Choosing a Niche for Making Money
1. Approaches to Choosing a Niche
The matter of choosing profitable niche market is often very confusing for many Internet marketers. This problem is faced by all marketers who are looking for choosing a niche for making money and everyone solves it in their own way.
And this is natural, since the error at this stage can lead to unsuccessful online business attempts and donot allow building a profitable website.
Let’s briefly discuss approaches of selecting market niches in order to avoid big errors when they are selected to make money online.
So, there are two normally happening ways to choose online niche markets:
- Niche selection on your desire
- Niche selection on its potency
Niche selection on your desire
Niche selection on your desire – this is the situation when you choose a niche primarily in accordance with your desires and knowledge on a specific subject. And this is very important for you, as you want to do exactly what you love and know, and also, you are ready to accept the competition in a niche, as you know how to use a niche.
For example, you are comfortable with the books sale and you want to set up a business for online selling of children’s books. In this case you are pursuing the goal to make money online and, also, to enjoy the work, which is pleasant for you. It often occurs that many people identify the online business market niche by their hobby or profession, because they have the understanding on the topic. If you choose niche market this way, then you should clearly understand that you’ll take the competition such as it is at the present moment.
So, when making niche market research you should take into consideration the existing level of competition in the niche and know exactly how to overcome it. Also, the good knowledge of the subjects does not exempt you from knowing how to find profitable keywords with low competition and how to find niche products to sell online.
Niche Selection on Its Potency
Niche selection on its potency – this is when you select a niche primarily with the aim to make money online (and even very good money), leaving to study details of this niche for later, but with mandatory detailed execution.
This is a very critical business step for picking up niche market ideas and you should recognize that you’ll have to explore the subject of the niche, especially for products (or services) understanding, since you’ll be a newcomer to this niche. As a rule, it’s not so hard to do, but it’ll take time for you at building a profitable website.
For example, by the main profession you are a teacher of chemistry and you found a niche for children’s bikes sale. In this case you have to severely study the variety of products and services to ensure the right selection of products to advertise on your niche website.
Also, if you choose niches this way, then you have the chance to choose niches with less competition. But you should not get involved too much in getting niches without any competition, as typically the niches with no competition (or very small competition) are not money niches!
No matter of how you are choosing a niche for making money, you can’t get away from correct understanding of its size, trend, keywords, competition, and whether it is profitable. So, before the final selection of a niche you should perform the detailed niche study (niche research).
2. What to Look First in the Niche
How to find your money niche? Where to start studying the market? How to find niche products to sell online? I recommend you the process of niche selecting to divide into two stages:
- Preliminary analysis
- Detailed study (niche research)
The detailed study should be carried out only if the preliminary study gave a positive result. So, at the preliminary stage, you firstly need to have an understanding of what to look for in a potential niche! At this stage your first task is to write down a list of all the things you are good at, also all of your skills.
You should have a few ideas of some niches that you want to deal with, so you need to understand whether or not the niche is profitable and one that is worth pursuing. Do not be concerned if most of your niche market ideas end up as no-go niches, there will be at least one gem in there that you can create a website and start niche marketing.
What exactly should you look in the niche:
a) Do People Really Buy from This Niche Online?
Not everything sells online and you need to consider this when choosing what you are going to promote and how to find niche products to sell online. Some items, for example, such as shoes, really do not sell well online because there is a big variation in styles and fits and only very few people order their shoes from the Internet because they prefer to try them on first.
So, starting to examine the niche market ideas you are considering if people are purchasing it online. For this you can see, for example, how many reviews are there on an Amazon product, or how many Google Ads are there when you search for the keyword, or how many of the websites in the top ten are selling products compared to how many are just providing information, and other.
This is going to give you an idea of whether or not people buy the product you are considering to promote on your website. If people don’t buy it online, then there is a little point trying to sell it.
b) How Many Other People Are Marketing in This Niche?
This is another important concern when choosing a niche for making money. If there are a lot of other people promoting products in this niche, then it is more than likely that a niche is profitable.
If there are just a few or no people promoting the product – you have to ask yourself if it is one that doesn’t sell online or if you’ve discovered an untapped niche. The last mentioned is unlikely, but it is possible. You have to research to find out if the niche is one which is profitable.
This will also give you an idea of the competition in the niche. A niche with too much competition may be too difficult for you to get traffic, unless you are paying for the traffic. So, you need the right balance of competition and traffic. In this case your skills in SEO and your budget for paid traffic will determine how high a level of competition you can work with.
c) Do People Search for This Niche On the Internet?
This is where you figure out whether there is enough traffic to make it useful marketing in the niche that you have chosen.
If there are not enough searches per month then you will get very little traffic, meaning your earnings will be low. You have to balance traffic versus earnings. So, a niche where you get paid $100 a sale may be profitable to go in with only 500 searches a month, but a niche which only pays $5 a sale won’t be worth as much to you.
It’s important that you determine how many people are actually looking for the product you are promoting in order to determine how profitable the niche will be for you.
Remember that the more profitable niches and high traffic niches are likely to have much more competition, meaning it could be harder for you to rank well in the search engines and start to earn.
d) What Problems Cause These People to Turn to The Internet?
People come online to buy products because they have a problem that they want a solution for.
Understanding the problems of your potential audience will help you to focus your website content on their needs. The more relevant your content is to your target market, the more likely they are to stay on your website and eventually buy.
3. What to Consider at Niche Potency Study?
The niches study is characterized not only by a verbal description, but also by an analysis of the numerical characteristics of the specific indicators!
To analyze the potential of a niche many indicators can be used, but the main ones are the following:
- Niche Trend
- Niche Demand
- Niche Profitability
- Niche Competition
All of the research of the niches and online business ideas are concentrated around these issues. So, let us in brief consider each one of them.
1. Niche Trend
To set the niche trend simply means – to determine whether the niche is not dying!
This can be done by using Google Trends. This tool provides the data and graph for the given keyword, that allows you to see trends for the given period of time. The search also can be configured also by categories and countries.
In order to obtain an adequate picture for your niche insert the period of time to – Past 12 months!
The numbers that appear on the graph show the total searches for a term relative to the total number of searches done on Google over time. A line trending downward means that a search term’s relative popularity is decreasing. But that doesn’t necessarily mean the total number of searches for that term is decreasing. It just means its popularity is decreasing compared to other searches.
So, if you see the rapid decrease in the number of searches (a sharp drop in the curve) – it’s a sign that you should not go into this niche!
2. Niche Demand
In the Internet marketing the demand for the products (or services) in a specific niche market is determined by search volume in the major search engines for the keywords that adequately describe the niche!
If the search volume is essential, it’s the first sign that the niche can be the money niche.
So, the first thing you need to do is to find out which keywords your audience is using when they search for the information related to your chosen niche market, and then to find out the number of requests in Google.
To find out the number of requests for the particular keyword you can use the free tool –Google AdWords Keyword Planner.
Just type your keywords into the planner search box and you’ll see a ton of information. In order to get an idea about the demand – concentrate on the Global Monthly Search Volume feature. It tells you how many people are searching for those keywords in Google around the world each month. Write that number down.
Also, I recommend you use the Wordtracker. It can give you the business ideas of the relative demand for each niche inside a larger market.
3. Niche Profitability
With a view to make money online and before you make a final decision on choosing a niche for making money, you need to know whether the size and buying power of the niche market is solid enough to preserve your business. In other words, whether a niche is a business niche (or money niche)!
Even if you’re only launching a single product or service into a new niche market, you need to figure out whether the market can support your new offering ensuring profitability.
Identifying the specific niche is a relatively easy task. However, to determine whether this niche will be profitable for your business is much more difficult, as, unfortunately, the common formula to assess the profitability of the specific niche hasn’t yet been developed!
And yet, how do the Internet marketers assess the profitability of the specific niche?
The answer is – through the analysis of several key factors, the most important of which are:
Does the niche have competition?
- What is the average value of Google AdWord’s CPC?
- What are the prices for affiliate products?
- What are the commission rates?
- Are people buying information?
- Does the niche have sub-markets (sub-niches)?
- Is there an active audience?
- Does the marketer have required assets to market and advertise his products to consumers in the niche market?
If the answers to these and similar questions are positive, then marketers have come to the conclusion that the niche is profitable. And the direct size of the earnings will depend on how much of a niche the marketer can win.
4. Niche Competition
You also need to take a hard look at the competition in the niche when studying niche market ideas!
The competition in the niche market is estimated by evaluating the competitiveness of the keywords, as well as by assessing the websites of main competitors.
Understanding who your competitors are and the keywords they’re optimizing for – is very critical to staying relevant, competitive and profitable in your pursuit to acquire more revenue.
To study the keyword competition you can use Google AdWords Keyword Planner and consider the Competition, Monthly Search Volumes and Approximate CPC from the metrics when exploring new keywords.
These data are available when logged into your AdWords account. Low-volume, low-competition keywords will likely come with lower CPCs, but may not result in many clicks or conversions. High-volume, high-competition keywords will likely achieve the opposite.
The ideal would be high-volume, low-competition! Though you probably won’t discover the holy grail of keywords, you might discover a new set of keywords that perform well at a lower cost-per-click compared to the rest of your keyword list.
Another tool that I recommend you to assess the competition in the niche market is Wordtracker. It can show you which keywords have lots of competition, and which have less. Ideally, we’re looking for less competition, as too much competition can make it hard to rank for keywords, making implementation of business ideas more difficult.
So, here you have to learn how to find profitable keywords with low competition!
Also, you should be well informed about the potential of your main competitors!
Specifically, you need to know if competitors are strong enough to pull niche buyers away from your products or services. Which competitors have a foothold in the niche market? What new products or services are competitors introducing to buyers in the market? Are those offers successful?
4. Niche Study Step-by-Step
First of all, I must say that there is no the standard methodology for choosing a niche for making money and niche study. Every Internet marketer uses his own approaches and techniques to evaluate niche market ideas.
For example, some of them at the first step look at the keyword’s trend using Google Trends tool, and if the trend is negative, the keyword is immediately excluded from further consideration.
Other marketers at the first step look at the competitor’s real traffic using SimilarWeb tool, and if the traffic is weak, then a negative conclusion is made about the weak potential of possible sales of advertised products.
But anyway, understanding the basics of niche market research is fundamental for any Internet marketer, even for those who use automated tools to find profitable niches like, for example, Niche Reaper (created by Matt Garrett) or Micro Niche Finder (created by Brad Callen).
In the previous paragraph, I gave the basic principles of choosing and analyzing a niche.
Let’s go further in this paragraph and see how to obtain and use some important numerical characteristics for a more detailed niche study. To obtain these numerical characteristics, various tools are used.
So, in practice the Internet marketers use different approaches to research niches, but the foundation of these approaches mainly is just the same and includes the following basic steps:
- Step 1: Identify Your Audience
- Step 2: Pick the Keywords
- Step 3. Determine the Trend
- Step 4: Evaluate the Keyword Matrix
- Step 5: Determine the Profitability
- Step 6: Determine the Competition
- Step 7: Estimate the Niche Potential Traffic
- Step 8: Decision-Making
So, let’s have a look at the niche market research basics by steps.
Step 1. Identify Your Audience
The purpose of Step 1 – is to identify whether your niche contains an audience that can be seen as your potential clients, now and in the future?
With the aim to make money online, of course, you seek for the profitable niche and for the stable sales of your own or other people’s products. This means that you are looking for the niche audience which has the money and the desire to buy certain products.
That’s what makes you to concentrate first on the products. But this is wrong, you must first focus on niche audience!
Why should you focus on a niche audience first, instead of products?
Here are two main reasons:
- Products come and go, but the niche audiences may stay for a very long time (even forever). If you’ve ever been advertising a product profitably and then had it decrease in popularity of the product, then you know what I mean
- When you choose a niche audience and take the time to recognize their needs seriously, a world of many options will open for you and you will switch from having difficulties to find ideas for products, to quickly knowing exactly the types of products you should be marketing – because they will be in line with your niche audience’s needs
So, how to account an audience when searching for a profitable niche?
a) First brainstorm an audience
Choose an audience that you represent yourself, as often it is better to pick a niche topic that interests you. Discuss it with your friends and on the forums, see the articles and posts on the major websites on the topic, etc. Social networks also can help you brainstorm an audience.
b) Discover the issues your niche audience has
This includes doing research into the problems, challenges, pain points, and desires that your niche audience has. There are many places online that you can come across this information, including niche forums, niche websites, how-to websites, popular blogs, etc.
c) Choose the most profitable issues
Not all issues are created equal. Some problems your audience will love to pay to solve, others will be a tricky sell. You need to recognize the difference! To do this you can use some filters, for example, such as: the number of monthly searches related to a problem and the stableness of search terms related to that problem.
d) Recognize profitable problems deeply
Here you must try to determine exactly what people want to solve, what they pay for and are willing to pay more!
At this point you also need to understand the language people in the niche use in explaining their suitable solution, so you can use this language back to them in your niche website content, squeeze page copy, sales page copy, etc.
Step 2: Pick the Keywords
The purpose of Step 2 – is to choose the profitable keywords that most closely cover the niche!
Mainly here you need to know how to find profitable keywords with low competition.
Taking into account that the modern search engines use keywords to organize and search for information, the analysis of niche markets is also tightly associated with the keywords analyses.
So, at this step you need to pick up your niche market keywords and the result of this step should be a list of selected keywords!
This means that you should identify what keywords your audience uses when they research topics related to the specific niche market, especially searches related to their problems, pain things or biggest needs. This info is very important, as it’ll not only tell you what issues your audience cares about the most, but also it’ll tell you whether or not there is enough revenue potential in this niche.
Usually at this point, marketers use Google AdWords Keyword Planner to identify the keywords the niche audience is using to search for products, services, solutions, and any info related to this niche market.
So, you also can pick and analyze some keywords that are relevant to your niche. But do not choose too broad meaning keywords, since in this case your website won’t stand out in the search engine’s algorithm.
However, remember that using this well-known and very powerful free keyword tool for keywords analysis is Ok, but it is good to apply only for the preliminary (initial) analysis, because this tool does not answer the main questions – What are the most profitable keywords in the proposed keyword’s list? (In other words, it does not automatically select the best keywords for you, it leaves the choice is yours!)
If you often have to deal with keywords, then you should use the tools with auto search of better keywords. There are many of such tools on the market. I advise you to choose from the following list – Long Tail Pro, Keyword Researcher, Keyword Tool and Market Samurai.
If you are experiencing difficulties in the preparation of a list of keywords for your niche use Word Tracker. It’ll help you find the best keywords related to your search term. You can see how much traffic (volume) each keyword gets and what to focus on,
use SEMrush for free, just insert your keyword and click on ‘Phrase Match’ and you will get a list of related keywords with data on them.
Step 3. Determine the Trend
The purpose of Step 3 – is to determine whether your niche is dying?
In order to do this, you should study the keyword trend for at least the last 12 months (for each keyword from you list).
To study the niche trend is the easy task. Just enter your keywords one by one in the Google Trends search box and study the graphs and data.
So, you will see a graph of your keyword popularity dynamics. If the keyword popularity dynamics is negative, then it is a signal that the niche dies and it makes no sense to work with it. You need to look for other niche market ideas.
The tool allows you to perform a variety of settings, for example, you can see the trend by geographical indication. Also, the tool allows to receive data for different time intervals, I advise you to set the interval of 12 months.
Step 4: Evaluate the Keyword Matrix
The purpose of Step 4 – is to get the important numerical characteristics for keywords from you list and to analyze them!
For this, Keyword Matrixes are used, that can be obtained with the help of keyword research software (keyword tools).
So, the Keyword Matrix – means a table with the data on a number of important characteristics, like:
- Total Searches
- SEO Traffic
- AdWords Traffic
- AdWords CTR (Click Through Rate)
- AdWords CPC (Cost Per Click)
- SEO Competition
- Title Competition
- URL Competition
- AdWords Competition
- AdWords Value
- SEO Value, and other
In order to obtain such a matrix for your keywords, sign in Google AdWords Keyword Planner and type your keywords into the search box. You’ll see a ton of information.
Of course, the joint data evaluation of such a table is difficult to perform, that is why the marketers apply different smart tools for analyzing such information, but on what I want you to pay attention when you research the niche keywords – is the monthly search volume and CPC (Cost Per Click)!
Total Searches – tells you how many people are searching for the specific keyword in Google around the world each month. Write that number down. The higher the search volume is, the bigger is the market. As a rule, anything over 1,000 exact match searches a month is worth looking into! However, there are some niche markets with smaller monthly volume that have profit potential as well, especially if the market is hungry, and there is not a lot of competition.
Some Internet marketers usually choose to use keywords with a large number of searches and less competition. The niche website which uses such keywords has more chances to be successful.
CPC (Cost Per Click) – speaks about the business significance of the keyword, its economic importance! This suggests that in a niche with this keyword money is found, otherwise the marketers would not buy these keywords in their AdWords advertising campaigns.
So, on this step you need to know how to find profitable keywords with low competition and include these keywords in your list.
Step 5: Determine the Profitability
The purpose of Step 5 – is to assess the profitability of using a niche!
As I mentioned earlier in Chapter 2, a single (standard) formula for the numerical description of the online niche profitability does not exist. The marketers try to assess niche profitability by analyzing some of the factors when choosing a niche for making money.
Here, I will give you an example of the niche profitability express analysis in two steps.
First – see what is CPC (Cost Per Click) and competition for your keywords? For this you can use SEMrush and write data.
Second – see what is the product’s commission in the niche?
If the niche is profitable, then products and services are sold in niche and the marketers get commission. In order to find this data, you need to look at the sales on the main marketplaces on your niche topic!
For example, if your niche is about a specific type of digital products, have a look at: Amazon, ClickBank, JVZoo, Commission Junction, Share a Sale, etc. and analyze sales and commission for your products.
If the collected data is positive (if there is a certain competition and there is a certain commission rate from sales) – the niche is profitable.
Also, look carefully at all the indicators you get from the used tools. For example, at SEMrush tables you will see an indicator – KD, which is measured from 0 to 100 and which indicates how difficult it would be to rank well in organic search results for the particular keyword.
So, you should strike a balance between the Profitability and Efforts to achieve the goal. But in any case, the CPC (Cost Per Click) data indicates the profitability of the niche and often this is enough to include the keyword in your list.
Step 6: Determine the Competition
The purpose of Step 6 – is to identify the level of competition in the niche and to assess your capabilities in overcoming competition!
The level of competition in a niche is a good sign whether the niche is profitable or not!
All competition really means that people are already making money in a niche. You should not be afraid of competition in a niche, as there are so many approaches to stand out and make your content unique. Even if a market has lots of competitors you can still generate traffic!
So, never let the presence of competition prevent you from going after a profitable niche. Instead, adopt the philosophy that competition means – there is money to be made.
The most profitable niches are generally recognized by:
- High average CPC (Cost Per Click)
- Multiple web pages of ads
- Number of advertisers in the top 3 premium positions
- Many ads that are targeted to the search keyword
I want to note that CPC (Cost Per Click) is the estimated price that marketers spend to promote on Google Ads. As I mentioned earlier, this is a crucial figure simply because advertisers won’t invest any money unless they’re profiting from a certain topic. I recommend you go after niches that get at least a $1.00 CPC.
Where to get information about the competitiveness of the keywords?
Keyword tools usually provide data for the concrete keyword completion level as: low, medium and high.
If you choose keywords with a high level of competition, then to win in the competition and get free traffic from search engines you will need to provide original content and create a big number of quality backlinks to your web pages, or otherwise to buy traffic.
So, the key, you might have realized is – to find a set of keywords with high monthly search volume and low competition!
A very useful for this research is SEMrush tool, as it provides data for: Organic Search; Paid Search (including CPC and Competion); Trend; Phrase Match Keywords; Related Keywords; Ads History; and other. Also, this tool provides the competition index in number (ND), so you can compare the value of this indicator for the different keywords!
In addition, SEMrush tool provides some free options and you can use it to quickly assess competition in any niche.
Step 7: Estimate the Niche Potential Traffic
The purpose of Step 7 – is to identify the traffic volume in the niche and also to know how much traffic of this volume the potential competitors receive!
To know this characteristic, especially for your competitors, it is like knowing, for example, how many visitors a day has a particular supermarket which is your competitor. Given the importance of this indicator, many Internet marketers study it first and often, if the traffic volume is small, they exclude a niche from consideration.
So, where to see the traffic of the competitors if the keyword tools give only data on the total number of requests (searches), for example, per month?
To solve this problem I advise you to use SimilarWeb. It will provide you the accurate overall traffic numbers for the competitive websites.
You may wonder what traffic volume is considered as significant? A good sign can be, for example, if the leading websites in the niche receive at 400,000 – 500,000 visitors per month with the majority of that traffic coming from search.
And a few words about the SimilarWeb!
It provides accurate and informative data on businesses in your market niche, so you can easily see what your competitors are doing. This search engine optimization analysis tool collects important metrics on traffic, engagement, SEO keywords and more on your competitors, giving you an overview of what you’re up against and how you can gain an edge in your market. Also, the tool provides free options.
Step 8. Decision-Making
At Step 8 – you add up all the collected data and decide to use a niche or not!
So, this step is characterized by two things:
- Collected Data Record
- Capabilities Evaluation
a) Collected Data Record
Caring out the niche research you should capture and record data in order to create a list of keywords for the niche.
The data should at least include:
- Number of searches per month in the search engines (mainly for Google)
- Trend characteristics
- CPC for each keyword,
- Competition indicator
Further, these keywords you will also use in content creation for your niche website.
b) Capabilities Evaluation
The choice of niche should not resemble a desperate diving in the sea.
The question how to use a niche to make money online is also associated with the evaluation of your own capabilities in terms of overcoming the competition problems, as using money niches you have to compete.
So, how to assess your scope?
First, click Google and see what sort of Content people are presenting on their websites for the keywords you have in your list. The first 15-20 websites in the Google list of search results – are the main competitors for you! Assess whether you can present the material on your web pages better than they do.
Second, be sure to look at the PR (Page Rank) of the Competitor’s Website! To see the PR of your competitors just inset the web page URL of a competitor in a Page Rank Calculator (it is free). You’ll get the data for: Google Indexed Pages, DMOZ Directory Listed, Google Page Rank, Alexa Rank, Page Speed Score, Backlinks and Bounce Rate. This information is more than enough to evaluate the competitor! If you plan to get traffic from search engines your web pages PR should not be lower than those of competitors.
Third, also see Competitors at Facebook. Take a look as some competitors at Facebook, just insert your keyword in a search box and study the first 5-10 websites from the list.
Make the final conclusion on niche use.
Suppose you found that the PR rate of the web pages of the main competitors ranges 2-3. If you feel that you can bring your web pages on the same level or higher, then you can safely dive into a niche.
Tools for Niche Research
To perform quickly and efficiently the niche study you need to use the quality tools (keyword research tools or niche finders). For today, there are a wide variety of tools and resources for niche study, that often makes the choice difficult. To facilitate your choice, I present below a list of recommended niche study resources.
1. Free Keyword Research Tools
2. Paid Keyword Research Tools
3. Niche Finders
4. Related Tools
Evaluation of the individual keyword, as well as the entire niche, is a capacious and creative process. In fact, this is an attempt to solve the problem of multifactor optimization. Clearly, knowledge and experience are needed here.
Also, it is difficult to carry out such an analysis manually, so the tools and their potential are so important in this process. That’s why I brought a list of the best tools in the Appendix.
Taking into account that Internet marketers have to work with keywords not only at the stage of niche research, but also at the stage of content preparation, it is reasonable to choose high-quality tools and use them at choosing a niche for making money. I hope my post will help you to know better how to find your money niche.