Picking a Profitable Niche
Posted on May 28, 2008 - Filed Under affiliate |
When you are an affiliate market, one of the most important decisions you will make early on is what niche you want to take on. One of the first rules of marketing is that you cannot be everything to everyone, or you will soon find that you mean nothing to anyone. So when you take on the task of becoming an affiliate, then you really need to find a way to provide a unique value proposition to your customers or you will find yourself getting blown out of the water with affiliates with bigger budgets and better resources.
You Can Make Money in Any Niche
You really can make money in any niche, the caviat being that in order to do so you need to be willing to take a small, targeted slice out of a sometimes large and competitive pie. Never assume that just because a market is too competitive that you cannot do well in it. Remember, it is competitive because there are people who are actually making money doing it.
The one thing that you must be able to do though, is to target a specific sub-section of your niche and provide a unique value proposition to them that will make them buy from your affiliate site rather than another.
The School of Hard Knocks
There is a proverbial school of hard knocks when it comes to affiliate marketing. Most affiliates come into the game and really want to go where the money is, regardless of their expertise in the field or their past experience. Following an online guru or working in categories that you have no experience with are sure fire ways to fail in affiliate marketing.
The best way to find a niche is to find a particular category of products that you have experience or interest with and then match it up with an online community that is willing to buy. The more specialized the better. Beyond the whole, “doing what you love and following your passion” bit, you must have some experience in your chosen niche because if you don’t then you will never know how to market to your customers.
For example, if you have been married for 30 years and never experienced or even thought about online dating, how could you expect to propose a unique value proposition to a 20 something who is looking for an ideal online dating service?
Qualities of Successful Niches
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Good Selection of Merchants:
In order to survive you will need to have a quality selection of merchants who have the resources to close sales. If you have a merchant with a poor product or that has a poorly designed website, then you can spend a lot of money sending traffic to their site that they will not convert on…leaving you high and dry.
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Clear Advantage for Buying Online:
If it is more beneficial for somebody to buy something in a brick and mortar store than it is to buy online then getting into that niche may not be a good move. Products that require testing it out before you buy it or that require fitting or customizations may not be a good niche to get into. i.e. Shoes, Clothing, automobiles.
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Instant Gratification:
If somebody can purchase online and have instant gratification then it represents a clear advantage to buying online. For example, I can download music, movies, software, etc. online and have instant gratification.
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Only Available Online:
If a product is only available online then it can be very easy to provide a compelling reason for someone to buy through your website.
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Lead and Trial Offers:
If all that a customer has to do for you to get paid is to fill out a form for a free offer or to be contacted later by a sales representative, then conversion rates are higher and you can get paid more.
Characteristics of Bad Niches
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Market Needs are Already Met:
If your unique value proposition is already being fulfilled within the buying community then you will have a hard time breaking in
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Products with high return rates:
Some products like clothes have a very high return rate and you could work really hard for a sale only to watch it get returned because it didn’t fit right, etc.
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Poor Selection of merchants:
see Good Selection of merchants above.
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Low Volume-Low Priced Items:
With any business, you have to watch the numbers to make sure you are turning a profit. If you have a product that does not sell well and does not give you an adequate commission then you will find that you can quickly lose a lot of money. Low volume, High priced products are okay, as well as high volume, low price…but the combination of low price and low volume can kill your business.
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