Internet Business In A Nutshell Part 2: Market Research
So you think you might want to start some sort of Internet business. Whether you want to start out as an affiliate selling other people’s products or you’d like to jump right into selling your own products online (or both), one of the first things you should do is some serious market research to find out where to focus your efforts. Today I’ll be briefly going over a few ways to do figure out what market is right for you and then how to find out what sorts of things people in that market want to buy from you.
If you’ve been reading about online business, Internet marketing or affiliate marketing for any length of time you’ve probably heard that brilliant sounding over-simplification, “Find a hot target market. Then find out what they want to buy. Then sell it to them.” Well, that’s true enough, but hardly tells you anything useful about actually doing it. First, let’s start with, “Find a hot target market.”
Method 1 – Keywords
A quick and easy way to get a general idea of the supply and demand and competition for various markets online is to simply find out first how many searches are being performed vs. how much businesses are willing to pay per click for those search terms, or “keywords”.
The simplest way to get a general idea of the demand for anything online is to just type in search terms related to what you’re researching and look at the number of results. It will look something like this “Results 1 - 10 of about 105,000,000 for…your keyword”. It’s not a gauge of how many searches were performed for that term but it shows about how many websites contain information related to your search term, which can give you an idea of how popular something is.
To get the actual search counts per month for any given keyword, you can also use sites like the keyword tool at Digital Point Services, http://www.digitalpoint.com/tools/suggestion/?keywords , or the old Overture Keyword Suggestion Tool which still seems to be online, http://inventory.overture.com/d/searchinventory/suggestion/ , or the new free Wordtracker suggestion tool at http://freekeywords.wordtracker.com/ .
By the way, I use the paid Wordtracker yearly subscription and I love the service. They make keyword research a joy.
Next, to see how much people are paying per click for your keywords, you’ll need to sign up for a Yahoo Search Marketing account and use their bids analyzer tool. Using that, you can see the bids per click that the guys in the top search results are paying for your keywords. This will give you a general idea of how much merchants in that market are willing to pay, and so earning, from that market or niche. It can also give you some insight into exactly who may be your future competition, if you decide to pursue that market.
Here are some extra links to helpful keyword research tools:
A keyword Map of the Internet:
http://www.kwmap.com/
Google’s External Keyword Tool (No Adwords Account Required)
https://adwords.google.com/select/KeywordToolExternal
Webmaster Toolkit
http://www.webmaster-toolkit.com/keyword-research-tool.shtml
Shopping.com Top Searches
http://www.shopping.com/top_searches
Method 2 – Stats and Data
To get a more in-depth look at what is going on in a particular industry or market you can use sites like the U.S. Securities and Exchange Commission, http://sec.gov/ to find out how much money public companies are making in each industry among other useful things. For information about private businesses, there are services like Hoover’s Online, http://www.hoovers.com/free/ , or Forrester Research, http://www.forrester.com that compile industry and marketing data on just about everything under the sun. Those services offer some pretty cool free tools and newsletters. However, most of their services can be on the expensive side, so you’ll probably want to start out with sites like Yahoo Finance, http://biz.yahoo.com/ic/ and Web Marketing Today, http://www.wilsonweb.com/research/ , that are free and also incredibly in-depth.
I realize that I called this a separate method, but you’ll still usually want to do the keyword research mentioned in the first method also, after you get your target market nailed down.
Method 3 – The “Average Joe” Approach
This last method of doing market research and finding your target market is slower, but a lot easier than the above two methods and can actually be more effective and economical in the long run. You simply take a close look at your own interests and hobbies and skills, or even just things that you would like to learn more about… be sure to write it all down and make a list… then pick one or even a handful of things you’d like to pursue that you think have the possibility of making money (some keyword and regular market research can help here) and then simply join online groups for whatever it is. You can do a search on, for instance “Your Keyword + forums” to find online forums related to your prospective market. You can also do the same search for blogs or groups.
A good place to start is Google Groups, http://groups.google.com . Just sign up to any groups that pertain to the market you’d like to get into and become an active member. It won’t take long until you have a good idea what that target market’s likes and dislikes may be and also what they’d want to buy if you were selling it.
This last approach, unlike the other two, seamlessly leads into the second part of the above phrase, “Find out what they want to buy” without doing anything else. In fact, after you apply either keyword or general market research, it’s not a bad idea to also apply this final method and get to know your target market personally.
Once you get a feel for your target market you can either, A: proceed full steam into either becoming an affiliate or creating products for that market, (or both), or B: You can step back and try another idea if you find out your initial choice of markets don’t look that promising after all. Either way, you save yourself lots of time and money by doing your research, whether it’s keyword research, more traditional market research, or just my “regular guy” approach, before you do anything else. (Tip: Save yourself even further time and money by never stopping your market research.).
“And what about the final step?”, you ask, “Sell it to them… How do I do that?”
Well that’s a huge topic and it will have to be broken up into several parts. Stay tuned for part 3 of this series where I’ll be showing you how to become a profitable affiliate and part 4 where I show you how and where to create your products, or have them created, for your chosen target market.
