4 Steps To Recognizing Profitable Niches

By Chris Custer

All of the successful internet marketers say it. You've got to find a niche to sell to. Find a group of people with needs and meet those needs. If you try to sell to everyone, you'll sell to no one. You've heard it all before. But where do you start? Where can you find a niche market and how can you tell if it's worth marketing to? These are legitimate questions and thanks to some online detective work and a little educated guessing, we can hone in on the niche markets that have real potential. Here are the four key steps you need to take in evaluating a niche market:

1. Supply - are enough people looking for the topic? One of the best ways to find a group of people looking for the same thing is to use Overture.com's Keyword Suggestion Tool. Just type in a general term, like cooking or football, and Overture will give you up to 100 related search terms and how often each one was searched for the previous month on their website. You're looking for a significant number of searches in a given month. There's no hard and fast rule here, but 5000 or more is good base. Anything lower and you risk having too narrow a market.

2. Competition - how popular is your market? Alright, contrary to your natural human instincts, competition is a good sign. The more the merrier. Contrary to popular belief, competition is a sure sign you're in the neighborhood where the money is. If you think about it, it makes sense. No one wants to call on people who don't or can't spend money. It's like that in the off-line world - and the online one. The trick (if you want to call it that) is adding your own flavor, twist, or personality to what you're selling. Personally, I really don't believe a market can become over-saturated. Simply because new people are coming online everyday and people tend to buy multiple products on the same topic. It's just human nature. So don't be scared off by competition. As the old saying goes - follow the money.

3. Buyers - are the searchers buyers? One of the most discouraging things that can happen to an work at home (or ANY business for that matter) is to put a lot of work and effort into creating and marketing a product to people who aren't buyers. You can get all worked up over high demand and low supply, only to find out in the end that your market is full of a bunch of freebie-seekers. One of the best ways to find out if people in your chosen market are likely to spend money on your chosen topic is to find out if other people (i.e. your competition) are already selling to them. To do this, go back over to Overture.com and enter your search term. Near the top and to the right of the results page is a "View Max Bids" link. Click it and enter the code they give you. You can then see the maximum bid of each advertiser listed. A good rule of thumb is if the top 2-3 are paying $.20 to $.25 a click or more, these sites are probably making money selling to this market. If there are no bids or very low bids, look for litte red flags.

4. Products - what can you sell to your new-found market? So you've got a potential market of prospects that you now need to sell to. So what do you sell them? Well, it's either going to be your product or someone else's product (rocket science, right?). Either way, you've got to match an appropriate product to what the people are searching for. Of course you can create your own, such as an ebook or multimedia product, but the first step might be to seek out some affiliate programs. Go to Commission Junction (cj.com) sign up for a free account and search for affiliate programs based on your target keywords. Or, go to Google and type in "your keyword" + "affiliate program."

Zeroing in on established affiliate programs accomplishes a couple of things for you. One, you can jump right in and start promoting a product without laboring to create you own. Second, it's a pretty good sign that others are making money with this market (remember, competition is a good thing). And third, this may or may not be a market you want to work in long term - promoting an affiliate program is a good way to test how profitable and how fun this market is.

Alright, there you have it. Following these four steps won't guarantee you'll profit in your chosen market. But, they will increase the likelihood that you won't waste a lot of time and money on a dead idea.