Let’s talk about niche selection. This is very important to ensuring the profitability of your membership website.

Step 1 - Find a Fanatical Market

The first step in developing a profitable membership business is to find a market with fanatics in it. Fanatic is defined as someone with an irrational enthusiasm. These are the people you’re looking for because they are so enthusiastic they’re willing to spend money on their topic of fanaticism. Now that we know what we’re looking for, let’s talk about how to find them…

• Here’s something you may not have considered - magazines! We’re so internet-based these days, it’s easy to forget about them. In today’s economy, running a magazine is tougher than ever - some of the best ones are going out of business. So if it’s on the shelves, it’s making money, which means there is a big market interested in this topic. That doesn’t mean definitely that it will make a good membership business, but it’s a good starting point.
• Pay attention throughout the day in your regular activities. See what people are talking about on the radio, TV, at parties, in public, etc. People generally talk about things they are interested in. And this means there may be a market for information about it.
• Again, looking in the physical world for clues you can tell there are lots of people interested in something if there are clubs and organizations around the topic. Conventions are expensive to hold and attend, so if one if going on that’s another strong indication of a good niche to go into with your membership website.
• And of course there are all the things you have an interest in, too! If you’re interested in something, it’s highly likely others are, too. The icing on the cake here is that you get to build a business doing something you love.
• 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. The reason people are searching Google for info on these topics is because they are interested. And the fact that it’s made it into Google Trends tells you LOTS of people are interested. Building a membership business around things people are actively searching for is a great way to ensure your success.

Second - Analyze the “commerciality”

Once you found a potential niche or topic to center your membership site around, you need to figure out if you can actually make any money in it. An easy way to determine this is to figure out if anyone else is making money in this niche.

Here’s how to determine if you can make money in your chosen niche

• Find out if there are blogs or forums related to it. Just search Google for “YourNiche blog” & “YourNiche forum” and see what comes up. This tells you there are people who are actively interested in your niche.
• Search Amazon, Google shopping and eBay to see if people are creating and selling products in the niche. It’s a good sign if there are because it tells you people are making money here.
• 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.

Step 3 - Determine ease of entry

Once you’ve found a niche and figured out that there is money to be made in, you need to determine if you can break into this niche. How do you gauge the ease of entry?

• Look at the product types in this niche. You want to find a niche where information products are being sold as the norm. The easiest membership website to create and maintain are information membership sites.
• The next thing to look at is the competition. You don’t want to try to break into a saturated marketing, so figure out how many people are already selling in this niche.
• Unless the market is just so big that it doesn’t matter how many competitors there are, you want to limit the competition. So evaluate the size vs. the competition.
• 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.

Putting it all together

At this point you’ve figured out what niche you’re going into. You found your fanatics, you know they spend money and you’re confident there’s room in the market for you. Now that you’ve prepared properly, you’re success is 99% guaranteed. How to actually run your membership website is the only thing left to talk about…

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