In order to make sure your membership business is profitable, you have to select the right market. Here’s how.

Number 1 – Discover Niches with Fanatics

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. Here’s how to find fanatics:

• Here’s something you may not have considered – magazines! We're so internet-based these days, it’s easy to forget about them. Because it’s becoming harder and harder to keep print periodicals profitable these days, if you see a magazine on the shelves, you know it's making money. And that means there are lots of people interested in it. 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 something, they probably want to know more about 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. By the same token, if enough people are interested to hold a convention on a certain topic, you can definitely find enough people to build a membership business around that same topic.
• And of course there are all the things you have an interest in, too! 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.
• One simple and easy way to find out what’s hot is Google Trends. This service shows you the current most popular search terms. These topics are the hottest topics because lots and lots of people want information about them. Hot topics that people are excited about make great niches for your membership website.

Step 2 – Determine the financial feasibility

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. The quickest way to find out is to determine if others are profiting in your potential niche.

Here’s a punch list for figuring out if anyone's making money in your niche:

• 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 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.
• 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. Here are some things to look at to figure this out:

• 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 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.
• Market readiness. Are people ready to buy? Are the receptive to marketing messages? 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.

Putting it all together

OK, now that you’ve figured out what niche you’re going to go into. Determined there is money to be made and that the competition is not too strong to break into it. You’re ready to start your membership business. If you’ve done your homework, your business will be a success because you already know your market is a profitable one with room for you. Learning how to run a membership website is a topic for another article…

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Tags: internet marketing, membership business, membership website, online marketing