When Niches Become a Race to the Bottom

You may win the race… but the finish line leaves you stuck, underpaid, and boxed in.

“Find your niche.”It’s advice we hear everywhere in business. Specialize. Focus. Own your corner. But a niche can also become a trap.

When the market is too small, too many providers end up competing for the same clients. And when the service looks similar on the surface, there’s one quick way to stand out: cut your price. That’s the start of the race to the bottom.

The problem with going too narrow

• Crowded ponds: Too many specialists in a small space dilute demand.

  
  

• Price wars: If the offering is seen as interchangeable, cost becomes the only differentiator.

  
  

• Specialist paradox: Ironically, the more niche you are, the easier it is to be seen as replaceable within that narrow slice.

  
  

What gets lost

This race isn’t just about money. It drains creativity, damages reputation, and discourages long-term investment. Professionals stop innovating when they’re stuck surviving. Clients learn to expect bargain rates as the default.

The smarter play

• Reframe: Position the same expertise for larger markets.

  
  

• Layer value: Pair niche skills with strategy, coaching, or transformation.

  
  

• Set direction: Either claim premium status in the niche or broaden scope before the floor falls out.

  
  

Bottom line

A niche is only powerful if it connects to something bigger. One that grows with you. Otherwise, you may win the race… but the finish line leaves you stuck, underpaid, and boxed in.