

    However, I am not surprised by the results. From my years of lurking and participating here, it is pretty clear to me that there is a strong herd mentality toward finding "the formula" and then copying it exactly, right down to the market.

    In my opinion, that leaves little room for failure, and any success is going to be as short-lived as it takes for Google to disapprove, saturation to develop or the "next big thing" to arrive.

    Essentially, there are throngs of struggling IMers who are gambling addicts, looking for the magic table they can actually win at.

    My approach is 180 degrees from that. I get to know an industry, go to their conferences, speak personally with my prospective customers, look at emerging problems and think long and hard about what unique abilities I can offer to solve those problems. When I figure it out, I build an actual business, not just a website. And I develop solutions to real-life problems, not just "products" or information. And then I utilize the internet to do my marketing and fulfillment.

    It is a different approach to IM from most people here. I know I am in the extreme minority. But I also know that the next Google update won't wipe me out, that 20 new competitors won't pop up tomorrow morning and that I have built something very real, that stands up in the brick & mortar world as well as the net.
  • Economics says that perfect competition or a market with intense competition but unlimited sellers, is best for both the buyers and sellers. And this is exactly my experience as well. Exactly why we see so many shopping malls come up. Where many shops/restaurants within a few meter of each other, compete fiercely. Yet, all do well.
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    • "A rising tide lifts all ships in the harbor."

      Steve
  • naturally, the niches with more competition always perform better. Why? Because people are competing for them... They wouldn't compete if there wasn't a good reward at the end.

    Why compete in 10 low niches, just to earn the same amount as one site at the top of it's game in a competetive niche.

    I've been working on a website for 2 years and it's still not top in Google, but when it is, and I'm only a few months away now - It will be an authority website, with LOTS of content, Strong SEO and pulling in about £4000 a month.
  • Low competition = Small market size

    That means if you are analyzing any niche and got that there is low competition that would not mean that there is a great market to serve because that may also mean, there is small market or a market that is not responding.

    So play in a competitive market and you'll feel good at last.
  • Big and competitive niches have always worked well for me. Very easy to get traffic, lots of products to promote, lots of demand etc.
  • For those who love competition here's something for ya ....

    - About 12,760,000,000 results in Google. Yes, competition with almost 13 billion web pages! Are you salivating yet?

    - An Evergreen product used year around, year after year.

    - Hundreds of millions, if not billions of people have used it at least once.

    - Constant demand.

    - Tons of brand recognition.

    Are you ready to make your fortune?

    Here we go ....

    Your keyword to target is:

    google

    Too narrow you say?

    OK.

    Here's a related niche with additional competition just waiting for you to come in and blow them out of the water:

    Even Google doesn't have one of the top ranks in this ultra-competitive market.

    Your keyword is ...

    search

    Let us know how it goes for ya! Seriously. No need to throw me a few million from all the profits you'll make.

    .
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    • Just because some of us like playing in competitive markets doesn't mean we don't pick our fights carefully . "Competitive vs. non-/low-competition" is fine for a healthy, stimulating discussion. But the downside is that it makes it seem like a black and white issue.

      There are shades of gray--for instance, consolidation. I wouldn't be interested in launching a search engine...but lots of people sell SEO services and make good money. Both are competitive, but the search engine market is highly consolidated. SEO, on the other hand, is about as fragmented as an internet market can get, with everything from well-organized agencies to fly-by-nighters working out of their mom's basements before their shift waiting tables.

      I'll gladly duke it out in a highly competitive but fragmented market. But go up against a market where King Kong is sitting on most of the business? No thanks.
  • Niches have strong demand because there is a lot of money.

    Lack of competition would mean lack of demand. It kind-of translates into that.
  • Well, there is no end of this kind of thoughts and you will always find someone against your opinion. I will suggest you to go for no competition market as it is the best option for a newbie. When you become successful at no competition, you will understand how to play with competitive market.
  • I should point out that whilst I said I've done better in competitive markets I still selected sub-niches within those markets.
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    • Good point Stuart. I think maybe that small point gets lost in translation sometimes.

      Seeking a competitive market.
      But drilling down to less or non competitive sub-niches within that (competitive) market.

      Result: Getting the "demand or hot buyers" of the competitive market ... Plus the sub-niche or micro niche benefit of the less or non competitive market.
  • It all depends on your skill. If you can compete and be #1, then the more competition the better because product/niche with high competition means that product/niche is high demand. If you can't compete and can't be #1 then choose the one with less competition.
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    • Or research, drill down and find a sub-niche or micro-niche within that competitive market.
  • Yeah I wouldn't go head to head with slimfast or weight watchers for example as their budget, marketing team and staff far outweigh (excuse the pun) mines.
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