Creating demand out of existing demand is crucial for business success. The key point here is to note that for niche market selection, the demand must already exist.
Unless you are the owner of a large multinational corporation with millions of dollars to spare, you really have no business trying to create new demand. It’s better to sell picks and shovels in a gold rush rather than try and strike gold yourself.
It would be pointless to come up with demand where none previously existed because your chances of failure are quite high. It’s a much safer bet to analyze existing demand and capture that tried and tested market.
To do this, you need to pick the right niche market. What is a niche? Well, If you don’t know already I think this quote from vocabulary.com explains it well “A niche is a space that’s all your own, from a literal corner or enclosure to some kind of professional specialty. Like finding a niche in the scented soaps market with peanut butter body wash and winning over a loyal, if not nutty, following.”
For example, people who are thrilled to death about Pug dog puppies are in the Pug dog sub-niche. These are the people who are looking for anything and everything related to this type of breed of dog.
They would probably be interested in all sorts of Pug-related charms, Pug dog clothing, possibly even doggy footwear that fits Pug dogs. You get the idea.
You have to pick subject matter categories that are tightly defined that already have existing demand.
Now, this might seem pretty simple but a lot of people get this wrong because they pick a niche that has one element, but when they actually start building their business, it turns out that they missed other elements that can influence their success in their chosen niche.
How to Pick the Right Niche
So how exactly do you pick the right niche? Forget about everybody else’s niche. Forget about thinking that there is some sort of special one-size-fits-all niche that is guaranteed to make you money. There are no free lunches.
Unless you are the owner of a large empire with millions of dollars to spare, you really have no business trying to create new demand.
Set that aside. Focus instead on picking the right niche for you. Here’s how you can do it.
Niche Market Selection
Step 1 – Pick A Niche You Find Interesting
First, it makes sense to select a niche market based on your personal interest.
This is pretty straightforward. Are you interested in that subject matter of the niche? Is it something that you can find yourself excited to talk about? Are you interested in a range of products that you would still be interested in even if you’re not making money off those products?
In other words, you have to personally resonate with this set of products or interests. Being passionate about your niche makes niche market selection, so much easier.
Next, is there an existing demand?
Step 2 – Make Sure There Is Demand In Your Niche
One thing I often see people miss in their niche market selection process is the failure to check the demand in their niche.
With the help of the internet, it’s fairly easy to suss out demand for any given niche. First, come up with keywords that are related to a niche. In the Pug dog example I gave earlier, you can come up with a long list of keywords that are related to the Pug dog niche. Pug toys, Pug leads, etc.
Put these keywords into the Google Adwords Keyword Planner tool. This tool will tell you the estimated search volume of your keywords. Check through the volume.
Are you happy with the search volume? Is there enough demand as reflected by monthly search volume? If not, move on and check out another niche.
You can keep repeating this until you find a niche that has enough search volume on Google Adwords. It doesn’t really make any sense for you to target a product or service that only 50 people have searched for in a month.
Targeting a niche that has very little monthly search volume is probably not a good investment of your time. focus on a niche in demand.
Next, you need to look at the commercial value of the niche.
Step 3 – Check The Commercial Value Of Your Niche
Google Adwords keyword Planner tool is very helpful when looking for this information.
Just do a keyword search and you will see the estimated CPC (cost per click ) for that keyword. This should give you a fair idea as to how much advertisers are willing to pay those keywords.
If advertisers are willing to pay that much, then chances are, they are making slightly more than that amount for each conversion.
It’s prudent to be strict when judging the commercial value of the niche you’re targeting. The ROI (return on investment) must make sense to you, otherwise, you could just be wasting your time.
Next, you need to find a niche that has manageable levels of competition.
Step 4 – Check The Competition In Your Niche
Once again, this can easily be researched by simply typing in keywords related to your chosen niche into Google’s search engine. It’s a good idea to use the US version of their search box, the results you get will show how many other competing pages are targeting that keyword.
Moving on, you need to make sure that your niche is scalable.
Step 5 – Check There Is Room To Grow In Your Niche
Research the keywords that are related to your niche. Study competitor websites that already offer similar products and services targeting your niche. A great tool to use for keyword research is SEMrush. You can check out our How To Do Keyword Research With SEMrush – Magic Tools article for more info.
Can you find a situation where a customer will buy a product and also be willing to buy another product? Is there an already identified set, of related products in that niche?
Another way you can look at this is whether the customers that buy products in your niche have a well-defined interest, so you can sell other similar products that speak to those interests. Is your product or service relevant?
When you target the right niche, you are not only able to sell products that specifically address that niche, but the interests of your customers are broad enough that you can find other relevant products and services to offer them.
This can allow you to maximize the value of your mailing list over an extended period of time.
Your mailing list becomes a solid money-making asset instead of a one-off conversion or sales system that is essentially worthless after you sell to a fraction of your list members at one time or another.
If you need help with building your email list you can check out our Top Tools For Building Your Email List article.
Lastly, you will need to study whether the niche can be sold to in a low-cost way.
Step 6 – Check The Profit Margins Of Your Niche
The easy way to do this, of course, is to research other businesses targeting your niche.
How do they make money? Are they selling a book or some sort of digital product that they only need to create once and sell many times over? Are they selling something unique each and every time?
Generally speaking, it’s a good idea to stay away from selling unique tangible products or products that require a lot of input.
While you can still make money in a niche with affiliate marketing, you will probably enjoy a larger profit margin if you were to sell a digital product or consultation.
Think about publishing a book for example. It takes work to research, write and publish a book. Once you’ve published it, however, your costs go down to zero because when people buy a book, you don’t even have to be around to process the payment.
You work only once, but you sell many times over. The best part is that the payment processing takes place in a seamless and automated way.
Consider this when doing your niche market selection process.
The lower the cost of servicing the niche, the better.