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:

Look at magazine racks. This is an often overlooked, yet extremely simple way to find niches that people are interested in. 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. People generally talk about things they are interested in. And that may also mean they're willing to pay money to learn more about it.

Don't forget about clubs and organizations. If there are enough people to to build a club, there are certainly enough people to start a membership site on the same 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.

Think about the things that you are interested in. If you're interested in something, it's highly likely others are, too. Making money is fun and it's even more fun if you can do it in a niche you're excited about.

Another fantastic way to discover what people are interest in is Google Trends. Google Trends tells you the most popular current search terms. These topics are the hottest topics because lots and lots of people want information about them. These are the niches you want to be in - lots of people actively searching means lots of opportunity.

Second - Analyze the "commerciality"

OK, so you've got a great idea for your niche membership business with lots of fanatics. But will they actually spend money? 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 means there is a large group of people already assembled for you to market to.

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.

Look at Google Adwords for the same ads are running over time. If people are running the same ad over time it means they are making money in the niche. They would not continue to spend money on the ads if there were not making a return from them.

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's how to make this determination:

Figure out what kinds of products people are interested in. If it's mostly physical products, coaching and live seminars, then it will be harder to break into this niche. 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 market, so figure out how many people are already selling in this niche.

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.

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

In Summary

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. 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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