If you’re still looking or choosing a niche that you’d like to start for your online business, then I’d like to share with you the 5 factors that I check when choosing a profitable niche…
5 Factors When Choosing a Profitable Niche
1. Is there a Huge Demand in that Niche?
I may have a revolutionary product or idea, but if there’s no demand for solution in that niche, then it’s not a niche that is worth pursuing for me. Fortunately, it’s not hard to determine if there’s a demand or need in a specific niche. The internet has made it possible to do some “mind reading” by using research tools.
One of the most popular keyword research tools that I use is Market Samurai. It’s my indispensible tool when doing niche market and keyword research (Read my Market Samurai Review here)
Another advantage of the internet, is the ability to test your assumptions and hypothesis quickly by running paid ads and split testing. I can quickly run an ad in Google Adwords or Facebook Advertising, and see if there’s a response from my target market or demographic.
If I get a positive response from them, I will most likely pursue and continue with the niche.
2. Am I Choosing an Evergreen Niche?
What’s an evergreen niche? It’s a niche that will stand the test of time. If you choose that niche, will still have demand for that niche in the next 3-5 years? How about 10-20 years? If it’s only a fad and it’s seasonal, I won’t pursue that niche.
The time spent in building a website in an evergreen niche versus a seasonal niche is almost the same. I would rather build an online business for years to come.
3. Are there both Physical and Digital Products being sold (or can probably be sold) in this Niche?
This is another crucial and very important question, because if you want to monetize or earn from your niche sites, then you need to understand this factor. Are there existing physical and digital products sold as a solution in your niche?
If you can’t find physical or digital products currently existing for your niche? Is it possible for you to create one? If not, I’ll skip that niche.
Here’s an example…
Let’s say I wanted to write about Oxygen and the air we breathe. Yes there’s huge demand for this (In fact, we’ll die if there’s no air and oxygen). Is it evergreen? Yes, as long as we live.
But can you write an ebook about Oxygen and the air we breathe? Yes, but I don’t think people would be willing to buy and read it. Also, how about a Bottle of Oxygen? Do you think people would buy it? Nope!
Hope you get my point here. The physical and digital products must be able to solve a problem of a person within that niche.
4. Can you Compete with the Top Competitors?
After checking that your niche idea passed the 3 factors above, it’s now time to check for the competitors? Can you compete with them for market share? Are you competing with giants? Are there small and big competitors in your niche? (Google it)
As a matter of fact, competition is not bad. It’s actually a sign that it “could” be a profitable niche. Otherwise, people and big corporations won’t spend money on it.
What you need to decide on is what’s your “tolerance” level when it comes to competing with them?
Some niches would take months to compete on the top spots, while others could take weeks. It’s all up to you on how long you’re willing to “commit” on your niche. As a rule of thumb, don’t have too many websites on your plate. I made the big mistake before of having multiple websites and multiple projects side by side. When I did that, I lost focus and all of my niche sites suffered because I was spreading my resources too thin (time, money, resources).
5. Is this something that you’re Passionate about?
Personally, if I don’t like the niche, I found out that I lose interest in it after several months (sometimes even weeks). Although you can create an online business and a niche site in a topic that’s entirely new for you, I believe that you should at least be passionate at what you do (what you write, what you offer,etc).
If not, then this whole “building an online business” thing will become tiresome and you’ll quit before you even know it.
The niches that I’ve chosen are both my professions and something that I’m really passionate about. It’s also something that I do. That’s why it’s easy for me to write about my topics.
Regardless, it’s a personal choice. You can skip this last factor if you like, but I’ve found out that I was able to connect and understand my readers more because I can relate to them because of my passion to my topic and niche.