Is A Market Ever Oversaturated?

By Richard N Adams
Posted Tuesday, August 31, 2004

I got asked an interesting question last week.

A guy new to the Internet emailed me wanting to know if there was such a thing as too much competition within a market.

It took me a little while to think about such an excellent question before I replied.

Here's what I told him...

The dot-com bubble (and subsequent burst) fuelled stories of "first mover advantage". The myth went that companies like Yahoo that got in early, established themselves within the marketplace and built strong brand awareness were untouchable. The "800-pound gorillas" in nerd-speak.

But didn't Google launch well after Yahoo, in an already crowded market?

Infact, according to some search engine industry experts, Google now serves up around a third of all searches online. Not only have Google outcompeted Yahoo, they even let Yahoo use their search results.

How did they manage this?

They took a model that was already working, then improved on it.

I don't think there can ever be too much competition in a market for a new face. My experience is that no matter how busy the field or how hot the competition - there's always space for someone else in the niche.

But there's one proviso.

Whatever anyone else is doing - you need to do it better. Do it faster, cheaper, more honestly, with a wider range. Or, of course, more relevant search results.

If you do it *really* well, your competition may even end up like failed search engines Excite or Infoseek - extinct.

Remember that being small can be distinct advantage for you. It enables you to move "under the radar" of larger competitors, using better marketing and customer service.

There's always an angle someone hasn't thought about. Using search engine optimization for less popular keywords has allowed me to take my merchant account site from strength to strength.

Consider another example - the hotly contested Internet marketing sector.

Time after time, those who have made it big will tell you that if they were starting again now they'd avoid the market like a plague.

Too much competition they say.

The industry is saturated they tell you. Competition is enormous, and many of these entrepreneurs are search engine experts to boot.

So you'd have to be mad to try and enter this industry from a standing start, right?

In December 2002 a brand new Internet marketing book was launched - entitled "Under Oath - The Whole Truth". I personally own a copy and can attest to what an excellent book it is.

What is so interesting is that it's full of brand new information. It stands out from the crowd because it is so free from the constantly rehashed themes so common in these circles.

It's so good infact that according to his press releases and newsletter, the previously unknown author, Shephen Pierce, sold 1,500 copies within the first two weeks of launching it.

His website, (http://www.the-whole-truth.com/), went from nowhere to within the most popular 2000 sites on the Internet as ranked by Alexa.

And all because his book is new, exciting and more original than most of his competitor's.

So I'll ask you again.

Is there ever too much competition?

About The Author
Richard Adams, a former zoologist, spends most of his time rating and reviewing online payment processors for his website at (http://www.merchantaccountforum.com/). He also runs a monthly newsletter called "The Ecommerce Journals" - subscribe free at mailto:subscribe@merchantaccountforum.com
radams@merchantaccountforum.com