5 Reasons to Avoid a Niche Market!
Does anyone remember Microsoft Bob? If not, let me fill you in and save your time… It was one of the worst failures Bill Gates paid alot of money to develop! The reason it failed was simple… there was not enough demand in the market, and people just didn’t want it!
If only Microsoft had done their due diligence AHEAD OF TIME, they would have known! Fortunately, we can all learn from their mistake. Your Niche Websites are No Different!
Success Tomorrow Relies on Successful Planning Today!
After running through several RankSpanker reports for others over the past week – one thing I immediately came to recognize from the requested niche markets, is that you MUST properly research your market and the buying habits BEFORE anything else! Then you use the same process to evaluate every segment of your site, that hopes to fill that market!
Let me see if I can put that into straight English… focusing on the ePN program, since that’s where most us like to play! The things below are 5 Reasons I will RUN AWAY from a Niche! Several of you who have requested these RankSpanker Reports are already privy to this info… as I have suggested finding something else, and tried explaining why.
1 – People Just Don’t Buy It Online?
Having the most informative and highest traffic site revolving around “Sleeper Sofas” is great! I mean, you could have the top 2 ranking positions for EVERY term associated with sleeper sofas… but if people are not going online and buying them, what have you really got? Bragging Rights? Try spending that on a Full Tank of Gas!
If People Don’t Buy “Your Niche Here” Online – Don’t build a site about it! If they DO, see how much they spend! In this case, people DO BUY sleeper sofas on eBay- does that mean we should target it?
2 – People Just Don’t Buy “Enough of It” Online?
If you don’t use TeraPeak to research your Niche, you have already lost the battle! TeraPeak tracks ALL metrics associated with eBay, and if you want to know what people are spending in “Your Niche Here”, you need to invest the $24/mo.
In this case – TeraPeak tells me that there was $98,000 in total sales over the past 90 days. Some may think this is great… guess what, its horrible! Assuming you can build a TOP SHELF site, you are likely to spend the first year or two at the 5-10% referral rate at best… As an affiliate, we earn about 2% – 2.5% of the total sales. In this case:
90 Day Metrics
$98,000 X 10% Referral rate = $9800.00 X 2.5% ePN Affiliate Payment = MAX of $245 in affiliate commission if ALL the Stars Align for 90 days! Thats only $81/month! Not gonna happen for me.
If the Niche Market Does NOT Support your own Expectations – Run from it! I walk away from almost every market that does not generate at least $200k worth of 90-day revenue.
3 – It Won’t Fit Into a UPS or USPS Truck!
Many of you are gonna ask about this one and WHY it matters. IF an item has to be shipped by freight truck (Like a sofa or other large items) then the buyer and seller MUST talk BEFORE the sale is completed!
More often than not, these sales are completed OFF of the eBay system and you get no sales commission! I’m talking from direct experience with this… we sold large items on ebay for several years. EVERY item we sold had to be shipped in a truck. When buyers called us, 7 out of 10 asked US if they could save extra money by keeping it out of eBay. 7 out of 10 times, we sold it to them for the cost, minus eBay fees… which are alot on large items!
This also holds true for Cars, Trucks, Boats, any any other item that “The Majority or people” are going to want to see before they buy! I have a few sites in the auto niche and while they DO make sales, they will always lose a certain percentage, probably large, due to the nature of the item.How many of YOU would buy a car without ever seeing it?
So – If it Won’t Fit – Run Away from it!
4 – Low Sell Through Rate
This should be 100% self explainatory. If people have to list 500 items to sell 100 (20% sell rate), stay away from it! If they can’t successfully them in the Worlds Biggest Marketplace, what makes you think you will? I personally walk away from ANY Market with less than a 30% sell through rate, without ANY additional research!
Sleeper Sofa’s are at 23% Sell through rate.
5 – If They Can Call for Free – They Will!
As you progress through your research, you MUST check out the people selling the products you are going to represent! If I told you I would give you $5 for EVERY person you referred to this page to buy my sleeper sofa… and the top of my sleeper sofa page had a statement that said: Call for Color Choices Before Buying – 800-555-1212, How often do you think you would get paid?
Check out several of your seller pages to see how they have to sell the products! In the case of sleeper sofas, almost ALL of the sellers have 800 phone numbers, and explain all kinds of questions away with a simple… “Call Us – Its Free” answer!
All of this is done BEFORE You get into your Site and Product Planning!
Aside from using the TeraPeak system, what other metrics do YOU use, that make you RUN away from a website build?
Excellent advice
thanks very much
Thanks for all that Mark!
I thought I had a good niche but now, due to point 2, maybe not!
I have made too much of the site now to quit it so im going to continue regardless… Hopefully it will make enough to fund a terapeak purchase!
Its not a dire niche, but not quite as good as I had hoped, we live and learn….!
Dave
More great advice from the master!
Thanks so much Mark. I’ve pulled a couple of things off my “future sites” list based on your criteria above.
I know it’s not a metric, but another factor that I use to make decisions about a product is if I know anything about it. I realize that you don’t have to be the expert on a product, but if I’ve purchased and used the product in the past then I feel I can “speak” with a little more authority when I “create” the reviews.
Thanks again for your insights!
Got a question for ya Mark… If you were exploring a niche, lets say “trading cards”. Since there are many types of trading cards, baseball, football etc etc.. and even different years for all the different types, I’m wondering how you would handle something..
If a certain year, or a certain sport had great numbers in terapeak etc etc.. would you build the site for JUST THOSE… OR, would you also have the other “years, sports” etc etc, to give the shopper the “full effect” at your site, even though they may not sell as well as the items YOU know do?
Just curious…
Thanks!
Thanks all! Its really a great way to do some initial research, before you ever get too deep into a niche. Nothing pulls the sails down quicker than ordering 25-50 site articles and finding out the items wont sell, or wont sell enough!
@ Ben – Knowing a niche is a GREAT thing to factor into your choice as well!! As long as the things sell.
@ Jake –
If I knew “Hockey Trading Cards” sold well, that is EXACTLY how to target it! Narrow the niche as much as possible to the exact sport!! I don’t know that I would limit the year of the cards… unless there was a way to identify the search trends on those specific years as well, and pull it all together.
Mark
Hi Mark
This is good advice, I won’t argue but just to air the other side I have a site which is performing well beyond expectation and its for a certain brand of van. Now as you say I wouldn’t buy any van without seeing it and testing it but this site is bringing in £400/month.
I put a bit of warning about buying outside of eBay and losing your buyer protection etc on each page so perhaps that makes a difference.
@Dave –
I can completely concur with the auto niche, having a few of my own that do OK and generate solid income each month.
The main reason for including it, is based off the certain loss that occurs due to the nature of the item and buyer needs. I have actually located cars on eBay and rode out to the sellers place, looked them over and bought them. (Outside of ebay)
Mark
Great article, Mark. I wish I would have had a guide like this to follow a year or so ago when I first started building BANS sites – I wonder what the percentage of new BANS users build car, truck, boat, etc. sites?
I know I did – I don’t think I ever sold a vehicle but did get lots of crazy, unrelated sales from shoppers who clicked through my link and got distracted and bought . . . toenail clippers! (just an example!)
Caro
Great post Mark.
I find once I get a idea and start doing the research I grow attached to the niche. Which is bad.
I haven’t launched one N1WAY site yet just for that reason. It took me two weeks to find the niche I’m going to use.
Another couple days to gather basic content and I’m still gathering content.
IMO it is so very important to be able to dump a idea and move on. Too many times I got ideas and found in the middle of the build that it was even more difficult to build a site that would rank well or required to much content. 4 All of the reason above really.
I resemble these comments! Haha. My second BANS site that I built about a year and a half ago was focused on a specific import brand used car. No one has ever bought a car through it although there has been some smaller purchases a few times.
Thank you to Mark for helping us all understand the RIGHT way to go about choosing good niches. I’ll be taking advantage of the Rankspanker service very shortly!
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