In order to make sure your membership business is profitable, you have to select the right market. Here’s how.
Step 1 – Find a Fanatical Market
The number 1 thing you have to do is find fanatics if you want a profitable membership website. What’s a fanatic? It’s someone who is so excited about a certain topic that they will spend their time and money on information about it. 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. Because it’s becoming harder and harder to keep print periodicals profitable these days, if you see a magazine on the shelves, you know it’s making money. And that means there are lots of people interested in it. That doesn’t mean definitely that it will make a good membership business, but it’s a good starting point.
- Watch and listen for fanatics in your daily life. Pay attention to conversations, social events, TV, restaurants, public places to see what people are talking about. People generally talk about things they are interested in. And that may also mean they’re willing to pay money to learn more about it.
- Don’t forget about clubs and organizations. If there are enough people to to build a club, there are certainly enough people to start a membership site on the same topic. Likewise, if there are enough people to hold a convention, there are definitely enough people to fill your membership website.
- Think about the things that you are interested in. 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.
- Google Trends. This is a great way to figure out what people are interested in. This service shows you the current most popular search terms. These topics are the hottest topics because lots and lots of people want information about them. These are the niches you want to be in – lots of people actively searching means lots of opportunity.
Step 2 – Determine the financial feasibility
OK, so you’ve got a great idea for your niche membership business with lots of fanatics. But will they actually spend money? The quickest way to find out is to determine if others are profiting in your potential niche.
Here’s a punch list for figuring out if anyone’s making money in your niche:
- First go to Google and type in the name of your niche followed by “blog” and “forum”. If there are blogs and forums related to it, that’s a good sign. This means there is a large group of people already assembled for you to market to.
- See if other people are creating and selling product in this niche by searching in Google Shopping, ebay and Amazon. 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
OK, so you found a hot topic and you know other people are making money on it. Will you be able to get involved and do the same? Here’s how to make this determination:
- Product types. What kind of products are being sold in the niche? You’re looking for a niche that sells info products. That’s because it’s much easier to build a membership business around information vs. any other kind of product.
- The last thing you want is a marketing filled with tons of competitors. A few means it’s a profitable niche, but too many means you won’t be able to take a piece of it.
- Size vs. Competition. Some competition is good. It means that this is a profitable market. And as long as the size of the market is large enough to support the competition, you’re fine.
- How quickly do people in this market make buying decisions and are the ready 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.
Summing it all up
OK, now that you’ve figured out what niche you’re going to go into. Determined there is money to be made and that the competition is not too strong to break into it. You’re ready to start your membership business. If you’ve done your homework, your business will be a success because you already know your market is a profitable one with room for you. Learning how to run a membership website is a topic for another article…
