7 Exclusive determinants to select a profitable niche market
There are several factors that should be considered as you are researching for a profitable niche market. You have to understand the factors that make a niche profitable for you to research and find out whether they are actually profitable or just a perception. The following factors should be analyzed for effective results.
- Does the niche exist?
Marketers and publishers often refer to the term new profitable niche market. The reality is that these niches are not new because they exist and that is the reason why you will be researching on them for the first time. The reason why you need to ensure that these niches already exist is that you want to determine whether people are actually looking for information related to that particular niche market.
When people look for content on a particular topic, it means that they are interested in the topic and that they are looking for some specific answers regarding the subject matter. Therefore, we can say that a niche exists where there is a problem that requires being solved. The kind of problem has to be one that affects many people which take us to the second factor which is traffic.
- Does the niche have enough traffic?
A niche market cannot be considered profitable if it does not have substantial traffic flowing in month after month. Traffic plays a significant role determining a profitable niche market because less than thirty percent of your traffic is going to convert to sales. For instance, if your site is receiving 10,000 visitors each month, then less than 3000 visitors are going to convert.
Let us say that you are selling a digital product that costs $10. It means that you are likely to convert 3000 potential visitors which will earn you $30000 in passive income. Therefore, the higher the number of visitors you have the higher your chances of making a profit from that niche market.
- Are there products to be sold on that niche market?
From our first two points, we have determined that for a niche to be profitable there has to be a huge number of people that are searching for specific solutions to their problems. Our third point is also linked to the first two where there has to be some product or services offered as a solution to the specific problems in any particular niche market.
If the niche exists and you do not have traffic, then the niche is not profitable. If the same niche exists and there is substantial traffic coming in regularly, but there are no products to be sold then the niche market is also not profitable. Products have to be sold for you to make a meaningful return. However, there are several ways to monetize your site although commissions earned from products offer you the best income stream that will always be profitable.
- Expected commissions
The products that you are going to promote in you niche sites or money sites play a significant role in determining whether the niche is profitable. The essence of these niche sites is to make money. Analysis of affiliate products to promote is a big determinant. There are affiliate products that have huge commissions on sale sometimes up to 100% of the sale. You may have a niche that attracts tons of traffic, but you are selling products with the least commissions.
This implies that you will not make much money because you will need as many visitors as possible. On the other hand, you may have huge or less traffic, but the products you are selling have a high commission margin that enables you to make profits even with a sale of two or three products. For a product with a commission of let’s say a $1000 you only need 30 people to make $30000 while in the example we gave above on digital product requires 3000 people to make the same amount.
- Are people advertising on the niche you are interested in?
An advertisement is a good strategy to determine whether a niche is profitable. Many people spend money on the things that they like. Advertisers will not pay high prices to promote products that are not in demand. The fact that marketers spend a lot of money in advertising certain products implies that there are many people looking for the products and the niche is bound to be profitable. This is a good strategy to help you select a profitable niche that you can never go wrong.
It is important to determine whether products in a particular niche are seasonal or are in demand throughout the year. You need to promote products that are in demand for the longest period so that you can maximize the returns.
- Determine your competition
You are likely to have a competitor in you preferred niche market. It is wise for you to know each and every aspect of their business so that you are in a better position to make an informed decision about improving your performance in that niche.