In order to make sure your membership business is profitable, you have to select the right market. Here’s how.
Number 1 – Discover Niches with Fanatics
The first step in developing a profitable membership business is to find a market with fanatics in it. Fanatic is defined as someone with an irrational enthusiasm. These are the people you’re looking for because they are so enthusiastic they’re willing to spend money on their topic of fanaticism. OK, so we know what a fanatic is, but how do we find them?
- Look at magazine racks. This is an often overlooked, yet extremely simple way to find niches that people are interested in. It’s becoming increasingly difficult to run a print magazine. So if you see one on the shelves you know they are making money, which means that there are enough people interested in what they’re saying to make it profitable. This is a very good indication that it’s a good niche for you to go into.
- You’ve got lots of opportunities every day to see what people are interested in. Just pay attention to what people talk about on the radio, at social gatherings, at the store or restaurants and anywhere in public. If people are talking about it, they are interested in it. And this means there may be a market for information about it.
- Again, looking in the physical world for clues you can tell there are lots of people interested in something if there are clubs and organizations around the topic. Conventions are expensive to hold and attend, so if one if going on that’s another strong indication of a good niche to go into with your membership website.
- What about your interests and hobbies? If you’re interested in something, it’s highly likely others are, too. And, as an added bonus, it’s much more fun to build a business around things you’re interested in.
- One simple and easy way to find out what’s hot is Google Trends. Google Trends tells you the most popular current search terms. The reason people are searching Google for info on these topics is because they are interested. And the fact that it’s made it into Google Trends tells you LOTS of people are interested. Hot topics that people are excited about make great niches for your membership website.
Step 2 – Determine the financial feasibility
After selecting a possible niche to build your membership site around, the next step is to find out if it’s a profitable niche to be in. An easy way to determine this is to figure out if anyone else is making money in this niche.
Here’s how to determine if you can make money in your chosen niche
- Find out if there are blogs or forums related to it. Just search Google for “YourNiche blog” & “YourNiche forum” and see what comes up. This tells you there are people who are actively interested in your niche.
- Search Amazon, Google shopping and eBay to see if people are creating and selling products in the niche. What you’re trying to figure out is if anyone is making money in this niche, and if people are selling products it means they are making money.
- Watch Google Adwords for a period of time and look for ads the run again and again. Adwords ads are expensive, so people only run them repeatedly if they are profitable. And to be profitable, they have to be selling products and making money.
Finally – Figure out your barrier to entry
Once you’ve found a niche and figured out that there is money to be made in, you need to determine if you can break into this niche. Here are some things to look at to figure this out:
- Figure out what kinds of products people are interested in. If it’s mostly physical products, coaching and live seminars, then it will be harder to break into this niche. That’s because it’s much easier to build a membership business around information vs. any other kind of product.
- Competition. How many other people are trying to sell to this market? You want to start in a market that’s not completely saturated with competitors.
- Unless the market is just so big that it doesn’t matter how many competitors there are, you want to limit the competition. So evaluate the size vs. the competition.
- How ready is the market for marketing messages, and how willing are the fanatics to buy. Some niches are made up of people who require lots information and have a very long lead time, and some markets are filled with people who will spend lots of money right now.
In Summary
At this point you’ve figured out what niche you’re going into. You found your fanatics, you know they spend money and you’re confident there’s room in the market for you. Now that you’ve prepared properly, you’re success is 99% guaranteed. How to actually run your membership website is the only thing left to talk about…
