Analysis of the niche — why it is needed
If you plan to become involved in a commercial project that will yield income in the future, you must decide whether it is worth working on and, if so, how to improve the initial concept, what is needed and why.
To fully appreciate whether the chosen project will be successful, you first need to understand the risks and the terms you are about to accept, and work up a realistic budget.
If you have a small budget (up to $1,000), it makes no sense to plan a big project. You should always be aware of the volume of your resources. When determining how to use your budget, you should include not only the costs of development, marketing and so on, but also your time. Your time is limited and has a monetary value.
With a budget ranging from $1,000 to $10,000 you will have several options:
- Buy an already established project in a specific niche and continue to develop it;
- Create a project from scratch;
- Buy publications on third-party resources and try to convert it.
If you have a budget of more than $10,000, the approach to analysis and planning is, naturally, altogether more serious. And those with a budget of $100,000 or more, should, from the outset, aim to be a leading force in the chosen niche.
Estimated cost of creating a project
The cost of creation will include:
- External links;
The budgets in different niches are not distributed equally. The choice of a niche depends not only on the overall budget, but also on what proportion of the budget will go to a particular area of expenditure. To understand how to manage finance, examine the main indicators of your competitors.
- Publications on third-party resources;
- Traffic from advertising networks;
- Generating sales from social networks and instant messengers;
- Channel on YouTube;
- And others.
Level of niche development
The level of development is divided into two groups:
- Many old projects;
- The niche just being formed.
The first group include gambling, essays, and some others. These are the areas on which most webmasters are currently working.
However, there are also new commercial avenues that are only now being established. These include crypto-currencies, tickets for buses, or selling tours online. An advantage of these is that they are new, fast-growing markets, and competition is relatively low.
New markets are usually more interesting as conversion rates are higher, and less time is required to run the project.
Analyze the leading operators in the niche. By studying them, you will come to understand what can be achieved. While working on your calculations and plans, consider the fact that the existing leaders will continue to progress and reach new levels as you develop your project.
To be able to earn it would be better if in your budget you allowed for a contingency fund you can use in case of market changes.
You will find the tools, listed below, useful when conducting your analysis:
- Similarweb.com — to research traffic channels and their structure;
- Semrush.com — to ascertain visibility in Google and volume of traffic;
- Megaindex.com — to look for external links.
Megaindex.com will also help you understand more about the structure of your competitors’ projects, and will allow you to ‘spy’ on their ideas. For example, look at the pages and search queries your competitor promotes and move in the same direction, or take up unoccupied keywords.
All these tools will help you to understand potential traffic and potential costs. The content itself, and approximate earnings, can be estimated according to your competitors’ projects. For the latter, you need to have good knowledge of the niche. If you have no knowledge, you can still use outreach methods which will allow you to better understand potentialities, and finally decide about bigger investments.
Get your investment’s worth and make profit
Recouping your investments to the project in a new niche should take less than a year using the affiliate marketing model (payment for sales) — this is a very rare situation.
If a niche is absolutely new to you, you may have to spend even more time working on it. This is another strong argument for spending time analyzing the niche and planning what resources you are willing commit.
Working in popular niches — gambling, dating, work, etc., has two serious disadvantages — you have to create relatively expensive projects, and you will have to struggle with a lot of webmasters, rather than a few, in new, unpopular, or young, niches. New niches provide an opportunity to start with lower costs, and secure lucrative conversion rates and revenue.