How to pick a niche market to explore?

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When you get started with an online business, one of the first questions to answer are these:

• What will I sell?
• Whom will I sell it to?
• And how?

There are some who gloss over this stage and move on to the action steps. Unless you are very lucky, chances are you’ll find out (after many frustrating days, or weeks) that you are making little progress.

On the other hand, when you know who your target audience is, what they are looking for, and what problems they need solved, you have started out on the right foot and are well on the way to building a profitable business – provided you can create, find or source the solution to your audience’s biggest problems.

So how to select a niche market to explore?

There are 2 broad approaches:

* following your passion
* following the money

In a short free report called “The Niche Marketing Whitepaper”, I explained the two approaches in more detail.

Briefly, there are pros and cons to both.

When you follow your passion, are excited and interested in the niche you choose to explore, the chances are high of you sticking with it until you achieve success. You won’t give up out of sheer boredom or frustration because what you do by itself gives you a certain amount of pleasure and relaxation.

When you follow the money, you choose profitable markets with a much surer chance of profiting from your efforts. The downside is that very often there is stiff competition in the niche from others like you, making it that bit harder to succeed.

No matter which approach you choose to selecting a niche, you still need to dig deeper and research a lot more before you make your final selection.

Is the niche profitable?

However excited and passionate you are about a niche, unless there are enough people buying what you sell, you’ll never make a profit. Of course, you could do this for fun, as a hobby, but not as a business. So, you’ll have to ensure first that there is potential to profit from your niche.

Are there enough people in the niche?

Small niches can be wildly profitable. But for the same time and effort, you’ll profit more with bigger or wider niches, provided the crowds in that niche have similar interests.

If you sell to gardeners or fishermen, then you can sell them more than one product, multiplying your profits. On the other hand, if you’re selling to trout fishermen, or bonsai gardeners, your range becomes smaller. And the narrower your niche, the smaller your group of prospective buyers.

Do people in the niche spend money?

Going after a niche market where most members are either broke or don’t have access to funds will not help your business thrive and grow. And even if they have money, unless the people in your niche are accustomed to spending it on the kind of things you hope to sell them, you’ll face an uphill task.

These are critical questions to ask yourself – and find answers to – before plunging ahead into selling to a niche market.

In “Think, Write & RETIRE”, I get deep into the methods to conduct such niche research so that you learn how to get off to a strong start with your online business as an infopreneur.