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| A "Magic Formula" To Tell If Your Niche Business Idea Will Snowball Profits or Bomb |
A "Magic Formula" To Tell If Your Niche Business Idea Will Snowball Profits or Bomb
"NICHE!" It's all the craze right now online. There's a small fortune to be made by selling niche products online to tightly targeted niche markets – from information products to software to hard goods.
But many 'wanna-be' Internet business people waste their time, effort and money pursuing ideas that were doomed from the beginning because they were trying to
fish in a pond with no fish!
Do you want to know exactly how successful internet marketers assess the potential profitability of a niche business idea even before they create a product?
Then, read this…
STEP #1: Select the keyword phrase that best describes your proposed product area. The easiest way to do this is to ask yourself, "What would I type into a search engine if I was looking for the information contained in my eBook"
For example, if you wanted to write a book about "How to Stop Smoking", the phrase that best describes this area is: `stop smoking'
STEP #2: Calculate your Market Demand (MD)
Don't worry, this isn't as complex as it sounds! All you have to do is go to the Overture search term suggestion tool at:
http://inventory.overture.com/
Type your search term into the Search Term Suggestion Tool and click the arrow. The numbers that come back show how many times this search term and related terms were entered by internet users in a single month.
For example when I typed in `stop smoking', it shows that 49363 people searched for the words stop smoking in a single month. (Searches done in Jan, 2005)
Add up the Count numbers for all your 'related' Search Terms. (For example.. stop smoking, quit smoking, etc. This gives you your Market Demand (MD)
When I added up the Count values for all the related Search Terms I got a Market Demand Of 167,078. So for `stop smoking' MD = 167,078
STEP #3: Calculate your Visitor Profit Potential (VPP)
This is really easy as well. All you need to do is go to Overture's View Bids Tool at:
http://uv.bidtool.overture.com/d/search/tools/bidtool
and enter your search term. When the results come back, View Advertiser's Max Bids. Take the number 3 bid as your VPP.
For example: When I entered the term `Stop Smoking' into Overture and viewed the advertiser's max bids, the third highest bid was $1.56
So for `Stop Smoking' VPP = $1.56
STEP #4: Plug your numbers into 'The Magic Formula!'
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Potential Monthly Profit = (MD x 1.5/100 x VPP)
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[The reason we multiply the MD by 1.5% is because as a rule of thumb, it is possible to attract at least 1.5% of most markets to your website.
The Visitor Profit Potential (VPP) is based on the idea that the value of the third advertiser bid in Overture is an indication of the profit per lead as set by the market.]
So, for `stop smoking'...
Potential Monthly Profit = (167078 * 1.5/100 * $1.56)= $3909.62
Result? -> http://yseh.com/stop-smoking
Now, $3909.62 a month is nothing to sneeze about. It certainly makes a comfortable living. But if you stillinsist... go create 5 such mini-sites and you'll have five streams of solid income!
Simple but Profound -- Isn't it?
This formula gives a good estimation of the profit potential of different markets.
Want more examples?
Let's say that you had two ideas for potential new ebooks:
(1) Porsche restoration (2) Digital photography
If you didn't know better you might just go with the idea that you are most interested in. This is like selecting a pond to fish at because it is your favorite place to sit rather than because it is the best place to catch fish.
OK, let's put the magic formula to test
eBook Idea #1 - "Porsche restoration"
Market Demand (MD) - "653"
Visitor Profit Potential (VPP) - "$0.07"
Potential Monthly Profit - "$0.69"
eBook Idea #2 - "Digital photography"
Market Demand (MD) - "170234"
Visitor Profit Potential (VPP) - "$0.89"
Potential Monthly Profit - "$2272"
So according to the Magic Formula, it would be a waste of time effort and money writing a book about Porsche Restoration.
Of these two areas, digital photography appears to be the most profitable...
You don't have to know why the magic formula works. All you really need to know is that it is a very valuable tool used by some of the leading Internet marketers to find hot markets and have profits snowballing EVEN before they create any product!
Now that you know the 'Magic Formula', go funnel your *million dollar ideas* into it and see if it will snowball profits or bombs fast and hard! ;-)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dr.Prashanth "quietly" earns a decent living from his
tiny little niche websites. Visit his niche resource
site at -> http://yseh.com/resources.htm for a FREE
Report that shows how to create and sell niche info-
products, without you having to write a single word!
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