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 number 1 thing you have to do is find fanatics if you want a profitable membership website. Simply put, a fanatic is someone who’s willing to spend time and more importantly money on a topic they are interested in. OK, so we know what a fanatic is, but how do we find them?

• One simple idea that’s easily forgotten is to scan the magazine racks when you’re out and about. It’s becoming increasingly difficult to run a print magazine. So if you see one on the shelves you know they are making money, which means that there are enough people interested in what they’re saying to make it profitable. If they can make money in a print version, you can probably make money with a membership website.
• 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. Which means you can start a membership business providing information on 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. 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. There’s a good chance that others are interested in these things, as well. 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 are the things people are actively searching for in Google. They’re searching because they want information. These are the niches you want to be in – lots of people actively searching means lots of opportunity.

Step 2 – Determine the financial feasibility

After selecting a possible niche to build your membership site around, the next step is to find out if it’s a profitable niche to be in. An easy way to determine this is to figure out if anyone else is making money in this niche.

OK, how do we figure that out?

• 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 lets you know there is a market (a group of people actively interested in the niche.)
• Check Amazon, eBay and Google Shopping to find out if others are making and selling products in your niche. 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.

Step 3 – Determine ease of entry

After figuring out a good niche and determining that other people are making money in it, the last thing to do is decide if you will be able to enter the market. 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. Membership websites based on information are the easiest to start and maintain.
• 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 ready is the market for marketing messages, and how willing are the fanatics to buy. Every market is different. Sometimes people are looking for information and are ready to pay for it right now. And sometimes it takes weeks, months or even years for them to make the decision to purchase.

In Summary

So far, we’ve talked about exactly what it takes to pick a great niche: One with a hungry crowd of fanatics, who are ready to spend money on information about their topic. And you’ve determined your barrier to entry is small enough to give it a go. If you’ve followed along with these steps you’re success in practically guaranteed. The only thing left to cover is exactly how to run your membership business…