How To Find Profitable Niches By The Numbers

If you ask some people, they will tell you that finding a profitable niche is as much an art form as it is a science

. Well, that may be true, but understanding the "science" behind it is a vital first step to being successful doing it. After all, even the greatest painters had to learn the basics before they became masters.

The "science" involved in niche research revolves basically around a few numbers. These numbers involve the amount of money being spent on advertising, the number of competitors within the market, and some demographics about the customers. Once you have a grasp of how to find and use these numbers, you'll be well on your way to becoming a master research artist.

The first question you should be asking yourself when looking a niches for potential profitability is the dollars being spent on advertising. Go to each of the search engines armed with a good list of popular keywords related to the niche and start searching. For each result, look at the number of advertisers. If the majority of these keywords have several pages of advertisers within the search results, this is a very good sign.

Generally speaking, the more competition there is for advertising, the more that advertising costs. However, it is still important to try to determine the cost for advertising. With most pay-per-click networks, such as Google, where the advertisements are shown with search results, you can look up an estimate of the average price of each click, and possibly the price bid for top placement. Higher prices usually mean there is more profit in the niche to support the advertising.

While you are doing these searches, you should also make note of the number of competing pages for each of the search terms. While this number isn't really a direct reflection of the profitability of the niche, it can be a measure of the strength of competition for each of those keywords, and therefore a general look at the overall niche market. So, even though there isn't a direct correlation, this can show if the market is strong or weak.

More directly tied to the profitability of a market is the number of products being sold and vendors selling those products. Looking at online marketplaces, affiliate networks, auction sites and even doing searches as though you were looking to buy something in the market is a good way to gauge this. The more vendors and the more products, the bigger, and most likely the more profitable, a niche market will be.

The final piece you may want to look at are related to the customers within the niche. Generally speaking, if you can determine the demographic profile of a typical customer, you can see just how large the potential for the market is. Also, defining this profile can help you determine how and were to market to this group. After all, a niche is not going to be profitable for you if you can't get the right message to the potential customer, ending in a sale.

How To Find Profitable Niches By The Numbers

By: Chris Steiner

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