How to Select a Profitable Niche
When it comes to making money online, the first obstacle to overcome is to select a profitable niche. Too often, new entrepreneurs don’t realize how important that choosing the right niche is. But, the truth is, if you select the wrong niche, you are doomed. Selecting the wrong niche will absolutely destroy your chances of achieving success online. So, what are the wrong niches?
Don’t Select the Wrong Niche
There are several types of pitfalls that can ruin your venture before you even begin. It’s important that you know what niches are wrong, so that you can recognize them when doing your niche market research and select a profitable niche that will enable your success.
The primary reason that niches simply aren’t profitable is because there is little or no money in the niche. There are a lot of hobbies out there that people love and partake in regularly. However, if these people aren’t spending money, then it’s a niche you must avoid at all costs if you want to make serious money online. I’m sure you can think of an activity that you enjoy, but you don’t spend much – or any – money on.
The competition is too strong. The fact that there is competition within the niche is more of a good sign than a bad sign. If businesses are actively advertising and selling within a niche, then there are people spending money within that niche. However, if there are dominant businesses that have a stronghold on the market, then it is a good sign that you should avoid the niche. However, generally the competition is strong in the market overall, if you dig deeper you may be able to find a great sub-niche to expose for profits.
A rapidly changing niche that you don’t know much about is a bad niche to dive into. Notice, there are two parts to this equation: a rapidly changing niche that you don’t know a lot about. This is a recipe for disaster. While it’s widely said that you should be an ‘expert’ within your niche, there are some niches that you can essentially rinse and repeat what is already in the market; whereas, other niches are constantly changing which causes you to constantly spin your wheels to keep up. An example of a slow-moving market would be fitness. There are rarely ground breaking exercises being invented these days and the way to build muscle isn’t changing anytime soon. An example of a fast paced market would be actively researched medical conditions. Markets such as these will have constant information that you’ll have to keep up with.
Another niche to avoid is any niche that isn’t in an evergreen market. Evergreen markets have withstood the test of time. If you select an evergreen niche, then you’ll have definitely selected a profitable niche. Evergreen markets include things like weight loss, fitness, dating, sex, making money, or even dog training. These markets will always be full of people that are spending money. And when you drill down into them find niches that are extremely profitable – and will be forever. On the other hand, if you build your business around a flash-in-the-pan, or temporary craze, then you will eventually lose everything you worked hard to build.
As a rule of thumb, we also recommend that you avoid niches and markets that can adversely affect the lives of others. We often see people promoting “cures” for medical conditions; however, these people are not licensed professionals. There are several moral and legal issues with promoting offers in niches that you are not qualified to give advice on. Typically, these niches are within the medical field.
Markets Vs Niches
I probably should have mentioned this a little earlier, but it’s not too late. If you were reading carefully above, you may have noticed that I substituted “markets” for “niches” a few times. But realistically, the terms “markets” and “niches” are not interchangeable – they are very different.
Markets cover a wide variety of niches and sub-niches. They are the overall category for which the niches fall under. Primary examples of markets are health, finance, and dating.
On the other hand, when you niche down, you’re drilling into these markets and finding a specific target market. For example, a niche within the dating market would be “dating for widowed women.”
The Three Mainstay Markets
Unless you are brand new to making money online and/or businesses, then I’m sure you heard of the four golden markets: health, wealth and romance. These are the three dominate markets when it comes to making money. They hit everything on the checklist: they’re evergreen, they are extremely profitable, and they offer endless opportunities to grow.
Five Considerations When You’re Researching Niches
Now, that’s not to say that these are the only markets that you should consider. Other markets, such as self-help, embarrassing problems such as bad breathe, and pet care can be extremely profitable as well. However, if you’re brand new to market research, then the health, wealth and romance markets are great niches to start diving into.
When you select a profitable niche, you will set yourself up for success . If you choose a niche that’s too hard to penetrate and capture market share, then you’ll fail. Likewise, if people aren’t spending money within your niche, then you’re set up to fail. There a few keys to consider when you’re selecting a profitable niche.
First, is the niche evergreen? If you’re going to build a sustainable business, it’s essential that you do it in a niche that won’t be vanishing into thin air. Fads come and go and if your business is built on a fad, it will eventually go. However, evergreen niches are here to stay.
Second, how can you actually make money from the niche? The easiest way to make money is to identify a problem within the niche and develop the solution to that problem. However, if there is a free solution that’s widely available or that has established itself as the go-to solution, you could find yourself in a niche that isn’t profitable. You should not build a business that is “fighting to reach the bottom”. In other words, do not build a business in a niche in which there are slim profit margins.
Third, make sure the niche is suitable for you. For example, teaching people to speak Chinese online is very profitable. However, I cannot speak Chinese so this extremely profitable niche is very obviously not for me unless I’m willing to pay someone to develop the training material for me.
Fourth, develop a unique selling proposition. Why should you customers buy from you and not someone else? Does your product have more information? Is your product in a better format? Do you have exclusive content from other experts? Does your product come with bonuses?
Fifth, identify your target market and find out where they hang out online. You can build the greatest product in the world, but if nobody ever hears about it then you’ll never make a dime. It’s extremely important to identify who your target market is and to find out where they hang out online. Do they use forums or message boards? What blogs do they read? Having a plan in place to put your product in front of your potential customers will go a long way to your success. In the product development stages, you should consider your target market input and feedback and tailor the product to their needs.
Should You Follow Your Passion or the Money?
If you read certain Internet marketing forums, you’ve likely seen this argument a hundred times. It’s a never-ending argument that, in my opinion, doesn’t have a correct answer. Some people argue that if you’re passionate about the niche your business is in, then you’re more likely to stick with it and develop great content and a great business. I don’t think anyone can refute that point. However, you need to make sure that there is enough interest in your niche, and product(s), to build a viable online business.
On the other hand, you need to decide whether you are building a legitimate business or if you just have a hobby on your hands. If you’re building a business, then you need to take into consideration that profitability will go a long way in determining your ability to succeed. You need thousands, tens of thousands, or even millions, of people to be interested in your product(s) or services to build a business.
As I said, I don’t think there is a correct answer on which way to go. However, I believe there is a sweet spot for everyone. The sweet spot is where we find a profitable, evergreen market or niche that happens to coincide with our genuine interest. This is the best of both worlds and one that all of us can find if we research our options to select a profitable niche.