Profit Potential for Your Niche
There are many businesses in the economy that find very promising profit potential for your niche markets products and services that will tackle existing problems. For example starting out in 2005 in the “Property Management and Lettings” in a small niche market of “Student Rentals” offering shared housing and flats for University Students and helping long distance landlords with their property investments.
Profit Potential for Your Niche
Many business entrepreneurs have been restricted in their endeavours by thinking about failure before they invest huge amounts of time, energy and money into the niche segment. Usually this thinking results in the outcome of failure! This is a very important consideration for the business owner, it demands a process which is skipped the majority of the time. It is the process of validating your niche market in its entirety. This is a crucial step in the identification of the profit potential for your niche market. Although there is no hard and fast rule that can guarantee you success, nevertheless, there are certain steps that can be followed in order to give your business a promising chance. As well as being positive and focused on success. These steps are briefly mentioned below.
Is there a demand for your product or service?
This involves the calculation of the total number of potential customers that will be purchasing your product. Have the customers in the segment overcome their problems or are they still suffering with them? This information will provide an idea of the amount of people interested in the niche product solution or service that you have to offer.
A lot of surveys have been conducted on various products and people’s taste and preferences. You can take the advice from these surveys in order to analyse your niche’s profit potential. Again, the internet has become one of the most economical commodities in the modern world. The web contains vasts amounts of information on variety of issues and subjects out of which the majority of them can be accessed freely. When typing your niche product keyword in the search box of any popular search engines you can get a fair amount of information and gain an idea of how much profit can be earned for your niche product.
If the niche product is an online product and you will be promoting this on your blog or website, you can check out whether it involves the advertiser’s base keywords in PPC (Pay per Click) with in advertising networks. It is known that Yahoo Advertising and Google AdSense are the two most popular PPC programs on the internet. You can make use of the above programs to track down the amount of traffic and the average CPC (cost per click) for your most important keywords within AdWords and AdSense.
Is there any competitor that is already targeting your niche segment?
It is very important in business to know in advance what products are being sold by your rivals. If you come across competitors that are already selling your niche product or service, it is advisable to analyse their business and products more deeply rather than switching your niche product. This strategy involves the SWOT analysis of their product in order to identify the elements that you can improve, enhance or modify. This move will put you ahead of your rivals and would give the customers a good reason to switch to your improved niche product.
Does you niche product have a high lifetime value?
The term “lifetime value” implies the sum of the value of each consumer buying your product as they will want to buy from you on a regular basis. The questions that you need to ask yourself are the following:
- Is it easy for you to transform one-time buyer into regular buyer?
- Any related products beside your main niche product for your customers, can build long-lasting and valuable relationship with them?
It is important to understand, that when you are selling just one product, it is not at all inappropriate to come up with other related niche products, as it is much easy to sell to an existing customer or client than to find a new one.
In my case it was easy to keep the landlord property investors as long term clients with year on year contracts while promoting the rentals to the University students each year and when the students had enjoyed the first year in a property they would often book for a 2nd year to the end of their studies.