Having a market in mind before starting to write your children's book could have a huge effect on your sales once you publish. By identifying a niche market early on you are able to target your book specifically to that market. This could allow you to create your own market where you’re not competing with thousands of other books. It could also create a more personalised end product as it is written specifically for them.
Here is some niche markets I came up with just to get you started:
Children who wear glasses
Children who follow a specific religion
Children who have eating allergies
Children who travel on a plane lots
Children who are home schooled
Children who spend a lot of time in hospital
The list could go on forever. I think the key is to be specific rather than general. By narrowing down you target market you are also narrowing down the competition. This also opens up a whole new set of avenues to sell your books. For example if you are writing about a child going to the dentist you could approach all the dental clinics in your city or even country and see if they would sell your book at the counter. Or if you are writing about home schooling you could approach your home schooling national networks and see if they will help you market the book. A book about catching a plan could be sold in airports throughout the world.
The opportunities are endless and you might find you sell more books in these alternative avenues than a bookstore where you are competing with thousands of other titles. My advice would be to come up with a few ideas and search them on Google to see if you can identify any marketing avenues before you write the book. If you can’t find any networks or sites you might be to specific and if you find loads of children's books already written on that subject you might be too broad.
Goodluck and feel free to comment on anything I have missed on this subject.