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How To Know If Your Niche Has Enough Demand To Be Profitable

By Dr. Mani
36 Comments

I created my first infoproduct way back in 1997. It was for a very small and specialized niche. Since then, that little ebook has sold over SEVEN HUNDRED copies. Even today, it sells a few every month – with no effort at all.

That didn’t happen because I was smart – but because I was lucky. Very lucky.

Intuitively I had picked a product that was in high demand by the target audience. One they simply had to have because it offered the solution to a pressing problem that couldn’t be solved in any other way.

Few information marketers today have the luxury of taking such a chance with their product creation, especially now when over-looked niches with little competition are almost non-existent. More than ever before, anyone venturing into a new niche must be able to do one thing accurately and well in order to succeed.

Infopreneurs Need To Follow Demand

In another post, I wrote about the link between passion and entrepreneurial success. I explained how pursuing my passion for writing led to developing an information business that’s built on creating content and presenting information in a format that is valuable and useful to my clients.

If you read that article, it might give the impression that all one needs in order to become successful is to tap into your own passion, and then jump right in to build a business around it. But that approach won’t work every time. In fact, it may well be risky and dangerous to try that.

Because while it may be exciting and fun (at least for a while), blindly chasing your passion is not a formula for high achievement – unless it also meets one other criterion.

You must learn to correctly identify desire and assess demand.

Every entrepreneur must learn to do this well. No matter how passionate you are about it, no matter what niche you plan to enter, what product or service you plan to create, what offer or price you are thinking about, your idea must first pass the acid test – which is the answer to this question:

Who Cares About It?

There are three possible answers.

1. Nobody – in which case, you probably don’t have a market or a viable business that can be launched around it.

2. A few people – which means you’ll have to take a closer look to see if that alone is enough to give you a chance at building something of value.

3. A lot of people who are eager to buy - which is the ideal substrate to build a business upon and succeed massively, quickly and easily.

You want a hungry crowd of prospective buyers who are eagerly, even desperately seeking to resolve a problem that you have the solution for – and are able and willing to spend their money buying that solution from you.

In my first infoproduct venture, this happy situation existed quite serendipitously. So I succeeded at it. Today, any new venture I embark upon follows a period of analysis and research to find out whether or not my passion has an echo in the hearts and minds of my target audience.

How To Know Who Cares?

Is there a way to find out if demand exists, and if there is enough desire for what you are offering your target market?

Yes. And the good news is that there are repeatable processes you can adopt to carry out this research in your own business.

Here are three ways to find out:

1. Ask - Conducting surveys or focus groups is a time-tested approach to evaluating the needs of a potential market. If you have a database of prospects like an email list or readership of your blog or past customers, you could poll them to see if enough interest exists in a product or service you plan to launch.

2. Observe - If you’re new to a niche, or don’t have the resources available to conduct complex surveys, you may get the same results from careful and analytical observation of how people behave. What do they read, watch and talk about? What websites, blogs and content do they consume? What do they buy and from whom? How much do they pay for it? Why? The answers can be insightful.

3. Research - You can add more information to your analysis by conducting formal research into the psychographics of your ideal market as well. Industry reports and trend analysis can indicate the direction a market is moving in. Major shifts can be sensed well in advance if you can draw intelligent inferences from data that’s freely available online.

But even the best study will not be able to tell you conclusively how things will turn out. You still have to take a leap of faith, make a judgment call and trust your gut instinct to lead you along the right path. As you do this more often and gain experience from past mistakes, you’ll grow more comfortable making these choices after a study of the ground realities.

Is there a way to make this a little easier? Maybe. I’ll share some questions that I ask myself (and find answers to) before making a decision about whether or not to go ahead with a plan or project.

Who Are Your Ideal Prospects?

As amazing as it may seem, the vast majority of online entrepreneurs, including some who run very profitable businesses, will be hard pressed to clearly define who their ideal prospects are.

I used to function on this level for many years, until a mentor taught me the vital importance of getting to know my audience better. The steps outlined below helped enhance the value I’m now able to provide customers in my information business – because it helps understand their needs better. It will help you do the same.

Who Needs What You’re Selling?

The simple answer is:

Anyone who isn’t yet at the point to which your product or service can take them – but wants to be there.

That’s a broad and very generic answer which only serves as a starting point. As you dig deeper into the following steps to better understand your ideal prospect, you’ll uncover more information including the demographic and psychologic profile of your best customers.

Here are some questions to get you started on your research:

These are just some of the questions that will help you understand the mindset, attitudes and environment in which your prospects currently exist. And to do a great job of delivering the right kind of value to your customers, you need to know even more.

You must be able to get into their minds, and understand the way they think and feel about things – including your product or service.

That is the key to identifying the reasons why they may (or may not) want to buy from you… and in turn, this knowledge will guard you against making the wrong choices about which niche to enter and dominate.

When you’re armed with this information, you too will be able to set up an information business in a tiny niche and have it bring in a steady income over many years – because you’ll be serving a market that desires your product, and wants it badly enough to spend money on it.

Who Does NOT Need You?

The old adage is just as true of business as of life: “He who tries to please all, pleases none!”

That’s why it is just as important to find out who is NOT your prospect, as it is to identify your ideal prospects. There are two reasons for this.

1. You avoid wasting marketing dollars and precious time or energy going after the wrong audience.

2. You can tweak or modify your offer to become desirable to this audience if you can identify WHY they are not interested.

So What Really Matters – Passion or Market Demand?

Both matter. Equally. One without the other will make you under-perform.

That’s what my own experience working on an information business for many years has taught. In an ideal world, you will be able to link up your passion to an existing need around your business, and then use that positive energy to build and grow your venture, effortlessly getting past all hurdles and obstacles to succeed.

And while there are some business coaches who argue that passion doesn’t quite matter if you have picked the right market, I tend to disagree. True, you may build a profitable venture that’s based purely on market demand. But in the end, if you are engaged upon something that you can’t put your heart into, then everything that you do becomes a chore rather than a joy.

What do you think? Go on and share your thoughts in the comments below :)

Dr. Mani

About Dr. Mani

Dr.Mani is actively engaged in spreading awareness about congenital heart disease (CHD) and fundraising to sponsor heart surgery for under-privileged children in India.

An ardent group of volunteers and donors have embraced this noble purpose that is bigger than any individual or group, and grown it into a global movement that has touched and saved the lives of 87 little children. You can help too. Learn how at http://www.DrMani.com

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36 Comments

  • To find out who cares about it..then you must do keyword research. Once you get those then you must go after that audience.

    “Black Seo Guy “Signing Off”

    • I agree with you, Coleman. I was very tempted to start a local niche website here in Auckland, New Zealand. When I did several key word searches, I discovered that there were only about ten people per month searching those terms locally. In the end, I stayed out of that niche. I could have potentially wasted a lot of time if it hadn’t been for key word research.

      Cheers,
      Max

  • What service do you use as far as someone buying a product from you? Like shopping cart or some other type of service. I am preparing to create a product for sale, but I want to get my ducks in a row now.

    • Personally, I use Clickbank, Plimus, e-Junkie, 2 CheckOut and PayPal. There are many other options, too, some more elaborate and with services like shopping carts, membership site management and others thrown in.

  • [...] How To Know If Your Niche Has Enough Demand To Be Profitable (entrepreneurs-journey.com) [...]

  • What’s up, doc? :-)

    I especially agree with finding out who is NOT your prospect. Trying to please anyone is a recipe for disaster. I think it also creates a lot of anxiety, when you try to create an information product (for example: “what if those people don’t like it?”)

    • Hey, George, it’s been a long time since we last spoke! Nice to run across you here on Yaro’s blog :-) Great point about it helping the creative process – you *know* everyone it is intended for *will* love it!

  • Good, tell-it-as-it-is stuff Dr Mani. You give great specifics on being specific on who will buy what you intend to offer. Best to know before you start and tailor it to an audience than wait until it’s too late and chase one. Great info for infopreneurs!

  • Affiliates: Passion vs Demand – Determine if the Niche will be Profitable…

    I’ve written a lot about the fact that if affiliates can find something they are passionate about to focus on – ESPECIALLY for their 1st niche, it makes it easier to get started and to stay motivated…….

  • Nice post. I think that your points are somewhat vague for a “how to” article as in there aren’t really a lot of practical nuts and bolts to it. i.e. Do this, this and this specifically (which is always nice but often out of the scope for a post like this I understand).

    That being said, I think you’ve given a practical and important birds-eye view of what info marketers should be looking for in researching their market and knowing what sort of information is most needed when looking at prospective niche’s and more importantly the people that will be their prospective clients.

    A follow up to this post with specific techniques would be a great addition.

    Thanks Dr. Mani.
    Best,
    Matt

    • Matt, this isn’t quite a ‘how to’ post, but a ‘WHY’ type post.

      Good advise I’ve received as an infopreneur includes “Tell them WHY, and Sell them HOW!”
      :-)

      P.S. – I’ll add a post with more specifics to my ‘to do’ list for later.

  • I agree with you that you need both. :)

    A good market without any passion will make you a dull boy…

  • thanks for this post Doc! i think we also could use tools such as the keyword tool to look out for profitable niches/keywords!

  • “over-looked niches with little competition are almost non-existent.”

    I don’t think that is true. There are still many niches that either have little to no competition or are underserved. The reality is it takes doing some research to find out if a particular niche can be infiltrated effectively.

    There definitely has to be a process for finding out if there are rabid consumers of the product you are going to sell.

    - Andrew

    • Andrew, I agree. It used to be that one could find over-looked niches and end up being profitable. Today, over-looked niches are over-looked FOR A REASON… there’s little profit potential in them! So it’s more important than ever to analyze that aspect before plunging ahead into a niche that’s apparently clear of any competition.

      • Yes, there definitely has to be the potential to make money in a niche. Otherwise, why go into it, unless you are not trying to make money. Although it does seem like just about every niche has some money in it, no matter how small.

        - Andrew

  • Hi,

    I started my own ADSL isp and would love to hear what a entrepreneur site think about my website.

    Kind regards
    Hugo

  • Hi Dr. Mani,

    “Major shifts can be sensed well in advance if you can draw intelligent inferences from data that’s freely available online.” – Do you have any specific online sources you can share?

    • They’ll vary by niche, Jason. What works for me in the infopreneur niche, for instance, wouldn’t apply in the health niche, because the resources that keep abreast of latest developments and trends are different.

      It’s best to seek out niche-specific resources that keep on top of recent shifts/trends – and then track them along with studying expert insights of the best specialists, to get a feeling of how things are moving.

      Something paradigm shifting, like the move to mobile computing, for instance, is apparent from mainstream resources – but for tinier, more tightly segmented niches, you want to monitor specific tools and sources that have their finger on the pulse of that niche.

  • I have three new businesses that are in the development phase. You make some excellent points here, and I will definitely implement some of your suggestions concerning getting to know who your ideal customer is. I have flown blind in this respect with previous businesses instead of establishing from the get go. This time we will see if we can gather more extensive intelligence on our market.

    Great post.

    Thanks
    Rob

  • Very good post ! But if you could also add some references to some sites or tools that will help in the research process, it would be great. If one can find a niche that is profitable and also his/her passion then he’s a very lucky person.

  • [...] How To Know If Your Niche Has Enough Demand To Be Profitable … [...]

  • [...] How To Know If Your Niche Has Enough Demand To Be Profitable … [...]

  • Excellent post! I love making passive income. I have two products that solve problems for people. They both consistently sell.

    My biggest problem is traffic.

    One of my products is name-brand related. So, since Google has tweaked the organic results to favor brands, I don’t sell nearly as many. I used to be in the top two positions and now I find myself around number five or six in the SERPS.

    The other product is in a highly competitive niche. I always feel like I’m swimming up-stream.

    I’ve tried Adwords, but it has not produced profitable returns.

    I love this article…very inspirational!

  • Hello Dr Mani, another great post writing by you. It’s step by steps to become an information publishing. Thank you very much for your article!

  • [...] How To Know If Your Niche Has Enough Demand To Be Profitable … [...]

  • Excellent post, Dr Mani, I really enjoyed it.

    “He who tries to please all, pleases none!” – that’s definitely a mistake I’ve made in the past, so thanks for the advice surrounding it.

    Also some good pointers on the research one needs to undertake regarding the target audience.

    ~ Rory

  • Things have not changed so much even with over saturation of niche markets. what you have to do is identify a need or passion that people care about and simply discover what they want to know about this need or passion and write well research and written content to be sold at whatever the current price index indicates people are willing to purchase information for.

    its simple really.

  • [...] How To Know If Your Niche Has Enough Demand To Be Profitable … [...]

  • [...] How To Know If Your Niche Has Enough Demand To Be Profitable — Marketing Gurus are always quick to tell you how easy it is to make money online. ‘Just pick a niche and build a website,’ they say, but what they usually fail to tell you is how to know if you’ve found a niche you can make money with. This is a good read, even if you’ve already gotten into a niche, but are having difficulty getting over the hump with your monthly profits. [...]

  • [...] How To Know If Your Niche Has Enough Demand To Be Profitable … [...]

  • Another great Posy Dr Mani, the thing I’m most impressed with is what you do for children, people like you make this world a better place, keep up the excellent work.

    Karen

  • Very Good Post. I am impressed totally with your post. Keep it up.

  • Good thoughts. Too often start-ups/entrepreneurs do not do sufficient market research to see if the market can support the revenue necessary to justify the time and cost of development.

    Cheers,
    K

  • Muhammed

    i think you are absolutely right, although i am a beginner and didn`t set up a website or blog yet, but i am agree with you Yaro , passion is so important when it comes to do something because it will make you enjoy what you are doing and will make you do your best to achieve a good work.
    thanks Yaro

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