In How to Get Started Making Money Online I discussed each of the most common strategies for building an online business.
Now we’ll discuss choosing a niche. You can choose a niche and strategy in parallel. Often after you’ve chosen a niche you may end up using more than one revenue source or business model for the same niche.
For example, you may start a gardening blog and monetize it with advertising, affiliate links, drop shipping physical products in the niche and/or your own gardening related products.
I covered strategies and methods for making money first so that you could visualize the various kinds of revenue streams.
Now we’ll look at the key questions and success factors for choosing a niche.
Should You Choose a Broad or Narrow Niche?
Your first instinct might be to pick a niche or market that is small so that you can avoid competition.
This is a legitimate idea and there is certainly room for profit in narrowly defined niches. But if the slice you go after is too small, you risk capping your full potential.
If you develop a first class website in a niche with lots of traffic, your profits are almost unlimited. If you develop a best of class website in a small market you may be ahead of all the competition but still encounter a limited amount of traffic.
Are you still skeptical about going after a highly competitive market? In future blog posts we’ll look at how to get your foot in the door. Some techniques include:
- Finding the high search-low competition search terms
- Targeting a slice of a wide market and adding slices as you grow
- Looking for new search terms in existing markets
Neil Pattel recommends going after a market that is at least 10 times bigger than “digital marketing”.
How Do You Compare Market Sizes?
Google Trends is an excellent tool for comparing niche sizes. https://www.google.com/trends/
Without looking at the chart below can you list these niches in order of market size?
- Digital Marketing
- Water Skiing
Google Trends tells us the relative number of searches for each of our search terms and how the search volume is trending over the past 5 years.
Scroll down and you can see where the terms are being searched for, related terms that are hot right now and how fast they are trending.
You should do some experiments like searching for “college basketball” instead of “basketball” to see how the sub-niches compare in search volume.
How Important Are Passion and Knowledge of a Niche?
My opinion is changing on this topic.
I used to believe that it makes little difference how much you love a niche as long as you know how to build (or buy) websites.
In fact, I’ve made the majority of my income from niches I don’t care a whole lot about like news and health.
However, lack of passion about a niche can severely limit your growth for a few reasons:
- You won’t know what to write about without doing a lot of research
- You will get bored of the topic earlier and be tempted to move on to something else
- You may not be able to distinguish between writers who know the subject area well and those who don’t
- You will not be as effective at engaging with your audience in social media, forums or blog comments
Knowledge and interest in a niche can eliminate all those problems.
I’m not saying you need to do all the work on your website yourself. But being in the know about your subject will make you better at finding good people to do your content creation, social media posting and product selection.
If you are interested in a niche on its merits alone and don’t know much about it, here’s something you can try:
Partner with someone who has passion and skills in the niche!
What Niches Make Money?
It is safe to say that there is money to be made in almost every niche.
However, niches that sell higher priced products and services will allow you to earn more from each click on an ad, affiliate purchase, digital product purchase, etc.
Examples of higher yield niches:
- Mobile phone plans
- Real Estate
- Luxury Items
Niches with higher priced products usually have less traffic and more competition.
Of course, people make tons of money in niches that have higher volume but lower priced services:
Examples of high volume – low price point niches:
There are exceptions of course. “Golf” has high priced products and pretty heavy search volume.
Which Niches Do Better in Social Media?
Anything visual does well in social media.
Facebook recognizes the appetite for visual media by ranking videos about 40x higher than images and images 10x higher than text.
Those numbers vary of course, but that is what I was seeing from my own testing.
Example Niches That Do Well on Social Media:
- Jokes / Gags
Images and Money sometimes go together.
- Fashion images affiliate linking to online stores
- Home Decoration idea images linking to online stores or content sites with high paying ads
- Product images linking to review sites monetized with Amazon affiliate links
How Do You Brainstorm Possible Niches?
You might be struggling to find a list of niches to choose from.
One useful technique is to first:
- Jot down a list of magazines or websites that you like or have read before
- Visit those magazines / websites and look at the menus
- Make a list of the items you are interested in from the main and sub menus
A general news site will have categories like:
A more specific site will have narrower niches like:
- Personal Finance
Another technique is to visit http://BuzzSumo.com
You’ll find what people are searching for and sharing the most on social media. That will lead you to some niches you may not have thought about.
Search on Facebook for pages related to your niche and get an idea how much people engage with the posts.
If in doubt pick a niche with a larger market size.
Think about traffic and monetization strategy as you are choosing a niche.
Consider your own interests and knowledge.
I’m a huge fan of the Niche Tycoon course which goes into even more detail about the value of various niches and how to build authority sites in every niche.