Checklist: Evaluating a Potential Niche Market
This is a seven-item checklist to help you make sure that any niche market you go into will be profitable. Anytime you’re looking at a new niche, just pull out this checklist to help make sure your new niche has the makings of a winner.
Item #1: Enough Traffic?
Your niche needs to have enough traffic to hit your minimum income goal. The minimum goal is for you to decide. For beginning marketers it can be as small as $100 a month, while more experienced marketers may aim for thousands.
As a rough gauge, assume you’ll be able to get 15% of your main keyword’s traffic. At a 1% conversion rate, would it be enough traffic to get you to your minimum goal?
Item #2: At Least Three Low-Competition Search Terms
To get started, you want to target low-competition search terms. These are terms you believe you can rank in the top five for within no more than 3 months.
The ideal niche market should have at least three of these terms, so you can start making money right out the gate.
Item #3: People Are Spending Money
Make sure that other people in the market are actually spending money. There are many niches that may appear to have low competition, but aren’t being marketed to simply because people don’t spend money in that market.
Item #4: Has Repeat Product Potential
You will almost always make more money in a market where you can sell repeatedly, as opposed to a market where you can sell just one item.
In other words, look for niche markets where the problem won’t be solved with just one sale. Subscription models or consumable goods are great examples.
Item #5: Has at Least One Competitor
You want to go into markets where at least one person is making money. If there are no competitors, it’s possible that you’ve found a truly uncharted market, but more likely than not others have already tried it and failed.
Ideally, your market should have just a small number of marketers who are making decent money. There should be a couple people at the table, but the table shouldn’t be crowded.
Item #6: Has a Passionate or Desperate User Base
Is the user base passionate about the issue? Or, in the case of a problem (i.e. acne), are they desperate about finding a solution?
The more passionate and/or desperate the end users, the more willing they are to part with their cash.
Item #7: Do You Want to Do It?
Sometimes you’ll find a market that looks good on the surface, but you just know it will be dull work. In that case, you need to ask yourself: Do I want to do it?
Remember that creating a website isn’t a sprint – it’s a marathon. Getting good rankings can take as long as six months, sometimes even more in competitive arenas. Is this an industry you want to be in for a few months?
If you answered “Yes!” to all seven factors, then chances are you have a winner on your hands. If any of these items are missing, you might want to do a bit more research before jumping in.