In this post we are going to go over four basic indicators to determine if a niche is profitable.
Your business strategy should include Niche marketing as it highlights areas of profitability. During the niche marketing research you can reliably gauge if a business will flourish within a particular niche. During the research process you will get a good idea if a niche market is viable or not. There are some reliable indicators that help determine the profitability of a particular niche market for your product/service.
The Existing market Profitable Niche Indicator
One basic indicator is if there is already an existing market for your product/service. Along with an existing market there should also be actual and consistent buyers for your product/service within the market.
This indicator is crucial. It is through this information that you determine if there is a demand for your product/service. If there is a demand, this means that the niche market can be profitable. If there is almost no activity at all for your product/service, then there is likely no market; Or at least not one you can easily tap into.
As such, before even venturing into a business, you must ensure that both a market and a demand exist. There are available online resources that can help you determine a profitability indicator. Clickbank, Google and Amazon are reliable online sites that can help you decide if your business can be lucrative.
In the last post you discovered how to use Clickbank and Google’s Pay Per Click cost to determine demand. The same principle applies to this Profitable Niche Indicator. For more detailed information I recommend you get the Niche Research Guide CLICK HERE.
The Frequency and Recognition Profitable Niche Indicator
The frequency at which a product/service is needed and whether the product/service is easily recognized are also indicators to whether the niche market will be profitable.
Repeated searches for your type of product/service usually indicates repeated purchases. Niche markets with these indicators prove to be more viable for businesses.
Frequent discussions about your product/service in multiple article directories within the niche market you are researching indicates these factors are present.
If your products/services are mentioned within these article directories, it will be easier for the business to promote its products/services and increase demand for the solutions you can provide.
The Thriving Profitable Niche Indicator
Another indicator is whether the niche has been thriving for a sustained period of time within your main market.
In this niche market indicator, your profitability will depend largely on the time you enter into the niche. It is better to enter a niche when it is just starting.
Getting in ‘on the ground floor’ provides you with a big potential for to grow the business in this niche to become a ‘go to brand’. It will be much harder to stake your claim in a niche that has been around for a long period of time. This is because other businesses will already be well established within the niche.
You should however display caution when utilizing this indicator as a reference to profitability. Many new niche markets can fizzle out quickly. While you can utilize this indicator to build brand awareness and make some fast sales, you should have an older more established niche to operate in at the same time. The extra credibility, brand awareness and customers obtained from a flash niche is a good thing, and some of the niche markets remain for prolonged periods of time.
The Complementary Product Profitable Niche Indicator
If there is scope and demand for complementary products/services that you could easily provide or offer (perhaps through partnerships or affiliates) within the niche, it is another indicator that it could be a good fit for your business. This indicator provides the opportunity to make income not only from your main product/service but also other sources of income from complementary products, making the opportunity for profitability much higher.
These are four basic indicators that you can test for the profitability of any niche market. Your business has a great chance of success within a niche market when all four indicators are present.