The Importance of Market Research

Don't underestimate the importance of market research.  It will be the deciding factor of whether you succeed or fail.  Do your research and you will greatly improve your rate of success - and thereby your income. 

There are many reasons why people search the net, and they're not all about buying something.  You have older folk researching health problems and students wanting information for school projects - they're not spending money here.

First find hot SELLERS and only then do your keyword research to find what keywords people are using to find those items.  Otherwise you're shooting in the dark.  Furthermore, this is not enough - you must be able to properly weigh many factors, one against the other so that it reveals whether or not to proceed with a particular project.  The wrong choice will lead you to ruin.

Stay with the pack ...

Market research is an ongoing process because new technologies enter the market, public preferences change, new trends move in and old systems become obsolete.  Move with the times or get left behind.

It’s a good idea to see what’s currently popular.  Ask yourself, are there other similar products or services to what you have in mind, and are they selling well?  It doesn’t matter how good you are at something or passionate about, if there’s no market for it, forget it because no one's buying.

Find out what people are willing to spend money on and then work from there.  It’s not about whether you like or dislike the product, it’s about the likes and dislikes of your potential customers that counts.  So sell what people will buy or what’s already proven itself.

Let eBay work for you

Both eBay and yahoo.com have clearly demonstrated the importance of market research on their sites.  They’ve gone to great expense to find what’s popular and what will sell.  So save yourself hassle and expense.

Take a look at their “Categories” listing (left side of page) and you'll find your research done for you.  Study their categories and sub categories – drill down to find related niches within those markets.  You can be sure that these are currently hot with the public.  Check out their “Hot List” link and you'll see the latest trends and analysis for the products.

This what Internet market research is all about.  You can:

• Identify niches (market segments)
• Determine your competition
• Learn what people are willing to spend money on
• Identify new trends (the Internet is constantly changing)
• Establish the best price for your product.

There is a free e-book available as a bonus with every purchase of Affiliate Marketing Beginner's Guide ($7).  It covers market research in far greater depth, and details many online resources (all free), that show how to pick profitable markets where people spend money.

Market too big?

Your next job is to find out if your market is big enough.  Keyword research will show you how many people are searching for any particular item – the more, the better, but not too much so that the market is so broad you cannot effectively focus on a particular niche.

Now think about how you'll reach your market and how much competition you're up against.  You'll find that the importance of market research also comes into play if you're going to use Pay-Per-Click advertising.  Find out how much the clicks for your market will cost you.  Some are as high as $40 per click so unless the product you’re selling is worth thousands of dollars, your profits will vaporize.

How to choose your products

It's best if your product is consumable – things that people use up and need to buy again such as prescription drugs, health food items, makeup, batteries etc.

The product must be popular and needed, and help solve a problem that the average person experiences.  Products that save time and work will also sell well.  Avoid those that need to be color matched, tried on for size or can be broken during shipping.

High-commission products

Downloadable “How To” guides, software and e-books are also good, and because of their low to nil production costs (and no shipping), they usually offer huge commissions.

The product needs to have a decent profit margin or it won't be worth your while - both financially and time-wise.  It won't help if earnings don't cover the costs of acquiring customers.

Idea triggers

Where to get other ideas?  Keep an eye out for full-page ads in newspapers, magazines as well as major television ad campaigns – you can be sure that if big money is being spent on these, they’re making big profits.

Listen to what the kids say – what’s really ‘cool’ to them.  Visit chat rooms and forums and see what problems people complain about.

You will do well to keep in mind both the importance of market research as well as the following chapters on niche marketing and keyword research if you want to succeed in any market.