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3 days ago I’ve published an article about the niche blogging stater guide and receive a few emails ask me that how to choose a profitable niche. So, I know I need to make another article on this topic too.
Choosing a profitable niche is much like choosing a profitable career. You don’t know which ones will profit you most until you’ve taken it. However, there are some indicators telling you which careers are profitable and which are not.
Generally, these indicators have something to do with supply and demand. It also follows trends and takes its cues from historical data. Conventional wisdom also lends itself into identifying which careers will be most profitable in 10 or 20 years.
By this comparison, we can say the same thing of niche marketing. Niche marketing also follows the law of supply and demand. It also follows trends and takes its cues from historical data. Like choosing careers, choosing niches also needs conventional wisdom in order to choose wisely. The following is an in-depth discussion on how to choose a profitable niche based on the current capabilities and talents of the entrepreneur.
Before we can begin any effective discussion on how to choose a profitable niche, we first need to define what niche marketing is. Simply defined, niche marketing is the act of a business of gearing its product and services toward a tinier yet more focused and more targetable segment of the market.
For example: A car company may mass produce cars for the general population, but it will try to identify niches, or certain segments in the market, wherein its sales are strongest.
So, where to find an idea for your niche website? I usually visit EzineArticles to find out the general niche, also the sub niches for an initial process:
Then look at the current trend/hot searched keyword with Delicious tags, Google Insights or Yahoo top overall searches:
And now, when you have some ideas in mind and want to build a small targeted niche website, you could do a keyword research to find out the best one (high search traffic volume, low competitors, keyword-match domain available…). These type of websites are easy to rank on SERP and can make you a passive profit income for a long time.
Knowing your strengths and weaknesses
The primary key in identifying a niche profitable for your business (if you already have one) or a niche that will be profitable for you (if you’re just thinking of starting a business), is knowing your strength and weaknesses. This is very important as choosing a niche in which you have no strength at all and a lot of weaknesses is just an invitation for failure, even if said niche is wide open and have very few or even no competitors.
One, you must be very good in said niche. If you’re going into any specialized business, you must possess proficiency in it. You must produce excellence. Otherwise, other businesses will just come in, imitate your business, and push you out of the market.
For example, a retailer that suddenly discovers that there’s an increase in demand for eco-friendly dresses may focus on eco-fashion and produce dresses that satisfy the market for these type of dresses. However, competition will soon notice this demand, and they too will try to join in on this action. If the original discoverer of the niche produces low-quality eco-dresses while the imitator or the trend follower produces high-quality ones, it won’t matter if the first business was the first to enter the niche. All that matters is that it was beaten at its own game.
As a blogger, before start a new project, I recommend you to write down all of your strengths and weaknesses on a note paper, and then try to answer all of these questions:
- What will you do to maintain your niche? A step by step to-do-list would be perfect in this case.
- Can you go along with it for a long time?
- How about your current and future competitors?
- How about your budget?…
I saw many, many people failed in Internet marketing just because they just tried following other people’s works, they don’t know what are they doing, don’t have any plan or targeted object ahead…
Being aware of the “black hole” in the market
As consumers, we always have needs and requirements that businesses don’t always meet.
For example, before Groupon existed, there was literally no single company doing business in offering group discount coupons. But there was an untapped market of consumers always on the lookout for discount coupons. It turned out that this untapped segment of the market was a very, very large segment of the population. Now, Groupon is valued to be more than $6 billion dollars. By seeing the black hole, the unmet needs of the market, Groupon CEO Andrew Mason is now one of the richest men in America.
Niche marketing only becomes successful if the idea is innovation-driven, not profit driven.
In this point, might be you want to read a story about a very innovative guy with his product called as “The Jump Manual”: How to Jump Higher… and Earn $75,000 a Month in the Process.
Sometimes, businesses try to prime the market for certain niches and end up falling flat because their primary motives were profit-driven. If you try to pre-empt the market and open up a niche wherein the public isn’t interested or isn’t yet ready to patronize, you’ll just fail.
Consumers have their own idea of what they want and what they need. It is better for you to focus on innovation than on creating a false need. Genuine interest in providing consumer needs will fuel more success than a thousand attempts at creating false demand for a niche consumers do not want.
Choosing between a broad niche or a small niche
This has always been a question among niche marketers. Which is a more profitable niche, a broader niche or a tinier niche? The answer would be: it depends.
It depends on the type of market you have and on the income levels of your consumer. Obviously, a small niche would need to have richer consumers if it is to maintain profitability. This is not much of a problem for a broader niche, which can afford to have a market of middle-income to lower-income earning consumers as opposed to a small niche, which needs higher-income earners to consume their products or services in order to produce more profits.
There’s no winning strategy for everyone here, the idea behind niche marketing is that you target a group of people who want to purchase a specific product or service, a small niche will give you advantages of easy ranking in Search engine, low competitors but low search traffic while the larger niche will make you have more competition but also more searches, more opportunities.
Knowing how to choose a profitable niche is a combination of self-awareness, imagination, creativity, and critical analysis.
You need self-awareness in order to know your strengths and weaknesses. You need imagination and critical analysis if you’re to identify the “black holes” in the market. And of course, you need innovation in order to develop something better than the competition.
Innovation spurs on new discoveries, and ultimately opens up new markets. Profitable niche markets arise out of innovation.