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. Simply put, a fanatic is someone who’s willing to spend time and more importantly money on a topic they are interested in. 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. 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. 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. If people are talking about it, they are interested in it. 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.
• What about your interests and hobbies? There’s a good chance that others are interested in these things, as well. The icing on the cake here is that you get to build a business doing something you love.
• Another fantastic way to discover what people are interest in is Google Trends. Google Trends tells you the most popular current 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. Hot topics that people are excited about make great niches for your membership website.

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. One way to figure this out is to see if other are making money in it.

Here’s a punch list for figuring out if anyone’s making money in your 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.
• See if other people are creating and selling product in this niche by searching in Google Shopping, ebay and Amazon. If other people are creating and selling products in this niche, it means there is money to be made.
• Monitor Google Adwords to determine if people are running the same ads for weeks in a row. If they are, this means they’re making money on these ads – otherwise, they’d stop running them. Which means there is money to be made in your niche.

Last, but not least… How hard will it be to break into this niche?

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. 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.
• 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? Depending on the market it can be anywhere from a couple minutes to a many months between when someone starts the investigation process to when they actually make a purchase.

Putting it all together

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…