How to Analyze the Level of Competition in a Niche

by Kristen Burgess
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What are some ways to determine what areas online people are interested in?

One way would be to simply go online and go somewhere that there’s a lot of advertising. So, maybe, any of the news websites. A lot of the news websites have classified ads on them. You look at those classified ads, and you look at the topics of those classified ads. You could even take a screenshot of the classified ads today and then a month from now, take another screenshot and see if the same people are advertising.

Watch for Consistent Ads

The truth of the matter is, 99% of the time, when you see advertisers advertising month after month after month. They’re doing it, not because they want to drive their competitors off the cliff, but, because they’re making money.

Look at the ads on the big websites (like big news sites) If you take a screenshot today, take a screenshot a month from now, and they’re the same advertisers. You can probably guess, those people are making money.

Does that tell us there’s a big demand?

No.

It doesn’t tell us anything about demand.

What it does tell us is, there are some people making money.

Is There Room for More Competition in Your Niche?

There’s 2 ways to look at other people making money.

One way is, to look at it and say other people are making money, is there room for another entrant? My belief is, there’s always room for another entrant. If! You’re willing to optimize so that you can do things as well as somebody else.

Some people like to enter markets where there’s very little competition. There’s only 2 or 3 people making money. Because then you can be a big fish in a small pond. The problem with that in today’s marketplace is if there’s only a couple of competitors, there’s probably not a whole lot of demand. That’s not across the board, but it’s a general rule of thumb.

There are a few ways to know if your competition is profitable, but many ways to imagine that they might be profitable.

For them to actually be profitable is one thing, and for you to figure it out is another.

Imagine going into your local pizza shop, and walking up to the proprietor and saying. “Hey, I’m thinking about opening a pizza shop across the street, how many pies are you selling on Friday night?” The guy might call the police and have you arrested for trespassing! He’s not going to give you that information! Well, it’s the same thing online.

If someone is genuinely making money in your area of interest they don’t want you, or anybody else, to know. Sometimes folks will do things that make it look like they’re not generating as much revenue as they really are. They don’t want the competition to know.

Is Your Competitor Trying to Trick You?

For example, you might want to look at a particular web business. Let’s just say, let’s go down another path here. I want to see if this person’s websites are making money. You log onto the website, boy, he’s running an awful lot of advertising, but he’s not getting a whole lot of web visitors. What’s going on?

What you don’t know, is that he runs his web advertising. And he randomizes it and splits it up between 30 different websites on 30 different domain names so that there’s not one website out there that looks like it’s really popular. He’s just spreading it out. He doesn’t need to brag about how many visitors he’s getting. In fact, he doesn’t want the competition to know. He may be advertising on those big search engines. He may be advertising, he may have 30 different ads running to 30 different websites that sell the same thing under 30 different brand names. Literally creating his own competition.

You go in there and you may say, there’s 30 different competitors, I don’t want to go into business in this arena. Well, you may only have one competitor.

The flip side of that would be to say, there’s 30 different competitors, it must be a really, really hot niche. The truth of the matter it is it’s 1 owner, instead of 30. That person has so optimized the flow of traffic that it’ll be very difficult for you to go head-to-head.

Number 1, I don’t think there’s very many situations in sales like that, although I believe what I’ve just shared with you is realistic and accurate. Not necessarily in number, but in concept.

How to Win Even if You Have Strong Competition

Let’s say a particular company appears to have a market totally locked up, and they’ve got everything figured out. If that’s the case, there are probably unmet needs in that marketplace that the company (or that individual) is not meeting. And, if you can find out what those holes and unmet needs are, you can create a brand new niche all by itself.

How do you do that? A great first step is to collect subscribers in your niche – you can run advertising, write some great content pieces, etc. To get people to sign up. Then send an email out asking for their 2-3 biggest problems/questions in the niche.

You’ll get a lot of responses and see some overlap. People will also respond with a lot of detail and you can go back and forth with those people.

Use these ideas to create products and break into a niche, even a niche where the competition has a tight hold on things. Your market research can help you pinpoint where your market is hanging out online, so you know exactly where to find them and get them onto your list. Then you’re off and running!

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