How to Choose a Niche That's Right for You


One of the most important things you can do online is to choose a strong niche, one that you both have interest in and that will make you money.

I am quite serious when I say that you should have interest in the niche area you choose. As you are building your business, you will be writing ads, writing emails, and writing articles, and perhaps even authoring ebooks on your niche area topic. If you do not have an active interest in your niche area, you will probably find that it is very difficult to write about your niche area. You will also be answering questions from people on your list about your niche area. If you do not have some interest in the niche you choose, you will likely find that it is quite boring to write about. And that will make it difficult for you to stay focused, and it will make it difficult to make money in your niche area.

So how do you choose a niche area that is right for you?

The first thing you need to do is identify areas that you have experience and/or interest in.

What do you like to do? What are your hobbies? What do you do better than most other people? What do you know a lot about?

Make a list of each of the answers to the preceding questions.

This next step may be a little more difficult, and may involve using some intuition. Which of these areas are areas where people online might be willing to spend money to learn more about or to purchase things in that niche area?

If you are having difficulty with this, spend some time searching for information about your niche area online. Using search engines, look up words pertaining to your niche area, and click into some of the web sites that come up in the search engine results. Are the web sites primarily information sites, or do they appear to be selling something? Are the web sites professionally created and appear to be profitable (that is a tough one to use your intuition on, but just ask yourself if you might buy something from the web sites in the search engine results)?

Are there sponsored ads to the right of and to the top of the search results? Generally if there are none or very few, it can be assumed that the particular niche area is not profitable enough to justify spending money sending traffic to those niche sites. That is, however, not always the case. Sometimes there are ‘undiscovered’ niche areas that can be quite profitable, but have not been noticed. These particular niche areas can be very profitable, because there are fewer competitors in the market. Generally speaking, however, the more sponsored search listings there are, the more profitable is the niche.

Next, write a list of words that people might use if they are looking for more information on that niche area. Using one of the following tools, check on the amount of web traffic that niche area is receiving. Generally speaking, the more traffic, the more interest. Of course, with more interest, comes more competition.

Here is a list of free keyword tools:

· http://inventory.overture.com/d/searchinventory/suggestion/ (this tool only shows Yahoo search results, so you can multiply the results number by about 5 times to get a relatively accurate count of total monthly search engine results)

· http://www.keyworddiscovery.com/search.html

This one requires a download, and uses a database:

· http://www.goodkeywords.com/

This requires sign up and is a free trial:

· Wordtracker

There are many other good keyword tools online, but for the purposes of choosing a good niche to go into, you really can get by with the free tools. In fact, many of the paid tools use the search results from the overture keyword tool, and although they give you many fancy options using the research, the basic research itself, the number of searches monthly, is derived from that tool.

Generally speaking, you want a niche area that has a very minimum of 50,000 searches per month, if your entire focus is going to be on that one niche.

However, another angle to take, and many successful internet marketers do just this, is to find many niche areas with a smaller amount of traffic, and build several niche web sites rather than one. For example, instead of choosing one niche area with 50,000 monthly searches, they choose five niches that have a combined monthly search volume of 50,000+. Although they have to create and maintain 5 times as many web sites and email lists, they prefer the generally lower amount of competition in these niches, as many marketers will ignore them, assuming there isn’t enough business in the niche. So either of those two strategies can be effective.

Once you have chosen a niche area that has a reasonable amount of searches per month, how do you determine how competitive is the market?

There are two basic ways to do this, and both are going to produce relative results. By relative, I mean that you can estimate that one niche has more or less competition than another, but it may be difficult to pin an exact level of competition on one niche. The key assumption here is that if there is more competition for one niche area, then there must be more profits in that one niche area. Of course, as you are interpreting the following results, it is important to use some creative thinking about the results, rather than strictly using the numerical figures.

For example, the niche area of ‘dog rescue’ might show a reasonable level of monthly searches, but that may just be that dog owners often search for information on dog rescue. This may or may not, however, be a profitable online niche, unless you are a local dog rescuer. So a little creative thought is necessary when choosing a niche area.

So, to evaluate the amount of competition there may be, on a relative basis, in a specific niche online, type in your niche term in “quotes” into the google or yahoo search engines. Either of the two search engines will give you a ‘search results’ number – a count of the different web sites that are dedicated or are optimized for that particular niche. The more sites there are for that keyword, the more competition there is in that niche, as a rule.

The second thing you can do to determine the amount of competition in a niche is to count the number of Overture (in Yahoo) or Adwords (in Google) sponsored ads there are. If there are few, that generally means that the niche area is not a profitable or competitive one, and therefore web companies are generally unwilling to bid on keywords in that niche. However, it can also mean that the niche is perhaps smaller (perhaps gets lighter search volume) and therefore is not widely considered to be highly profitable, but is indeed a profitable area. The reverse is generally more revealing. If a particular search term shows that there is a high number of sponsored search results (ads) then it is generally the case that the market is quite profitable, and has resulted in many companies bidding to be in the search results for that term.

Once again, this is a highly relative and speculative area of online research, and the only sure way to know that a particular niche can be profitable is to build a web site and test it. Also, in my opinion, just about any niche online can be profitable, if the correct product is created which meets the needs of the people in that niche area.

Start Tightly Targeted and Grow

When you first get started with a web site and building a list, it is best to start in a highly targeted position.

It is much easier to get a highly targeted list to a level of profitability than to get an untargeted list to profitability. Because you can more accurately target the readers of your emails in a highly targeted list, you are generally able to get higher opt in rates, higher email open rates, high email clickthrough rates, and higher sales page conversion rates.

Once you have built a substantial list in one targeted area, and have experienced most of the initial learning curve, then you can branch out into different target areas. The second list you build, as a result of the things you learn building the first list, will be much easier to build, and you will be able to build it more efficiently.

This allows you to genuinely become an expert in one niche area first, then branching out and learning new things after you have established yourself as an expert in one area.

Why You Have to Continue to Study and Learn

The internet is a relatively new phenomenon, and is rapidly changing. One of the things that happens online because of its ease of use and the rapidity with which information travels is that techniques and methods that are effective can become overused quickly. Once this happens, the effectiveness of a particular strategy can become weak in a short period of time, and in order to maintain profitability you simply have to adjust to the quickly changing market.

Because of this, it is critical that you set aside some time and money for future learning. Notice I say, SOME time and money. Except for the very first month, when you are learning more than you are doing, you should not spend more than some percentage of your online income on learning. Obviously this is impossible the first month online, as your income will likely be negative and you may spend hundreds or thousands of dollars on online instruction and information. However, once you become profitable, it is important that you do not continue to pour money into your web business if it is not yet profitable.

On the issue of time, you should always be spending more of your time doing than you should be studying. For example, if you dedicate 1 hour per day to studying and the balance to actually doing the things you learn in your study, you are probably striking a good balance. Again, this is a relative concept, because if you are only spending an hour a day online, you cannot spend the entire time studying and learning.

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