Know your niche

You need to know which industry segment you are interested in. This will enable you to promote these products better. Assess your own hobbies and interests and then find suitable products which relate to this segment. Find out which things you like doing in your spare time and then take up these segments as areas to find the right product or products.

Research

Good research always pays off, especially when it comes to affiliate marketing. Once you have figured out your unique niche, you need to do some research on which products are most profitable in this segment. There will almost always be a set of products which do much better than the others. By gaining access to these products you can start selling better and faster online. It will also maximize your earning potential. Do your research from online forums, search engines and article directories online.

Supply and demand

You will also need to analyze how much these products are in demand in this niche segment. Find out what customers are looking for, if your products can satisfy these requirements or not. There are the basic requirements which are an absolute given. Then there are the expectations which customers have which are sometimes met and sometimes not met by these products.

Your competition

It helps to know where you stand in the competition. Once you have decided on the most popular products in the niche segment, you need to assess your competition. Find out how much they sell, what kind of products etc. Your affiliate merchant may tell you about his or her direct competition, but it is actually you who will decide on the list of related products which customers consider when making a purchase.

Pros and cons

Next you need to assess the pros and cons of other similar products in the market. You could create a simple table in which you list down all products one by one and mention pros and cons for each. This will enable you to get a better idea of your products' unique selling proposition or USP. It will also help you promote and market the products better.

Interest quotient

Your products maybe very much in demand in the niche segment but it is also necessary to understand the level of interest these products command. If there isn't much interest nor much competition, these products may not be suitable for your affiliate marketing purposes. They won't fetch you much money in the long run.

Observe

It is also a good idea to observe how competitors are advertising similar products online. You could analyze these advertisements and learn from mistakes. Also, you can gauge the popularity of a product by noting how many competitors are advertising it. More advertisements mean the product is very popular in the market.

Test the product

Your product maybe one of the hottest items around in the market but if it isn't of good quality you can rest assured it won't sell. Therefore, it is a good idea to get a sample product from your affiliate merchant and test it out. You will not only get to know its unique features, you'll also know if it's of good or bad quality. Plus testing the product will make you look at the product from a consumer's point of view.

Fine balance

Many affiliate marketers make the mistake of either promoting too many products or too few. By promoting just one or two products you may make your customers feel forced to buy the products. If you promote too many products you risk losing focus. So be sure to maintain a balance in the number of products you promote.

Evaluation

The final step is to assess all of the above information which you have collected till now. Assess your demand, the niche segment you are interested in, your competition, the kind of advertisements placed etc. before you come to a decision on your choice of products.