In order to make sure your membership business is profitable, you have to select the right market. Here's how.

Number 1 - Discover Niches with Fanatics

The number 1 thing you have to do is find fanatics if you want a profitable membership website. Fanatic is defined as someone with an irrational enthusiasm. These are the people you're looking for because they are so enthusiastic they're willing to spend money on their topic of fanaticism. Here's how to find fanatics:

• Look at magazine racks. This is an often overlooked, yet extremely simple way to find niches that people are interested in. In today's economy, running a magazine is tougher than ever - some of the best ones are going out of business. So if it's on the shelves, it's making money, which means there is a big market interested in this topic. That doesn't mean definitely that it will make a good membership business, but it's a good starting point.
• You've got lots of opportunities every day to see what people are interested in. Just pay attention to what people talk about on the radio, at social gatherings, at the store or restaurants and anywhere in public. People generally talk about things they are interested in. And this means there may be a market for information about it.
• Conventions, clubs, and organizations. Once again, if there are enough people interested in a topic to create a club or organization, then there are enough people to build a membership business around it. Likewise, if there are enough people to hold a convention, there are definitely enough people to fill your membership website.
• Think about the things that you are interested in. Chances are that if you like a certain topic or hobby, other people do, too. The icing on the cake here is that you get to build a business doing something you love.
• Google Trends. This is a great way to figure out what people are interested in. Google Trends tells you the most popular current search terms. These topics are the hottest topics because lots and lots of people want information about them. Hot topics that people are excited about make great niches for your membership website.

Second - Analyze the "commerciality"

OK, so you've got a great idea for your niche membership business with lots of fanatics. But will they actually spend money? One way to figure this out is to see if other are making money in it.

Here's a punch list for figuring out if anyone's making money in your niche:

• Find out if there are blogs or forums related to it. Just search Google for "YourNiche blog" & "YourNiche forum" and see what comes up. This means there is a large group of people already assembled for you to market to.
• Search Amazon, Google shopping and eBay to see if people are creating and selling products in the niche. What you're trying to figure out is if anyone is making money in this niche, and if people are selling products it means they are making money.
• Watch Google Adwords for a period of time and look for ads the run again and again. Adwords ads are expensive, so people only run them repeatedly if they are profitable. And to be profitable, they have to be selling products and making money.

Finally - Figure out your barrier to entry

After figuring out a good niche and determining that other people are making money in it, the last thing to do is decide if you will be able to enter the market. Here's how to make this determination:

• Look at the product types in this niche. You want to find a niche where information products are being sold as the norm. The easiest membership website to create and maintain are information membership sites.
• Competition. How many other people are trying to sell to this market? You want to start in a market that's not completely saturated with competitors.
• Unless the market is just so big that it doesn't matter how many competitors there are, you want to limit the competition. So evaluate the size vs. the competition.
• Market readiness. Are people ready to buy? Are the receptive to marketing messages? Depending on the market it can be anywhere from a couple minutes to a many months between when someone starts the investigation process to when they actually make a purchase.

Summing it all up

At this point you've figured out what niche you're going into. You found your fanatics, you know they spend money and you're confident there's room in the market for you. If you've done your homework, your business will be a success because you already know your market is a profitable one with room for you. Learning how to run a membership website is a topic for another article...for additional internet marketing tips and ideas start at the home page of JackFolsgood.com