Let's say you have a few niche ideas, you have found your niche area, and you are planning to start your own affiliate marketing business with it. You want people to view your adverts for Pay Per Impression money, you want them to click your adverts for Pay Per Click money, and you want them to buy from the adverts on your website for Pay Per Action money. Yet, before you invest months and years into your niche area, you should probably find out if your niche area is profitable.
Finding a niche and making sure it is profitable is a process that can be painstaking and time-consuming – if you don't know what you are doing. That's why we wrote this article – to guide you through the 10 steps you should go to find out if your niche ideas are profitable. Let's go.
How to Know if Your Niche Is Profitable
When you are thinking about starting an affiliate marketing business, one of the most important factors to consider is your niche. The niche in which you build your business will be vital in deciding the success or failure of your business. A niche is a segment of the market with specific services or products to solve a particular problem in the life of the regarding audience. A niche that is large enough can be further categorized into subniches of varying capacities. Almost half of all affiliate marketing websites fail because they do not find a proper niche. The niche you choose for your business should be profitable if it is to be sustainable in the long run.
What you should learn is how to find out if a niche is profitable. It will save you half the hassle that other websites or businesses go through before their eventual failure. On the other hand, taking too much time to decide a niche will put too much pressure on you. You might end up becoming a victim of paralysis by analysis.
You certainly want to do enough research if you are to come up with ideas for profitable niches. It will allow you to enter the market sooner and with a much bigger effect than you would otherwise have. So let's start with step one.
Step 1: Identify Your Passion
The first step in finding a profitable niche is the simplest and most important of them all. You need to take the time and find out what your passions and interests are.
If you are starting a website or online business, then you have probably thought about this. However, if you have not, you should take the time to make a list of at least ten things you are interested in or passionate about and can turn into a business.
Running a business is one of the most challenging endeavors you can undertake and it will certainly get tough. Only a genuine interest passion or interest in what you do will take you through the tough times. It is especially so if it is your first business.
You should look to your hobbies and other ways that you prefer to spend your time. You can subconsciously develop tremendous skill or knowledge in a discipline by simply doing it over and over again.
The thing that you are most passionate about might not be the most profitable hence the need to come up with a list. The key is to find a balance between a subject in which you can immerse yourself but can still be monetized.
Step 2: Ascertain Niche Market Value
Once you have a list of possible profitable niches, the next step is to find out what the market value of these niches is. It is crucial that you have a vivid picture of what the worth of the niche in which you want to enter is. Finding out the market value will apprise you of how much you can earn as part of the niche. If the market value is high, then chances are that you can carve out a great niche for yourself.
There are a great many lists showcasing the value of various market niches online. They will help you have a clear picture of the net worth of various market niches. If you cannot find the market value of a particular niche, it could be that it is too small to calculate or there was not enough data. Either way, you should refrain from venturing into the niche because you cannot know if the niche will be profitable.
Step 3: Check Past and Current Patterns
You should find out as much as you can about a particular niche before diving into it. Analyzing past and current trends about the market will tell you a lot about it which you should certainly know. The good news is that the process of checking past and current trends of various niche markets has never been easier. You simply need to go to Google Trends and search for your niche.
Google has information on all niches you can find doing business online. They are the perfect source of information and it is all readily available for free.
You want to find a niche that has been relatively stable in the past and continues to be so currently. A niche with seasonal characteristics means that it is only a passing fad and will not be very profitable. A good rule of thumb is to check trends and patterns for the past ten years. On the other hand, if you can go beyond that, you should.
Step 4: Identify Problems to Solve
If you want to have a profitable niche, then it must solve a problem for the people who will eventually use your product or service. Your success or failure as a business will largely depend on how well you solve the problems in the niche market. You should think of your capacity to solve various problems present in the market. There is a market for everything including the most absurd of solutions.
You can find out the problems to be solved by having conversations with people in your target market. Formulate questions that will help you find out if the niche is profitable. You should also scrutinize various forums to find out which problems many people are complaining about and if you can solve them. Sites such as Quora where people are having open discussions about various topics are a great resource in this regard.
Another way to identify problems to solve is to conduct a search of the most used keywords on Google. The results will offer you a lot of insight on what most people are looking for online and whether offering them solutions would be a profitable idea.
You may join a niche even though it has many players if you have a unique or revolutionary way of solving a problem.
Step 5: Find Products or Services to Sell
If you think you can solve the problem, then you probably have a niche market you can enter. You will then need to provide products or services that you will sell and help solve the problem. The best and most profitable niches are those that have many physical and digital products to sell. A small niche can be highly profitable if there are many products to sell.
A great example is internet marketing which is a niche with hundreds or thousands of products to sell. All you want is proof that people buy products and services in the niche and in sufficiently high volume.
The best way to find if there are products to be sold in the niche is to check various affiliate networks. eBay, Amazon and Clickbank are examples of affiliate programs that you can check to find out products being sold in niches. Dropshipping sites are also fantastic sources of product information.
These sites will also have subniches in your niche further classifying parts of the market that you might consider. For example, the sports & fitness niche has subniches like running, swimming, yoga and others. They will rank the best-selling products as well which should help you find which products you will sell.
Step 6: Check Reviews
On platforms like Amazon and eBay, products will always have reviews by various users of the product. They will be a valuable source of information and an integral step in evaluating how profitable your niche idea is. Reviews will help you answer one question about the niche which is ‘Is the audience willing to pay for your products?' You need to find products to whom the answer is yes.
Products with many positive reviews best show the willingness of the audience to pay for the products. It is not only about the fraction of the positive reviews but the number of reviews themselves. Only a great product will have thousands of customers leaving positive reviews on Amazon or eBay.
Step 7: Evaluate the Competition
If you go into business you will always have competition. Researching the competition is a crucial step in determining whether a niche is profitable or not. A niche with a sufficient amount of competition is evidence that the topic is quite profitable. Therefore, a thorough scrutiny of competitive sites will prove to be very insightful.
By researching the competition, you will find out if you will be able to carve out any space in the niche. It will also show you how to differentiate yourself from the competition and make your business unique. There are signs that may show that the competition in the niche is lackluster and is ripe for a quality player. These signs may include the lack of quality content, the lack of transparency and little paid or organic advertising.
What may separate you from the competition may be something quite simple. As long as it works well it may mean being profitable even in a crowded niche. Look for opportunities that the competition might have missed while doing your research. Find ways to offer customers value in a manner that the competition simply cannot.
Knowing more about your competition is something you will have to keep doing as long as you are in business and not just when starting out in a niche market.
Step 8: Check Online Advertisements
One of the best ways to evaluate whether a niche market is profitable is to find out whether businesses are willing to invest in online advertising. If they are, then the niche is probably highly profitable.
There are two ways to generate traffic online: organic traffic and paid traffic. Organic traffic is the stream of visitors directed to your site on search engines because of search engine rankings based on how well you offer solutions to problems. Paid traffic is generated by paying for advertising on various avenues online. Paid traffic can make a significant impact on the amount of people visiting your site but most sites rely on organic traffic.
Sites with paid traffic will usually appear higher on search engine results. They will also be clearly labelled and recognizable on search engine results. A vital metric to use as far as paying for online advertisements is the cost per click. The amount that competitors are willing to pay per click will apprise you to the profitability of a site. If the cost per click is high it may mean that the niche market has incredibly high traffic or large profit margins. Either way, it is a sign of a highly profitable niche that you should consider.
Step 9: Strong Association or Affinity
When evaluating possible profitable niches, one crucial metric to observe is the affinity the audience has towards the solutions offered in the niche. There may be many solutions but customers may not be using them. You want a niche with a strong association between the target audience as well. The stronger the association, the higher the chance for profitability in the niche.
You can use Facebook's Audience Insights to judge the association or affinity of a niche. It will mean better results in terms of income for your business.
Step 10: Test Your Idea
If you have followed the steps above to the letter, then you should have all the information you need to choose a niche. You should know that the first niche you choose might not always end up being the one you pursue. You should test your idea by setting up a page to test presales for the products or services your site will be selling. You can then drive traffic to your site and see how the products do.
By testing your idea, you will find out whether the niche is truly profitable or you need to change it. It might also allude to the mistakes you are making that are reducing your profitability.
In conclusion, after you test your idea, you should be ready to fully unveil your site. The work will have only begun and there is a long way to go. Follow the steps above and you should have a profitable niche site in no time.