How to tell if your niche will be profitable

I'm sure people will tell you there are hundreds of ways to figure this out, but you'll probably found it eventually comes down to experience.

You could try things like the Google Keyword Tool (sorry, you'll have to google it, I can't post links yet) to see how many monthly searches a particular keyword (in this case, the main keyword(s) for your nice) are getting.
If Google doesn't have enough data, it may (may!) not be the greatest niche. If it's getting over 500,000 monthly searches, it might (might!) be slightly more profitable.

Just an idea, anyways!

Check the average CPC and Affiliate and CPA offers.

Do you have a hobby that you know alot about, and are passionate for? That's 1 niche idea.

You could always go to Clickbank and Amazon to see what the top selling items are in each category. This will give you some ideas, along with a small amount of competitors.

You could also visit resell rights membership sites to see all the different kinds of products there are, and niches that are ripe and hot in demand.

I believe one site like this is called "ebookwholesaler". Google it.

You could always use adwords and create a small page and measure feedback directly. How you setup your page is up to you but I've used PPC in the past to gauge potential orders for products that didn't even exist.

Another way is to simply talk to people. Ask around, ask your friends and family and ask them to ask their friends, ask your community - are there people who would pay for what you can offer? If you talk to enough people to get a wide enough sample size, that would give you an idea.

Hi

Since you are talking about developing products and not doing affiliate marketing or adsense you need to go beyond the Google keyword tool and CPC.

Competition
The very first thing you should do is make sure there are already other marketers or companies selling to that niche. Many people try to look for niches with no competition, but usually the reason nobody is selling to that niche is because there are no buyers.

Don't worry too much about competition, especially if you have a quality product. Few people buy one diet book, or one SEO manual, or one cookbook, or one detective novel. Competition is good, it shows there is a buying market.

Magazines
Magazines are a great resource. If there is a magazine in the niche you can be sure it has buyers and sellers. Magazines exist on advertising if no advertisers were targeting that market, then the magazine would not be able to sustain itself.

Look at the advertisers in the magazine. What companies are targeting the niche? What products and services are they advertising to this market?

Look at the articles? What headlines, titles and content is the magazine using to attract readers?

Other Marketplaces
Look at places like Amazon and eBay for products in the niche. If it is an information niche, look for books on the subject. If it is a niche like sports or camping or technology, look for products in the niche. How do they sell, do information products, guides, how to's go along with the niche like yoga or camping or travel.

Gurus
Look for 'gurus' in the niche. Does the niche have 'gurus' with big ticket items? Personal development, diet, fitness and exercise, make money, Internet marketing, and many other niches have a number of 'well known' gurus who have high priced products. See how they market both themselves, their company and their products.

Clickbank
Look through the Clickbank marketplace for products related to your niche. How many are there and how well do they sell? Look at the landing pages, sales copy and prices. If they offer a free opt-in for more info or a 'freebie', opt-in and analyze their sales funnel. You can opt-out when you're done.

'Case Study' Example
I just came back from visiting my father and he had a magazine on his coffee table called "Backyard Poultry". A magazine dedicated to small scale raising of chickens that publishes 6 times a year. Now that is a targeted niche! Yet it supports a magazine with hundreds of advertisers.

Backyard Poultry magazine. Dedicated to more and better small-flock poultry.

If you saw that you might think, "Hmm maybe these part-time, semi-urban farmers need a guide on how to build a chicken coop to hold these birds". And maybe you would develop a best selling Clickbank product that has maintained a gravity over 50 for 3 years now.

Build A Chicken Coop Plans

Mahlon

That's a big subject and many ways to go about it. I know of several different ways. One is to find a problem and solve it, you can get ideas from answer sites, (YahooAnswers, eHow etc.) find questions people are asking how to do etc.
Find where the "buyers" would hang out like at "nicheforum" and ask what is the one question you would like answered or help with "howto" "niche "problem".
Another way is to find a popular selling product, such as on ClickBank or an Amazon product and look at best sellers or Gravity above 20.
Take the niche kw and look in Google kw tool for global exact searches. It depends on how easy that KW is to rank on page 1. Number of Google search page results doesn't matter, it's --can you beat the top 10?
Get free version of TrafficTravis software and check that kw in the seo competion for the first page(I own the paid version, you can download kw files etc)
This software will tell you if it is easy, difficult or hard to rank for that KW on page 1 of Google, if not just choose another KW with lower search volume in G KWtool and try again. It's been said around 1200 global search results in GoogleKWtool and up, If there are alot of big name sites in top 10 move on to next KW, with Panda update if Amazon, Walmart, ebay, shopping.com etc, you can't beat now if most of them are in the top 10.
If there is a site there in top 10 of page 1 with NO SEO- BL's(you want to vary kw slightly now), title KW(want to be slightly varied, like add an s), H1,2,3 kw title tags(slightly varied now)etc, you could take their place with proper SEO (now slightly varied kw's not exactly the same repeated) Bookmarking and BL's. But now of course we know social interaction is the biggie on the list. make sure you have social buttons on your site to allow and encourage comments and sharing etc.
You could make some info posts( that have links to products) and go to forums and direct people to "learn more to solve.." give tips, reviews, training etc. and link to a product from that page.
Find what people want, what are they asking ?'s about etc. then find a product or create one. Or choose what is already working. (if there are no ads on Google when you search your kw, it's not profitable cuz no one is buying ads for that kw.

One of the quickest ways to check whether or not there's money to be made in a market is to enter your main keyword into Google and just see if there are any paid ads. If there are, you know people are making money there, so it's a good bet there's more to be made.

Cheers,
Ray

Here are a few techniques for testing profitability of a niche market

1. First, and by far the best, technique is to look at other products selling in that niche. Typically you want to focus on a problem or desired outcome where there are already proven top sellers (Clickbank, Amazon, Commission JUnction, workshops/seminars, magazines, etc...) Let buying activity guide you to the niche, then differentiate yourself through the solution you offer (either how you provide that solution or the specific solution you offer) . If you follow this rule (most people don't), you seldom will go wrong

2. If you are still unsure, then begin testing content around your topic, ideally in a way that your readers can react (launch or post to discussion forum, blog, social networking are all great for this). For example, I had a larger niche a year ago where I was uncertain what the real sub-niche should be...so I posted several blog posts around different topics and soon found out that two received much more attention and participation than the other dozen or so...these guided development of my first product in that market and it has sold great.

3. Start small, grow fast. A common mistake with information marketing is to start with too big a product. A 40-page ebook that hits on a very speciifc demand will do better than a 200 page ebook that may cover allot of ground, but misses the market in terms of targeting. So after following #1-2, start with a focused, smaller ebook or report and then use feedback to enhance it - even expand to additional products over time. You may have to price your first product a little lower, but the feedback you get will allow you to build a much bigger product base and business over time.

Jeff

Sell whats already selling!

Well, long story short, to determine if your niche if profitable or not you must realize how much competition you've got.

seriously, the more competition you got the marrier.

dont be afraid of competition, competition is an enemy of an enemy, which makes him a friend.

if your niche has a lot of competition, then it is in demand.

if not, something stinks and you should stay away from this niche..

Just my 2 cents, good luck

Well, I hope you learned some important lessons. You're supposed to find the market first and then create the product, not the other way around. Though I'm curious, how did you come to the conclusion that your 200 page ebook was a waste of time? How many distribution channels did you try? Sometimes it takes a while to figure out your conversions after testing and tracking and tweaking to come up with a winning marketing funnel.

There are many ways to test a niche. ONE way of doing it is to find a market that has a TON of affiliate programs. Drive some traffic to a few offers WHILE building a list and if you can at least break even, then you know you can make a profit by offering your own products.

Remember, any niche with competition and advertising by definition it profitable for people, so it's just a matter of finding out what they are doing that works. This is where market research will go a long way.

RoD

Keyword Research & Analysis.

Product Sales Analysis.

An unbiased assessment of whether you have what it takes to make money in a particular niche.

All very valuable info on this thread.Wll help any newbie!

You can try using the google keyword tool and see how many people are searching that niche.

my niche is my hobby, i always do what i'm fond of, luckily it's some thing popular and selling

take not on what jeff says, he raises some good points

just take a look at what is already selling

the famous newbie mistake is "ssshh don`t tell anyone will ya but i have found a niche with lots of traffic and no competition so i can rank easy and rake up"

big mistake

the biggest one is (you need competition, and lots of it) competition means the market is very profitable and there is more than enough money to go round, despite what people may tell you

clickbank is a great place to search for products so you can see what other products are already out there in the niche

after you have been online a while you will get to know the hot niches pretty fast as the same ones always keep popping up

paul

No need to overthink this. Just go to clickbank or dummies.com and see if there's similar products in the niche you are thinking about.

This is my criteria for a great niche:
- 1000 or more searches a month

- 100,000 or less exact match competing sites (this can vary, depending on how much SEO the top competing sites are doing)

- CPC $2 or more

- Adwords ads exist

That's it. It's worked for me.

For me the most efficient way is to use Google keyword tool.

It is easy to find out what will bring traffic using google keyword tool or other custom keyword research tools, but ultimately you want to find out if people will actually buy.

To find out if people buy, take a look at the popularity of products on big stores like Amazon - see how many products they have in that niche, if they are in the bestsellers list, how many reviews they have etc.

Also take a look at google suggest and amazon suggest to see what kind of phrases people are searching for. This can give you an indication of whether the searchers are looking to buy. e.g. people searching "italian recipes" are less likely to be buying than people searching "italian recipe books".

If you find a fresh niche the only way to truly be sure that it will be profitable is to test it; the proof of the pudding is in the eating. Set something up quick and dirty, and send some PPC traffic to see what your conversions are like.

One of the easiest thing to do to make sure whether or not a niche is profitable is that you can do a lil research from magazine, TV, offline media, there you will find long lasting advertising of some products.
Get that products promoted in online world, surely you will do some kw research first before promoting it, but basically the big picture is to get the long lasting product in offline world, look for the affiliate program online then promote it if you think that the kw research is good (the search volume).

I use google keyword tool or any other keyword spy tool, if the PPC is high normally its a good niche

You will want to start in an evergreen market where people will always face problem as long as they are around. This is good because you will be able to make money by providing solution to them. One top marketer has recommended to start business in these 3 general markets because it is evergreen and there are lots of money

- Dating and Relationship market
- Health and Fitness market
- Making Money market

No doubt that it is competitive because it is profitable. But there are still enough room for any person who is interested in these market. It takes me some time before I realized this point.

Google Keyword Tool is a definite great source. Also if selling products, search Google for top selling products for Amazon, Ebay and Craigslist.

To test whether a new product will convert or not, I do a couple of things.

First, I will research a similar product of the same niche that has already launched.

I search for the product in Google Trends and see how much 'buzz' it had and I use Google Keyword Tool to see how many searches the keyword had.

If the product did well, created a lot of buzz, and had a fair amount of keyword searches, then I consider it safe to promote the new product.

Just make sure the new product is equivalent or better looking than the similar product you researched.