-Contributed by Eben Pagan

Over the past 15 years, I've built more than a dozen online businesses, all of which used digital products (ebooks, DVDs, MP3s, online Membership Sites, etc.) to deliver my teaching.

In the process of building these products, I've discovered a set of critical elements that must be done right, and in the right order, if you want to succeed.

If you get all of these elements right and in the right order, you have success. If you get even ONE of them wrong, it can cause you to fail.

I call this the "Critical Path Of Success."

Imagine a car.
Now imagine all the things that must work in order for the car to work.

First, the battery must work. Then, the engine must work. Then the transmission. The wheels and tires. The electrical system. The gas pedal and so on...

If ANY of these elements doesn't work, the entire car doesn't work.

And just like a car, if any of the key elements in your Critical Path doesn't work, your entire business doesn't work!

Now when it comes to building a successful digital products business, the first Critical Path element is finding the right niche.

If you target the wrong niche, it's just like having a dead battery in your car.

The best motor and the nicest wheels can't take you anywhere if the battery doesn't start the car.

Likewise, the nicest website with the hottest marketing in the world won't work if your niche doesn't work.

If you get the niche right, however, everything else you do in your business will be easier and more effective.

If you get the niche wrong, everything else may be hard…or even impossible.

Luckily, I've developed a proven method for identifying niches that are virtually guaranteed to be successful.
I call it...

"The Niche Test"
The Niche Test is a set of three questions that you can use to test the potential of any niche or product idea you have before you invest time and money into it.

If you get three "Yeses," you've got a niche or a product with a high potential of success.

If you don't get three "Yeses," you'll want to keep searching until you do.

Here are the three questions:
1. Are your customers experiencing pain, urgency or irrational passion?

In other words are they triggered emotionally? If they are not experiencing emotional pain or strong passion then your idea is probably not a good one for a product or niche, because your potential customers are not motivated enough to consider making a change.

2. Is your customer proactively looking for solutions?
Is your customer actually getting off their butts and looking for a solution? Are they motivated enough to take action? If they are not proactively looking for solutions, then you would have to talk them into wanting your product, which is usually an uphill battle.

3. Does your customer have few or no perceived options?
The more options your customer has, the more competitive your niche will be for you. You want the problem you solve to be specific enough that when your customer finds your solution they say, "Wow! I really haven't seen anything quite like this."

That's when you can charge higher prices and literally dominate the market.

If you enjoyed this article and would like more advanced training, check out my latest free video "How to Turn Your Big Idea Into an Online Business." This video is a gold mine of tips and secrets for taking your idea and turning it into a successful digital products business.

Click here to watch -> "How to Turn Your Big Idea Into an Online Business".

Author's Bio: 

Eben Pagan launched his first online business from his bedroom in 2001. Beginning with an ebook of dating advice, his company grew to more than 10 brands, selling more than $100 million worth of trainings and information products, with over 70 employees, all 100% virtual (no office). Today, through his online training courses, he teaches entrepreneurs around the world to grow their businesses and advises high growth start-ups, including Ontraport, Splash, Inflection and Ongig.