Identifying Your Niche and Target Audience (The Student's Guide to Starting a Profitable Custom Merch Business) - Part 3

Everest Guerra

Everest Guerra

Student selling merch at campus festival

Welcome to part 3 of an 8 part guide to starting your own campus merch business. Each week we'll release a new part until the guide is complete. Once all issues have been released, we'll make the complete guide available in PDF form. If you have questions, comments, or suggestions, please send them to me! Hope you enjoy 👋


Understanding the Custom Merch Business - (The Student's Guide to Starting a Profitable Custom Merch Business) - Part 2Explore custom merch creation, its popularity drivers, and inspiring success stories from student entrepreneurs in this guide. Perfect for aspiring student entrepreneurs and anyone interested in the potential of this industry.

In this section, we'll explore the importance of selecting a specific market segment to cater to and understanding the unique needs of your target customers. By focusing on a niche, you'll be better equipped to create custom merchandise that resonates with your audience, ultimately leading to a thriving and profitable business. We'll delve into the steps for choosing a profitable niche, researching your target audience, analyzing competition, and validating your ideas. So, let's dive in and discover the keys to success in the custom merch business!

One of the most crucial steps in starting a successful custom merch business is identifying your niche. A niche is a specific market segment with unique characteristics and needs that your business will cater to. By focusing on a particular niche, you can tailor your designs, marketing strategies, and overall approach to better appeal to your target customers.

Finding Your Niche: Why It's Important

As a student entrepreneur, choosing a niche that you're passionate about is vital, but you must also ensure that it has profit potential. Here are some factors to consider when selecting a profitable niche and target audience for your custom merch business:

  1. Market size: Aim for a niche with a sufficient number of potential customers. Utilize tools like Google Trends, social media platforms, and keyword research tools to gauge the size and interest level of your target market, focusing on campus-specific trends and demographics.

  2. Spending power: Evaluate whether your target audience, such as fellow students or campus organizations, has the financial means to purchase your custom merch. Investigate the average income levels and spending habits of your potential customers within the university setting.

  3. Demand: Examine the demand for custom merch in your chosen niche. Identify gaps in the market that your business can fill, such as unique design concepts, product types, or unmet needs specific to campus organizations and events.

  4. Competition: Assess the level of competition within your chosen niche on campus. While some competition can be healthy, entering an oversaturated market may prove challenging for a new business. Consider how your connection to the university community might give you a competitive edge.

  5. Passion and expertise: Opt for a niche that aligns with your interests and expertise. This will not only make it easier for you to create high-quality products but also help you stay motivated as you navigate the challenges of running a student-led custom merch business.

Choosing a Profitable Niche and Target Audience

By nature of you reading this, you've already found a profitable niche to begin selling to! Collegiate organizations account for billions of dollars a year on custom merch spend, with Greek organizations alone contributing a significant portion.

If you're wondering how profitable your merch business can be, the first thing you should do is assess the market size of just your campus. We'll analyze the University of Michigan:

According to the University of Michigan's official website, the Ann Arbor campus had approximately 51,000 students enrolled in 2021. Let's use this figure as a starting point.

First, estimate the percentage of students who may be interested in purchasing custom merchandise. This percentage will depend on factors such as student involvement in clubs, organizations, sports teams, and other campus activities. For the sake of simplicity, let's assume that 50% of students are interested in purchasing custom merchandise.

Next, estimate the average annual spending per student on custom merchandise. This can include purchases related to university events, club activities, sports teams, and personal interests. Let's assume each interested student spends $100 per year on custom merchandise, as suggested in this article.

Using these assumptions:

Market size = 
    (Total # of students) 
  x (% interested in custom merchandise) 
  x (Avg annual spending per student)
Market size = (51,000 students) x (0.5) x ($100)
Market size = $2,550,000

Based on these assumptions, the market size for custom merchandise at the University of Michigan could be approximately $2.55 million per year. Please note that this is a rough estimate and the actual market size may differ based on factors such as student preferences, actual involvement in activities, and spending habits. Conducting more in-depth market research would be necessary to obtain a more accurate estimate.

Campus Market Size Calculator

Use the following market size calculator to estimate the value of different college campuses.


Market research is an essential step in identifying your niche and target audience. It helps you gather valuable insights about your potential customers, competitors, and overall market trends. Here are some methods for conducting market research:

  1. Online research: Explore social media platforms, forums, blogs, and websites related to your chosen niche. Look for common themes, interests, and preferences among your target audience.

  2. Surveys and questionnaires: Create surveys and questionnaires to gather information about your target audience's preferences, needs, and spending habits. You can use tools like Google Forms, SurveyMonkey, or Typeform to create and distribute your surveys.

  3. Focus groups and interviews: Conduct focus groups or one-on-one interviews with members of your target audience to get in-depth insights into their preferences and expectations.

  4. Competitor analysis: Examine your competitors' products, pricing strategies, marketing tactics, and customer reviews. Identify gaps in their offerings that your custom merch business can fill.

Analyzing Competitors in Your Niche

Before fully committing to your chosen niche and target audience, it's crucial to validate your idea to ensure its potential for success. Validation helps to minimize the risk of investing time and resources into a niche that may not be profitable. Here are some steps to validate your niche and target audience:

  1. Test your idea with a small sample: Create a small batch of custom merch to test your idea with friends, family, or potential customers within your target audience. Gather feedback on the designs, quality, and pricing. This will help you determine if there is a genuine interest in your products.

  2. Run a pre-sale or crowdfunding campaign: Launch a pre-sale or crowdfunding campaign to gauge the interest level and financial commitment of your target audience. This can help you validate demand for your products before investing in large-scale production.

  3. Analyze market trends: Use tools like Google Trends and social media platforms to study the popularity and longevity of trends related to your niche. This will help you determine whether your chosen niche has long-term potential or is just a passing fad.

  4. Conduct a SWOT analysis: Perform a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of your custom merch business idea. This will help you identify potential challenges and opportunities within your niche and target audience, and develop strategies to overcome or capitalize on them.

  5. Seek expert advice: Consult with industry experts, successful custom merch entrepreneurs, or business mentors to gather insights and feedback on your niche and target audience. They can provide valuable guidance and help you avoid common pitfalls.

  6. Monitor competitors' performance: Observe how your competitors are performing within your chosen niche. If they are thriving and expanding their product offerings, it may be an indication that your niche has potential. However, if competitors are struggling or exiting the market, it could signal a lack of demand or profitability.

By validating your niche and target audience, you will gain a better understanding of the market and increase your chances of success. Once you have confirmed the potential of your niche, you can confidently move forward with building and scaling your custom merch business.

Conducting Market Research for Your Custom Merch Business

Understanding your competition is vital for establishing a unique selling proposition (USP) and differentiating your custom merch business. Here are some steps to analyze your competitors:

  1. Identify your main competitors: Make a list of businesses offering similar products within your niche. Focus on both direct and indirect competitors.

  2. Assess their products: Examine your competitors' product offerings and identify their strengths and weaknesses. Consider factors like design quality, product variety, and pricing.

  3. Analyze their marketing strategies: Evaluate how your competitors promote their products. Investigate their online presence, including their websites, social media profiles, and advertising campaigns. Identify the marketing channels they use and the effectiveness of their messaging.

  4. Determine their target audience: Analyze your competitors' target audience and compare it with your own. Look for similarities and differences, which may provide insights into untapped markets or areas where you can better serve customers.

  5. Identify their unique selling points: Determine what sets your competitors apart from each other and how they position themselves within the niche. This information will help you find ways to differentiate your custom merch business and develop a strong USP.

  6. Assess their customer reviews: Investigate customer feedback on platforms like Google Reviews, Yelp, and social media. This will give you insights into your competitors' strengths and weaknesses from the perspective of their customers. Look for patterns and recurring issues, which can inform your own approach to customer service and product quality.

  7. Learn from their successes and failures: Analyze what has worked well for your competitors and what hasn't. Apply these learnings to your own custom merch business to avoid making the same mistakes and capitalize on proven strategies.

By thoroughly analyzing your competitors, you will gain valuable insights into the market, identify gaps and opportunities, and develop a strategy to set your custom merch business apart. This will help you establish a strong foothold within your niche and build a loyal customer base.

Collaborations and partnerships

Collaborating with other businesses, clubs, organizations, or influencers within your niche can offer numerous benefits for your custom merch business. Here are some of the advantages of pursuing strategic partnerships and collaborations:

  1. Expanded reach: Partnering with others in your niche allows you to tap into their existing customer base or audience, thus expanding your reach. This can lead to increased visibility for your brand and a higher likelihood of attracting new customers interested in your custom merchandise.

  2. Increased brand awareness: Collaborations can help increase brand awareness, especially when working with well-known organizations, clubs, or influencers. Their endorsement or promotion of your custom merch can elevate your brand's credibility and recognition in the eyes of their audience.

  3. Access to new target audiences: Collaborating with different entities within your niche can provide you access to diverse target audiences. This can help you identify untapped markets or customer segments that may be interested in your custom merchandise, offering opportunities for business growth and expansion.

  4. Shared resources and expertise: Working with others allows you to leverage their resources and expertise, which can enhance the quality and variety of your custom merch offerings. For example, you might collaborate with a talented graphic designer or a printing specialist, resulting in unique and high-quality merchandise that appeals to a broader audience.

  5. Cross-promotion opportunities: Collaborations often lead to mutually beneficial promotional opportunities, such as co-branding, joint marketing campaigns, or bundled product offerings. These initiatives can drive customer engagement and generate interest in your custom merch from new and existing customers alike.

  6. Networking and relationship-building: Establishing partnerships and collaborations can help you build valuable connections within your niche, which can lead to further opportunities for growth and success. These relationships can also serve as a support system, offering advice, mentorship, or assistance when facing challenges in your custom merch business.

  7. Enhancing reputation and credibility: Associating with reputable organizations, clubs, or influencers can help enhance your brand's reputation and credibility. This can make your custom merch business more appealing to potential customers who value trustworthiness and quality.

By pursuing strategic collaborations, you can leverage the strengths and resources of others within your niche to expand your reach, increase brand awareness, and access new target audiences. These partnerships can significantly contribute to the growth and success of your custom merch business.

Adaptability and niche expansion

Adaptability and openness to change are particularly crucial for student business owners. Balancing the demands of academic life with the responsibilities of running a custom merch business presents unique challenges and opportunities for growth. Here are some reasons why adaptability is essential for student business owners:

  1. Changing campus trends: College campuses are known for their rapidly shifting trends and preferences, with new clubs, organizations, and events constantly emerging. To remain relevant and competitive, student business owners must be able to adapt their custom merch offerings to cater to the evolving interests of their peers.

  2. Seasonal opportunities: The academic calendar presents various opportunities for growth and diversification, such as homecoming, sports events, or club fairs. By being open to expanding their niche during these peak times, student business owners can capitalize on these events and maximize their revenue potential.

  3. Time constraints: Balancing academic demands with running a business can be challenging for student entrepreneurs. Being adaptable allows them to pivot their focus and resources as needed, ensuring that both their studies and business receive the necessary attention.

  4. Networking and collaboration: College campuses are fertile ground for networking and collaboration, with numerous clubs, organizations, and influencers present. By being open to partnering with these groups, student business owners can expand their reach, increase brand awareness, and access new target audiences.

  5. Personal and professional growth: College is a time of immense personal and professional growth, and it's not uncommon for students' interests and passions to evolve during their time on campus. By being adaptable and open to exploring new niches, student business owners can align their custom merch business with their evolving passions, ensuring long-term motivation and commitment.

In summary, adaptability is essential for student business owners looking to succeed in the dynamic environment of a college campus. By continuously evaluating the market, embracing change, and capitalizing on new opportunities, student entrepreneurs can stay ahead of the curve and create a thriving custom merch business that complements their academic pursuits.

Case Study: Underground Printing

Underground Printing (UGP) is a custom apparel and promotional products company founded in 2001 by University of Michigan students Rishi Narayan and Ryan Gregg. The company started as a small-scale operation in a college dorm room and has since grown into a national powerhouse with multiple locations and a strong online presence. This case study will explore the success of Underground Printing and the factors that contributed to its growth, offering valuable insights for aspiring student entrepreneurs.

The Beginning

Rishi Narayan and Ryan Gregg, both University of Michigan students, identified a need for affordable, high-quality custom apparel for student organizations, clubs, and sports teams on campus. They decided to start their own business to address this need and named it Underground Printing.

Operating initially out of a dorm room, the duo started by printing custom t-shirts for friends and acquaintances. Word-of-mouth marketing helped the business grow, and soon, the demand for their products exceeded their production capacity. Recognizing the potential for expansion, Narayan and Gregg decided to invest in a larger workspace and more advanced printing equipment.

Growth and Expansion

As the business continued to grow, Narayan and Gregg focused on developing their brand and expanding their product offerings. They began offering a wider range of custom apparel, including hoodies, hats, and promotional products. This diversification allowed them to serve a broader customer base and increase their revenue.

Underground Printing expanded its reach beyond the University of Michigan campus by opening new locations in other college towns and eventually nationwide. The company also built a strong online presence, making it easy for customers to order custom products from anywhere.

Keys to Success

  1. Targeted niche: UGP focused on serving the needs of college students, clubs, and organizations, which helped them stand out in the custom apparel market.

  2. Quality products: The founders were committed to providing high-quality products that met their customers' expectations.

  3. Excellent customer service: UGP prioritized customer satisfaction, ensuring that clients received personal attention and support throughout the ordering process.

  4. Adaptability: As the business grew, UGP was willing to diversify its product offerings and expand to new locations to meet customer demand.

  5. Strong online presence: UGP developed a user-friendly website that made it easy for customers to place orders, browse designs, and learn more about the company's services.

Underground Printing's success story demonstrates the potential for growth and success when student entrepreneurs identify a niche market, offer quality products, and prioritize customer satisfaction. By focusing on the needs of college students and organizations, UGP was able to carve out a unique space in the custom apparel industry, turning a small dorm room operation into a nationwide business. Aspiring student entrepreneurs can learn from the strategies and principles that fueled UGP's growth as they work to build their own successful custom merch businesses.

Your personal connections and firsthand experience as a student can significantly contribute to the success of your custom merch business. By leveraging your insider perspective, networking with campus organizations, and staying attuned to the ever-evolving needs of your peers, you can carve out a distinct niche for your business and foster lasting brand loyalty.

Thanks for reading Part 3 of our guide on how to launch a campus merch business as a student. If you enjoyed reading this, please consider sharing it with others you think might be interested. If you have any suggestions for how to make the guide more effective, I greatly welcome and appreciate feedback

Next up

Designing Your Custom Merch (The Student's Guide to Starting a Profitable Custom Merch Business) - Part 4This guide covers essential topics such as creating high-quality designs, tips for your target audience, outsourcing design work, legal considerations and licensing, design software and cutting-edge tools for managing the design process.

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