First I come up with some different ideas of product or service areas or hobbies or topics where there may be a need. Sometimes I get ideas from the news or magazines or topics of conversation. The key there is to always be looking and asking the question: "I wonder if there is a niche there?". Then I do some searches on the net in those areas to see what is available. I use the fantastic Google Keyword tools to help me understand just how many people and in which countries are looking for those products or services. The Google Keyword tool can be found at http://www.googlekeywordtool.com. I use these tools everyday and am continually amazed at what you can do with them.
Most often of course I find a market already full so I move onto the next one until I find one where there is a niche that is not too full, where people need something, and where I can add some value to those people. Then I set about supplying something for that niche market. This can take a lot of time and I find is quite an iterative process with a lot of trial and error. I have to browse around quite a lot at times. Often I start looking in one product or service area, and notice an adjacent market that I hadn't thought of where I can put together an offer that satisfies a niche. So I often start down one path but find others along the way that offer me some chance of success.
For instance I am currently marketing great products in areas that I certainly had no intention of marketing originally but I found them, loved them, found a niche and so promote them and feel I am adding value by presenting different markets with products they love but didn't already know about. Of course even if a market is full you can still be successful if your product or service offers something that others don't and if your marketing is better.
To really analyse what looks like a promising niche market I use additional tools to Google and I also have some spreadsheets and processes of my own. There are many commercially available tools out there, just do a search and you will find them. Personally I have found the "BrainStorm It" tool that comes with my Web host to be one of the very best in fact and I have written a previous post on that. To be honest I think just their analysis tools almost pay for the cost of the hosting.
Of the many other tools out there one of the most widely used is of course the legendary Wordtracker. Try Wordtracker for free.
Another source of niche markets are the magazines in bookshops or newsagents or news stands or online. Many people have found profitable niches in hobby areas by noticing that there were a lot of magazines selling on that topic, doing some research and finding a niche within that market. Others find niches by using tools such as Googles trends and insights tools at http://www.google.com/trends or the Google Hot Trends tool http://www.google.com/trends/hottrends and finally the Google Insights tool http://www.google.com/insights/search
Some talk of micro-niches, or long-tail marketing and I have mentioned long tail marketing before in a previous post. It is something that can work on the internet but is harder to make work in the offline world. But for some internet business owners such as myself understanding how to use the Long Tail of the market is crucial to success because we usually cannot compete with the large companies in the mass markets - they will simply outspend us on their campaigns. But not always! Click here to read more about Long Tail Marketing. There is an audio there as well.
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