im currently in the process of opening an online cake business. I am trying to come up with a niche to differentiate myself in the market. Any ideas?

Not enough info here. No pictures so we don't know your skills. Don't know if you're into cakes, cookies, candy, etc. Don't know if you're shipping inter-state or intra-state.

I am selling cakes, cupcakes & cookies to the local area (boca raton/ft. Lauderdale, Florida). I create tiered wedding cakes & custom cakes (2D & 3D). Examples of niches I have already thought of include preservative-free, vegan & lactose-free products. I hope that answered your question

I believe if you review the Fl. Cottage Food Act it states you cannot sell over the internet. You might want to check this before you start to see if what you are wanting to do falls inside or outside of this ruling. Also selling wholesale is not allowed either, just to let you know ahead of time.

Thanks for the info I plan to get all of the licenses required and work from a rented industrial kitchen

That course of action puts a whole different light on your original statement. Good luck on your endeavor and be sure to get your Food Managers Certificate.

Having a completely nut-free/peanut-free shop is a great niche and is pretty easy to do. Going gluten-free is an even bigger market but it's more difficult.

Your niche doesn't necessarily have to be product-oriented, you can instead provide a unique service or tap an unserved market. The competitive analysis portion of your business plan will help in this respect.

Jason: I love your "nut-free" idea. I'm definitely going to consider that. Also, good point about the niche not being product-oriented. You've given me a lot to think about!

Jason, is gluten-free more difficult than nut-free from purely from a baking standpoint or from a cross-contamination standpoint?

Just curious.

A niche can also be a demographic segment such as a particular income, location, etc.

Niche is basically, "find a hole and fill it", which is why all successful businesses are, in essence, niche businesses.

Be careful not to be too many things. It clouds the message and is difficult for the public to remember. My current business has one theme even though the offerings are vast. But the message and the niche market I want are clear. My retail store will have a much narrower product line, but the niche, the hole I fill, will be the same.

Just out of curiousity...how do you do gluten or nut free from a rented commercial kitchen? Wouldn't there be possibility from cross examination from the counters, equipment and even in the air? You would have no control over what else was baked in that kitchen since it is not your own.
Much like when food is labeled that a product was made in a factory where nuts may have been processed. Just think about it...before you get too far in based on a particular niche.