The fundamental mistake made by many niche marketers is they create products based on what they think people want to buy. The correct way of deciding what niche product to create, is to find out what people are actually buying at the moment.

Here are five ways of discovering ideas for niche products which you can sell to make money:

1) Use Forums

With the rapid expansion of the internet, forums (or discussion groups or bulletin boards as they are also called) have proliferated. There are forums hosted all over the internet based on practically every theme imaginable.

Forums are websites where like minded people gather to discuss all sorts of issues pertaining to the theme of the forum. Some of the well moderated forums are extremely active and a good place to conduct research.

When it comes to finding ideas for niche products, you need to use the search engines to locate a number of forums on the theme you are interested in. For example, if you're interested in needlepoint, you could enter needlepoint+bulletin board into the search engine.

Visit each forum and find out what questions people are asking. In addition, find out how many times similar questions are asked. The more frequently a question is asked across a number of forums, the more likely you have found a topic for your next niche product or website.

2) Visit Your Local Book Store

If you are completely stumped for ideas, a visit to your local book or magazine store is in order. People who are keen on a hobby almost always subscribe to related magazines, and if they buy magazines there's a good chance they will buy niche products.

Your task is to discover what magazines are being sold and how quickly they move. It is best to visit a number of stores and compare the common magazines sold in all of them. Try to find out from the sales assistants how many copies they sell of the popular magazines you have identified.

A magazine sold in great number by each store, month after month, is a sure sign of a profitable niche.

3) Investigate eBay

eBay is one of the biggest, if not the biggest single market place on the planet. Millions of people buy a gigantic range of products month after month.

Go to eBay.com and scroll down the left hand menu, click on "All Categories" and scroll down to the bottom of the page that opens in your browser until you get to the section titled "Other Ways to Browse". Included in that section are four sub-sections, each being ways to conduct your research:

      i) eBay Keywords (popular terms being searched for)

     ii) Common Searches

      iii) eBay Pulse (a daily snapshot of current trends)

     iv) Popular Products

From these four you will be able to spot a multitude of popular ideas for your next niche product.

4) Survey Your Website Visitors

If you have an existing website which receives a fair bit of traffic, you can survey that traffic using a popup. In order to entice people into taking the survey you will have to offer some kind of reward. You could even offer extra rewards for people who refer others to your survey.

Normally any web survey you conduct would have to be of a similar theme to your website, but it is possible to conduct a survey to find out your visitor's interests and whether they would be prepared to spend any money on their interest.

They key is to ask simple questions in a manner that won't lead your respondents to any particular answer. When designing your survey, keep in mind you will have to analyze the data and draw conclusions from it. This means keeping your questions "on topic".

The simplest surveys to analyze are those constructed with multiple choice questions. The disadvantage of this is you don't know for sure that the answers are absolute or close (i.e. "second best").

5) Survey Your eMail List

If you have your own email list, you could survey them to find out what problems they are currently facing, or what interests they have. People on your email list will tend to answer more truthfully because there is a degree of trust between you and them.

This degree of trust not withstanding, you will still have to offer an incentive for your subscribers to take the survey. Design your survey the same as you would for a popup on your website.

If you want to sell niche products from your own website, physical store or even on eBay, you need to be able to compete with your local retailers. This means finding a wholesaler willing to trade with you at prices which give you enough leeway to make a profit.

The first place to look is locally, why pay shipping charges for goods sent from a supplier across country when you could take a drive in your own car to a local supplier for small goods or hire a van for bigger stuff? Some local wholesalers might even provide a cheap or even free delivery service.

Wholesalers as a rule don't advertise in the mass media such as TV or newspapers and so they are often difficult to find. To get you started, here are a few ideas for locating wholesale sources of niche products for you to sell:

1) One of the first places to look is in your local trade directory, many wholesalers place advertisements in local trade directories and even in the Yellow Pages for the products they carry.

2) Another place to conduct your research is on the internet, and there are search engines which are wholesale specific such as www.wholesalecentral.com and www.wholesalequest.com. These wholesale specific search engines allow you to search for wholesale sources by browsing categories or by entering keywords (related to the products you want to sell) into a search bar.

You can find other wholesale specific search engines or directories by typing "wholesale search engine" or "wholesale directory" or "wholesale directories" or even "wholesalers" into the search engine of your choice.

3) Nearly all wholesalers will belong to a trade association and these trade associations will often host trade shows all over the world. It stands to reason that an excellent place to discover new wholesale sources is to visit as many trade shows as you can. Here are two ways of finding suitable tradeshows:

    i) Join a trade association related to the goods you wish to sell and subscribe to their periodicals or newsletters as these always carry details of local, regional and international trade shows.

    ii) Conduct research on the internet by visiting websites such as Trade Show News Network (www.tsnn.com). You could also search for others by entering "trade show directory" or add a keyword related to your products to the search phrase - for example, "jewelry trade shows".

4) Look for the items you wish to sell in a local store, when you find the item look carefully at the packaging as many suppliers provide their contact details and often include their website URL. You can either contact them directly or visit their website to discover how to either purchase from them directly (which is often cheaper than buying from a wholesaler), or if that is not possible ask them who your local wholesaler is and if they can give you the wholesaler's contact details.

Once you have a list of possible wholesale sources for your niche products you need to do some due diligence on each wholesaler. You need to find out if they are legitimate businesses and are approved by the manufacturers. They last thing you want to get involved in is a copyright lawsuit because you are inadvertently selling illegal copies of the original product.

From a purely business point of view you need to find out their payment terms, return policies, shipping charges and methods. If you can, you need to get references from other customers; are they happy with the wholesalers service or not?

Once you have decided on a wholesale source, there's one thing you need to be aware of… When you purchase from a wholesaler you have to buy in bulk, you cannot buy individual items. If you're just starting out you're probably going to find this quite expensive, but there is a way to reduce this cost. If you can, find another established customer who buys the same products as you, you can approach them with a joint venture whereby they sell you products for a set profit, say 20% on each item you buy. Your end of the joint venture will be that you agree to buy a set number of items each month and that don't compete with them directly.