Imagine the whole world was your marketplace, what particular product or service can you offer to its 8 billion inhabitants? You might consider the 3 basic needs – food, clothing and shelter, but do you have the capacity to service everyone? Questions like these help you see the futility of creating products for every market, rather than choosing to service a particular market segment.
Every product or service that meets a need can be profitable. Every business with clearly defined vision, goal and strategy, and that’s able to carry out its plans to fruition will be profitable. However, you can only succeed in a handful of businesses if you want to dominate the markets you are involved in. This calls for wise choices in both market segment and products/services to offer.
In this article I’ll present valuable information intended to guide, inform, and educate you in choosing a profitable niche to service for your online business.
What is a Niche?
A niche is a particular segment of the market characterized by high market demand, low competition, and high income potentials. A niche market is small enough to efficiently service, and big enough to sustain your business in terms of revenues and profit. This approach is very essential for those who are starting a new business, or expanding an existing business into new markets.
Doing business through niche markets trigger you to consider the most important prerequisite to starting a business, which is having a market to produce for. Until you are sure that a market exists for your product or service, whatever business activities you carry out will be built on speculation. It is like groping in the dark, and expecting to win a race against those who can see where they are going. Victory is almost impossible.
So, the order in starting an online business is, first a market and second a product or service. If this is still vague to you, the rest of the write-up will make it clearer to you.
Things to Consider Before Choosing a Niche for Your Online Business
Choosing the right niche for your online business is extremely important. Here are some tips to help you determine a profitable niche for your business.
1. Research – This is a recurring decimal in every project, be it business, not-for-profit, or government-owned. The goal of your research is to find out what people are buying, what products and services are frequently being searched for, if there is a market for these findings.
For results on online searches, tools like Google Trends help to find and analyze market demand and trends for any niche you may be considering. Using the appropriate keywords for your proposed niche market, find how many searches are being made. This tool will also help you find out other information relative to your niche. There are other online tools that can help with analyzing activities around particular niches.
Each market niche can be further subdivided into smaller niches, and further down the line. Your niche must exhibit the characteristics highlighted above – high market demand, low competition, and high income potentials.
2. Unique Selling Proposition (USP) – No matter how small a niche is, chances are that there are other players in the market. For an effective market entry, you will need unique, specialized abilities and capabilities to stand you out from the crowd. In business parlance this is also called “competitive edge”.
If you cannot clearly articulate your competitive edge on paper, it means you do not have one. If you do not have any, your business will be lost in the crowd. More like a needle inside a haystack!
Develop the right capabilities for your market. In cases where it isn’t feasible to acquire these capabilities, you can partner with individuals or organizations who own them. Market insights, distribution network, specialized skills, collaborative skills, SEO, digital marketing etc are examples of capabilities that may be critical to your business success.
3. Skills – Even though skills are mentioned under USP, its importance cannot be overemphasized. Skills are specialized capabilities belonging to an individual or organization for the purpose of solving problems. There are some vital skills needed to make your online business thrive. They are:
- SEO skills
- Digital marketing skills
- Content creation
- Product design and development
- Research
Your skill level will set you apart, and determine how much you can get out of the pie.
If any of the above skills are lacking in your business, train for it, engage people who have them, or partner with those who possess such skills.
4. Passion – The road to success is usually uphill, requiring dedication and persistence. Passion for your product or service, passion for the market you’re servicing, and the passion to see your clients enjoy your offering.
There is so much work to be done in a niche market. Like you, your competitors had to develop competitive advantage before diving in. You must remain passionate about what you are doing. Look beyond the financial benefit. It could take several years before your business becomes profitable, but your ability to stick to it through thick and thin will guarantee that you will be there when profits start rolling in.
5. Available Funds – Availability of funds will determine the markets and scope of your operations. In the next section we will highlight profitable niches that you can venture into. This will give you an opportunity to appraise your present financial status, and prepare yourself.
6. Build Around Existing Offline Business – You have been successful running an offline business before now. You can bring your experience and resources to bear for this online business. It’s easier to set up an online business to serve as an extension or expansion of the present business, than starting a fresh business. You already have clients who can be introduced to the new venture.
The tips are in no way exhaustive, so you can learn along the way as your business matures.
8 Most Profitable Niches for Online Business
1. Personal Finance – This is arguably the hottest topic out there on the internet. Finance has always been an important part of our daily living, and will remain so. Blogging about finance is a great way to inform and educate people on how to manage their money, grow their investments, maintain financial discipline etc. Being a finance expert rightly positions you to meet needs in the niche.
You can produce financial products, tools, games, and resources to help your audience improve their finances. Even if you’re not an expert in this field, you could still blog on everyday use of money. This niche covers areas like savings, investing, forex, stocks, bonds, debts and cryptocurrency.
2. Fitness and Weight Loss – The fitness industry has been steadily growing over the past 10 years, and presently worth over $10 billion. People are becoming more conscious about trimming excess body weight and belly fat. Nutrition and dieting is taken more seriously, and businesses that are able to provide the right information and products for this market will always be profitable.
Case studies are effective in communicating the right message to this market. Other tools and products include weight loss programs, supplements, exercise programs etc. The market is constantly growing, yet with still lots of opportunities for new entrants. This niche is further subdivided into weight loss, keto diet, yoga, nutrition, hair loss etc.
3. Personal Development – A market worth about $9.9 billion in 2016, the United States personal development market has witnessed a yearly average growth of 5.6% since then. Forecasted to hit a market worth of $13.2 billion by 2022, it clearly shows the signs of a big market.
Building a blog in this niche is almost impossible if you aren’t personally involved. Life coaches, personal trainers, motivational speakers, can provide value in this market. Providing informative and educative materials to help your readers improve their habits and psychology will help build your brand. The journey may seem slow and painful, but the key to success in this niche is consistency and continuity.
Products include courses, programs, videos, online training and coaching. Tony Robbins is a big player in this niche, and has been consistent in it for decades. Under this niche we have self help/development, personality improvement, character building, career building etc.
4. Gadgets and Technology – People love gadgets, especially the latest ones. Mobile phones, tablets, laptops, printers, software, are some of the popular searches online. People want news and information on new releases, updates, tweaks, troubleshooting, upgrading and a whole lot about their devices.
Bloggers have a field day providing information to their readers, where they provide reviews, tutorials, information products, and others. From the surface this niche may seem crowded, but there’s room for one more business that brings real value to the table. Bloggers earn mainly from Affiliate marketing where products belonging to different merchants are sold from their blogs. Commissions are earned for every successful sale.
Gadgets can be sold online through Amazon, Alibaba or other popular online marketplaces. Computer programming, gadgets, Mobile accessories, Apple gadgets, Operating Systems are some subdivisions of gadgets niche.
5. Health – There is this growing awareness about personal health, and people getting more involved in their health and well being. People want to learn more about healthy lifestyles, particularly about alternative health and its practices.
Bloggers can deliver information through well researched and accurate content. There are also opportunities for books, supplements, physical products and information products.
6. Dating and Relationships – Relationships are here to stay. As population increases daily, so is the complex web of relationships getting more complicated. Families, friends, couples, colleagues, all have basis for relationships with each other. The need for advice, information, and products on how to salvage a relationship, improve bonds, manage lifestyles and all.
There is a great opportunity for relationship advisers. Under this niche is dating, advice on handling break ups, divorces, parental or peer pressure. Most products in this niche are provided by well trained experts; however, there is opportunity for sales of these products through affiliate marketing.
7. Make Money Online – This is the most saturated, and by far the most popular niche online. This niche is so broad that you find further subdivisions of subdivisions of it. What’s more? There are new daily entrants into this niche. It’s possible to become an authority in this niche within a reasonably short period of time; you just have to become an expert.
People want to know how they can make money online, and what tools to use. If you have been successful in an online business, with proof to back up your claim, online coaching is a great opportunity for you. How-to guides, information products, courses, eBooks, Audiobooks, and programs are great ways to deliver products in this niche. Bloggers can earn from affiliate marketing, selling products of others.
The niche is so broad and covers subdivisions like affiliate marketing, passive income, work from home, online trading, online jobs, YouTube marketing, blogging tips, social media marketing, ecommerce, dropshipping, etc.
8. Beauty Treatments – Most people, especially women want to look younger, have smoother skins, get rid of wrinkles, and stay beautiful all-year round. Beauty products, cosmetic treatments, creams and formulas are among products in this niche.
Anti-aging cosmetic treatments, skin care products, skin care products and other beauty care products constitute a very huge market with great earning potential. Selling online is a great way to tap into this niche, while bloggers can earn from affiliate marketing of the products.
Summary
It is possible for your online business to become profitable within a relatively short period of time, even earning 6 figures within its first year. The key to this is choosing the right niche for your business. Internet users globally have been on a steady growth, the demographics also changing rapidly as baby boomers get older. With these, more needs and demands have to be met.
One last advice; in whatever niche you decide, aspire to become an expert in it.
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