Two months of niche research, churning through hundreds of niche ideas. Revisiting some, just to make sure I didn’t miss anything important. Or, probably because I forgot I already eliminated it.
Two months mining for e-commerce gold. And I think I might have found it.
Not just a niche to go after, but a framework that I can come back to again and again if I fall down in a pile of shit and have to start over.
Here is the framework I developed, using a mish-mash of techniques (I stole/borrowed) from others way smarter than me.
Step 1: Get Market Samurai
It’s only $97. ”Only,” because it saved me a shit ton of time, consolidating everything I needed to do research, analyze, and evaluate niche ideas.
Had I not used it, I might still be looking.
Oh, and the $97 is a one time payment. For life.
There’s another thing like it called Long Tail Pro. I tried it. It seems useful for researching keywords, but not for digging deep into the numbers for competition. It’s about the same price, but if you want the ultra-premium-deluxe-super-duper version, it’ll be $97 plus an extra $17 every month.
Step 2: The Idea Machine
You’re gonna need lots of ideas. Because you need to churn through a lot of crap to find the diamond.
And even if you find what you think is a diamond, it may turn out to be another turd when you shine the light of critique on it.
But you need lots of ideas, all the time.
Here’s some tips:
- Write down 10 ideas a day, like James Altucher preaches. Every. Single. Day. Don’t skip a day.
- Go shopping, and write down things you think of. Sometimes things that seem to big may turn up smaller nuggets to pursue.
- Read Sky Mall. It’s filled with lots of goofy things. I could write a novel from the ideas I’ve come up just reading this on a two hour flight.
- Ask your stupid friends. Expect stupid answers.
- Stop thinking and do some push ups, or play with a baby, or walk a dog, or go get drunk.
- Don’t do that last thing. Ever.
I used Evernote to track my ideas. I still have the note with about 50 unexplored niche ideas. And I’m still adding to it, just in case what I picked turns into shit.
Step 3: Learn How To Use Market Samurai
It ain’t that hard. Don’t be lazy.
Step 4: Iterate For Gold
Iterate means “go through a collection of things one by one applying the same rules/process/function/whatever.”
Was that condescending?
So, when you bang in your niche idea into Market Samurai, follow this process.
Actually, before you enter in your niche idea, it might be a good idea to broaden it and let MS (short for Market Samurai from now on) do the work for you.
For example, if you’re idea is waterproof backpacks, broaden it up a bit to both backpacks and waterproof and see what you get.
THEN, follow this process:
- Generate keyword ideas.
- Analyze keywords, paying attention to SEOT, which is the amount of traffic you can expect to get if you ranked #1 for the keyword. You can also look at total search to see raw numbers of daily searches.
- Ignore everything else at this stage, on the Keyword Research page. It’s useless for our purpose.
- Oh, and make sure the match type is set to Exact. It’s probably moot since Google changed their keyword tool to only return exact matches.
- Back to the SEOT numbers. Look for SEOT values > 100, but less than 300. AS A GENERAL GUIDELINE. Don’t be afraid to go beyond these boundaries if you see something you like.
- Look for related keywords. For example, green girls backpacks and girls backpacks in green are good ones to look at.
- Click the little key icon next to each one to open them up in a new window.
- As a general rule, look for a keyword or collection of related keywords that get more than 10k searches per month.
- Really, ignore all the other fields, except SEOT and Total Daily Searches. In the next step, we’re going to analyze the competitiveness of each keyword you selected.
- As a bonus, you can bang the keywords into Google’s Keyword Tool to validate the MS numbers are accurate, and to get a better idea of how much search volume you can expect per month from Google, because Google is inter web god.
- Also, as a super-duper bonus, open up Google Trends and bang in each keyword. It will show you which countries are doing the most searching and also give you some other related keywords to work with.
Step 5: Analyze The Keywords
Using your deft mouse skills, click on one of the tabs for a keyword you popped open earlier. You did do that, right?
We’re going to be specifically interested in the following columns, in order of importance:
- Page Rank (PR) – this is Google’s ultra secret formula for determine a specific page’s value. We’re looking for almost all green in the area, 2 or less. A couple of 3s or even 4s aren’t a show stopper, but I’d say more than 3 is a no deal.
- Referring Domains – Page (RDP) – this is how many back links this specific page has accumulated. You want yellow and green here, with it being mostly green. If there’s red, especially for the higher ranked pages or pages with a high PR, then you’re going to have your work cut out for you competing.
- Title, URL, Desc, Head – These “Yes” or “No” columns will tell you if the page is optimized for the keyword you’re looking at. All red means yes, it’s targeted. All green means no, they just happen to be ranking for that keyword because Google says so (and NO ONE should EVER question Google). More green = good. But even if there’s a lot of red, it’s not a show stopper. It just means those pages need more examination.
- Citation and Trust Flow (CF and TF) – this is MS’s own determination of how hard it will be to beat a specific page in the ranking game. You don’t need to worry too much about these guys, but if there’s a lot of red in these two columns, it might be a bad sign.
- Page Rank (PR) doesn’t correlate to ranking position. A page could have a PR of 5 or higher and wind up on the third page. PR simple means that Google thinks this the quality of this page is good-strong. I think. It’s important, but not for ranking purposes. But if a page has a high PR AND is ranked high, then it’s doing a lot of things right and is going to be harder to beat.
- I kick around the term “beat,” but really, cracking the top 10 is all we’re looking for. You may not be able to hit the top 5 for example, you see nothing but red there, but the other 5 are 100% green. Which either means there’s room for another competitor (that means YOU). Or, it means this niche is completely saturated. It’ll be up to you to decide if you have the big boy balls to find out.
Did you find a keyword that has promise?
Great, move on to step 6.
Ok, go back to step 4 with another idea.
Out of ideas?
No problem, go back to step 2. No one said this was going to be easy. If it was easy, every fat, idiot, drooling slob on the planet would be doing it. And they ain’t because IT’S FUCKING HARD. Suck it up and start over.
Step 6: Back Of The Napkin
By now, you should have one to three to five keywords that look promising. Low competition, decent search volume, etc.
Go to Google’s Keyword Tool then break out a calculator.
We’re about to make some general assumptions, pulling numbers out of our butts on occasion. The point of this exercise is NOT to make an accurate assessment of a niche’s profitability, but to give ourselves a confidence marker. Which should answer the question, “is this niche one worth pursuing from a purely monetary standpoint?”
It also gives us a framework to play around with, adjusting the numbers here and there, and substituting actual measured, REAL numbers as we discover them.
Sales Volume = Monthly Search Volume * Click Through Rate * Conversion Rate
Gross Revenue = Sales Volume * Average Sale Amount
Net Profit = Gross Revenue * Cost of Goods (Margin)
Sales Volume is the number of sales we can expect to make given what Google tells us about the total monthly search volume for our keywords, how much of that total traffic you can actually direct to your site, and how many of those will buy something.
Click Through Rate is the percentage of searches (people) that will actually visit your site. This is a number that we can make fairly accurate guess at. If you’re just starting out and having to rely on paid traffic (a totally different topic), then your CTR is going to be shitty. Around 3% at best. If you’re ranking in the top 10 of Google, then you can expect anywhere from 5% to 35%, depending on where you fall. I tend to lean towards the low side, especially in the beginning, because it will tell me just how crappy things are going to be starting out. Which will in turn affect how much I really want to fight through those early phases. If you’re thinking long term and expecting to rank in the top 5 (and you should), then bang in 10% to 35% and see what you get.
Conversion Rate is the percentage of people who actually visit your site that will buy something. Keep this number low, no more than 3%. Most of the people that visit your site aren’t going to buy shit. They’re going to turn their nose up and go buy from someone else, or throw the computer into a river and join a cult that doesn’t believe in electronics. That’s the name of the game. This number will probably go up as you get better and build a name for yourself. But in the beginning, and for a while after, it’s going to be really shitty. 3% is actually optimistic.
Average Sale Amount is how much you think each person that buys something will spend. You can invest some time doing some research here if you know exactly what you want to sell. If not, then I’d shoot for $50 to $200. As you go along in the process, this number will become clearer and you can come back and plug it in to see if you want to continue. It’s OK to have orders less than $50, but you don’t want that to be the norm, especially if you’re working with small margins (coming up). Because that means you have to make more sales to make money. And in the beginning, you probably ain’t gonna be making many sales.
Cost of Goods (Margin) is the percentage of Average Sale Amount that your products cost you to buy or make. For example, you have a widget that you’re selling for $100. You bought it from a wholesaler for $50. 50 divided by 100 is 50%. So that’s your Margin. This is one of those numbers you’re pulling out of your butt right now. You can contact wholesalers and get a better estimate if you like, but if you’re not sure what you’re going to be selling yet, then keep this number above 50%.
How do you feel about that Net Profit number?
Either change the numbers or go back to step 4.
Go to step 7.
Step 7: Go Or No Go
Meditate on these questions for a day or two while doing some research into what you actually want to sell:
- Do you think you have the patience and the tenacity to see it through to the end? In other words, do you fucking like it enough to nurture its growth, to weather the storms, to deal with the frustrations that are sure to arise again and again?
- Can you stand out from what already exists? Go check out those pages in the top 10 for each keyword you’ve analyzed. What are they doing? Can you do it better, cheaper, faster, different? Do you think you can be appealing?
- Are you focused on the long term? Setting up a site and having products ready to ship is only the first step. There’s a billion others after. It’s going to take time to rank in Google. Maybe a long time, like a few years, depending on the competitiveness. You ready to make that kind of investment? If not, drift on over to fantasy land.
It’s important to MAKE A FUCKING DECISION.
Go forward with this or throw it in the trash and start again.
Let’s say you start moving on to finding products to sell, setting up your website, figuring out your marketing angle, etc. Then you run into a snag. Something like, the products you want to sell are made by sweat shop workers in some remote corner of the world and you’re totally opposed to that sort of shit. And that’s the only manufacturer.
You’re faced with a choice. Try and manufacture the damn things yourself, or scrap it and find another idea. No big deal either way. If you scrap it, you can come back to this framework and feel confident you’ll find another thing to pursue.
But regardless of what troubles you think you may run in to, you have to MAKE A FUCKING DECISION.
Don’t over think or get bogged down in endless research.
Do take your time, but only enough to get a feel for what you’re about to attempt.
Ultimately, you have to start. If you can’t start, then you can’t finish. And if you can’t finish, might as well put your head back down and march along with the rest of the cattle.
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