Why Do Market Research?
The basics (bread and butter) of your online business will either be promoting other people’s products in return for a commission, or selling your own products.
Before you put time and effort into earning an income online, you need to be sure to choose a profitable niche.
If you choose to work in a niche that is not profitable, then no matter how much effort you put into your business, you won’t get the results you need to replace your income (and reach that six figure sum!).
Market research is the first hurdle that many fall at. I have chosen the wrong niche myself more than once, but through trial and error and ongoing learning I know a lot more that will stand me in good stead from now on. “It’s in my back pocket” as they say.
So market research is extremely important and must be the very first stage in the creation of your online business. Before you start to take any other action, do some good market research first.
And when I say “good market research”, this needn’t be a treacly task that takes you a long time. Once you master the basics of what to do and look for (I now have my process nailed!) this can be done in a matter of an hour or two. Then you will have a solid foundation from which you can go on to make a lot of money online.
Guiding Principles For Chosing the Right Niche
Here are some guiding principles to help you choose the right niche:-
- You want to find a niche where there is easy money to make in an already proven market.
- Choose a topic that people are “irrationally passionate” about – these are the markets in which people are willing to easily part with their money. If people really love what they do or are very passionate about a subject they are also highly likely to buy more than one product so you have the opportunity to make multiple sales.
- I have also heard it said that you should choose a niche in which there are people who are desperate for a solution. Anything that keeps people up at night, they will be willing to pay money to fix, and if you can give them an answer to their problem your conversion rate will be high.
- In identifying a niche you should choose a subject that has a broad scope. The niche you choose much have enough profitable products for you to sell now, and to promote to the audience that you build in the future. And if you choose a broad enough niche, when you decide it is time to scale up your business you can go into another related sub-niche and you will already have a relevant audience who may be interested in the products you have to offer and you can cross promote.
- If you want to scale up you can go into a bucket niche and then go into a sub niche and when making money you can start up another sub niche and then because related, you can cross promote.
- A word of warning; do not sub-niche down too far. This will seriously limit the number of products you can find to promote within the niche. You want to make it as easy as possible to make money; and so you will be choosing a niche where there are plenty of digital products that we can promote in return for 50 or 100% commission.
- It is also good to be in a niche where there are plenty of products with a broad range of prices. It tends to work to offer a lower end product to start with for say $20 while the customer does not know you and come to trust you…and then you can upsell with more expensive products later. A lot more commission is made on the higher ticket items so it is important to make sure that there are also products of higher values as well (in the region of $100 to $1000). That you would be happy to promote.
- It is important to choose a niche where it will be easy to find plenty of people to advertise to. This means that you also must choose a niche where there is plenty of traffic. This is extremely important. If there are not enough people looking at the subject online, you won’t be able to make money.
- Some say that you need to choose a niche that has low competition. However, this is only relevant if you are going to rely on Google and SEO as the main source of traffic. I personally now use other methods of getting traffic to my niche sites that don’t rely on Google. Relying on Google has been another of my problems in the past. As other methods have proven much more successful for me, I would not worry too much about competition as you are not trying to outrank other websites on the search engines. I do use SEO to get traffic to my YouTube Videos and to Amazong products though, so a high traffic volume and low competition are always a good combination .
Conducting Market Research: A Step By Step Process
So, you have a grasp of the basic principles of what makes a niche profitable and a good bet. What else should then do to make sure the niche is a worthy one? Here is a step by step list for you to follow:-
- Have a look around on the internet. My first port of call, and I know this is the same for many internet marketers, is to visit Amazon and have a look at the best sellers list. Ebay is another good place to look. You can see what categories people are interested in.
- Look at the magazines on sale (find them in your local store or visit magazines.com) are also a good source of market research. Magazines are usually produced on topics that people are passionate about. It also stands to reason that if there is a magazine there are usually advertisements for related products or services in that magazine…which means there are products available to sell and generally it is likely to be a proven market.
- Create a list of five broad-scope niches
- Create a mind map showing those broad niches and sub-niches branching from them.
- Go to Google Keywords (it is free to use) and check how much traffic those keywords are getting. High traffic is good.
- Google Keywords is a great tool and you don’t have to pay a penny for it. However if you have a little bit extra to spend, I recommend you try a very neat piece of software called Long Tail Pro. This tool allows you identify long tail keywords (ie keywords with a longer string of words!) that other internet marketers may not know about. This helps you to beat the competition. It also has a lot of other tools that can help give you the edge. I now use it every time I research a niche.
- Visit forums and Facebook groups relating to the niche you are interested in entering. Find out what people are interested in and what they are passionate about. You will be able to see whether the forums you visit have high level of traffic by the number of comments that have been made on them and how frequently people are commenting.
- Check out what other internet marketers are doing in the niche. Sign up to their email lists and analyse what they are promoting.
- Google some keywords in the niche and see what adverts come up at the top of the search. If there are people advertising, it is likely to be a good sign that the market is healthy.
- Check there are a good range of digital products that we can sell. Have a look on ClickBank and JVZoo – are there products for sale and what is the gravity (the higher the gravity the better the conversion rates on the products).
- Finally, start networking; do this as often as your schedule allows. Go to free meet ups and meetings in the name of research. Talk to as many people as you can, learn about the products that are being sold, listen to the strategies that the marketers are using. These can also be a good place to promote your own products as well, once you are established (don’t forget to take your business cards with you!).
I hope this has given you a comprehensive guide and process for conducting market research and choosing the right niche. Get into the right niche and the rest should be easy (or easier, anyway!)
Please comment to let me know whether this was useful!