Research different industries
If you want to know which niches will be profitable, be ready to devote enough time to industry research. Researching different industries will take more than just having a look at their website’s page rank and traffic generation. You will have to dig a little deeper into their business model and product strengths. Create a list of industries that you think are easy to penetrate and have less competition.
Highly competitive industries present several risks and challenges, despite their ability to rack up huge sales. So be sure you select industries that can generate enough profit and are easy to join. For instance, you cannot make much money from consumer good products if you follow giants like Walmart.
Industries that are exposed to severe competition are usually hard to penetrate. If you jump right in without a proper business plan and a solid budget, you are bound to fail.
Assess competition by having a look at search traffic that comes to these sites through search engines and the number of websites competing in that particular industry. If you find that there are several websites competing in the industry, be ready to make a big investment to beat the competition.
Product/service that is easy to create
Another important yardstick to find a profitable niche is the process of product creation. If the product is hard to create and requires big cash, technical expertise and a complex procedure to ship, you should know that you will find it more and more difficult to compete your rivals that have been around for years. Choose products that are easy to make and do not require lengthy procedures to ship.
For instance, if you want to get into software development business, you should know that the product creation in this industry requires more than just a good team of software developers. You have to find niches that are simple, yet have the ability to attract people.