Step 1 – Finding A Profitable Niche Market

Written by Susan on February 12th, 2009

There’s an almost infinite number of ways to make money online, and each one of them requires a different set of tools, knowledge and strategies to make them successful. But there is one fundamental thing that must be done before you take another step into the Internet wilderness – you must find a niche market to which to apply your time, effort and advertising dollars.

Believe me, I know how easy it is to get distracted and confused. There is so much information and so many enticing promises crowding the virtual airwaves, most of it uploaded by people whose primary interest is in separating you from your money. They want you to hurry up and get that website up (just purchase their easy template program!), launch that blog (just a “pittance” a month for their consultation services!), sign up for their affiliate wares, buy their “get-it-for-a-steal” product that will automate everything for you, and once it’s all set up, which they assure you will take but a single enjoyable afternoon of your time, the money will start pouring in like a financial tsunami!

Well, dealing with information overload and hype is a topic for another post (or ten). Right now I want to share with you a vital truth that gets lost in all the hoopla – until you have a product to market, a targeted group of people to market it to, and the knowledge of how to get these things – you will spin your wheels furiously and not move forward a single inch.

When you’re first starting out, it’s probably best to steer clear of the tough markets to break into, like IM. There’s money to be made there, no question, but the competition is cutthroat, and you might want to get your feet wet by concentrating on a niche that’s less saturated – specialty items, hobby stuff – doesn’t really matter what it is, you’ll probably find somebody somewhere wants to buy it. For all you know there’s a dedicated group of one-eyed, hermaphroditic underwater pole vaulters with shingles who get together once a month in Kissimmee to swap handmade dolls made from used dog beds. Bet they could use a good source of flea shampoo. Sell it to them! Find a starving niche, feed them, make a good income.

But I would further recommend that you stick to those niches you have an interest in personally. It takes some dedicated forum hopping to get to know your target niche well enough to sell them what they really need and want; you have to get thoroughly inside their heads. If you couldn’t care less about the relative depths of the dimples on golf balls, you’re going to be bored witless trolling the forums that talk about nothing else. Why burn the little candle of your life illuminating some corner wherein you have no interest?

So how do you go about finding a “hot” niche that you can actually get excited about? It takes some research to be sure that, just because you’re passionate about something, there’s enough other people out there dying to spend money on it too. Or even that they have any money to spend.

Start with Clickbank. They have a huge selection of products that you can be promoting, and you know there’s already a demand for them. But you want to find the right products for you. Stay away from the products that have high gravities (“high gravity” means there’s already a ton of affiliates out there selling the stuff). The numbers you should look for vary among the experts, but a good range seems to be minimum 30, maximum 200. This means that it’s probably a niche with a demand but not too much competition.

Once you’ve found one you’d like to pursue, you’ll want to check how many people are actually searching for this niche on a monthly basis. Go to the sales page and make a list of the keywords that are being used for this niche. There are a number of keyword tracking tools available online – I use Wordtracker. They have a great free trial version you can use until you’re ready to go pro. Alternatively, you can use Google’s keyword tool. Then, put the keywords in quotes and plug them into Google’s search engine – you’ll be able to see how many competing sites are already out there.

So here’s a little formula: (monthly searches/competing sites) X monthly searches = KEI (Keyword Effectiveness Indicator). If your KEI is 100 or greater, than that’s a niche you can hope to make some money in.

Finally, you’re ready to dive into those forums dedicated to the niche you’re after and get into the heads of your future customers. Do a search on Google: niche + forum. If you can’t find a forum, drop that niche and move on. If you do, get inside and start looking around. If the forum seems to be comprised of people who have no money to spend – kids, college students, people on unemployment – on to the next!

Keep an eye peeled for hot button words, like “problem”, “solution”, “how do I…?”, “where do I go…?”, “issue with…”, “I wish I had…” and so on. Read the sticky posts, read the posts that have the most replies. Find out what the people talk about the most, what they need, want, and wish they knew where to go to get. Maybe it’s just information – see what kinds of questions they’re asking, go research the answers, and put them in a little ebook you can sell them for $7. Participate in the forum if you can be at all helpful – it’s ok to have a link to your site in your signature, but don’t point it out. Get to be known as a source of help and information first – win their trust. The business will follow.

That’s basically it. Find the niche, check if it’s viable, find out what they’re looking for, and either build a site around an existing product or create your own. Then market the living daylights out of it.

And that’s a post for another time.