Finding an Online Niche to Make Money

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Since this article is pretty long, some of you may not have the time to read it in its entirety; for that reason, I have posted a quick summary at the end of this article.

I initially started researching online business about 2 yrs ago. I learned all the keys to creating a successful website, however, I failed to take many of those keys to heart. I established my first ecommerce affiliate website at the age of 17. On the site, I sold website templates. For any of you who know anything about the web development industry, you know that this industry is packed like a can of sardines. Google "web design" minus the quotes and you'll be overwhelmed with over 1,800,000,000 results. That's not even funny. I was one of those inexperienced online entrepreneurs who thought, "If I get a site out there, people will come. If people come, they will buy." Sorry, but that's not the way it works. Becoming a millionaire was harder than I had first thought. Needless to say, my first website failed miserably considering I had about one visitor a month.

Let me tell you how it really works. If you get a website out there that's focused on a well-researched niche, visitors will come. Will they buy? That's a topic for another article. This article will focus on potentially the most important aspect of online business-finding a great niche. Once you find that niche, you will be able to capitalize upon it and earn some good money. I will quickly cover the following:

1) What is an online niche?

2) How do you find a money-making niche?

3) Setting up a Niched Site.

1) What is an online niche?

An online niche is a targeted segment of the online market that has enough demand to warrant suppliers but not enough suppliers to fulfill that demand. In other words, it's an online market where consumers are currently being underserved. Suppliers could potentially benefit from addressing the needs of those customers. This is where earning money comes in.

2) How do you find a money-making niche?

Finding a niche that has earning potential isn't always easy. If it was easy, there probably wouldn't be too many niches because they'd be easy to spot and shortly filled (which gives you a paradox because they're no longer easy to find, lol). Thus, finding a niche takes time, patience, and a good eye. If that doesn't sit well with you, perhaps you're not cutout for online business or any business for that matter. When it comes to finding a niche that has earning potential, the steps you must take make a lot of sense:

1) Determine the demand for a given product or service (may include information).

2) Determine the earning-potential from that demand.

3) Determine the number of suppliers and evaluate whether or not you have a niche or not.

To determine the demand for a product or service, you must start researching. On the web, demand is often determined by the number of people searching for something. The primary place people go to search is search engines. Thus, we determine demand by researching "keywords" or "keyword phrases" that people have used in search engines. There are a variety of places you can go to do keyword research. The best places to go include Yahoo!'s Keyword Selector Tool and Wordtracker where you can use a free trial. If you go to either one of those places, you can determine approximately how many people are searching for a given keyword or keyword phrase. So if you're interested in having a website on the topic of "necklaces," you would begin by searching using this term. The results given by the two tools above would be your demand. Now, you want to determine what else people searching for "necklaces" are searching for because not only is this probably to broad of a topic for your site (and not a niche) but also, when you setup your site, you're going to want to have pages that target keywords related to your main topic so that you can get visitors into your site. Thus, if you go back to those tools above and do the search, you'll see that you're not only given the results for the keyword you searched for but also keywords related to that keyword. You'll want to write these down, along with their demand numbers, preferably in a spreadsheet. Then, you can also go to Google Suggestions and do a search for related keywords which you'll have to find the demand for later. In all, you want to get a general feel for the kind of demand that's out there for your idea. After you have an idea of what kind of demand is out there, you must determine whether or not you have an idea that can make money.

Unfortunately, there's no easy formula that will tell you just how much a site can earn for a given niche. The earning potential of a market segment with very low demand could be greater than the earning potential than a market segment with high demand. For example, if you find that 5,000 people/month are searching to buy home-made necklaces, you may be able to make some money out of that. However, the prices for such necklaces probably wouldn't be so high which means that you'd have to sell a lot of them to make a decent profit. On the other hand, if 500 people are searching to buy basketball hoops, your margin and profits automatically go up. Now, don't take these example literally, first of all because they probably aren't niches and second, because it makes it seem as though "selling the product" is the only way to earn money from the site when in reality, there are money other ways. You can also earn money via affiliate programs. Typically, you're not going to be selling your own product. If you're like me, you simply want a way to earn money even though you don't have a product. That's where affiliate programs often come in. If you want to sell basketball hoops, chances are that you can do a Google search for "basketball hoop affiliate program" or something similar and find a distributor that will pay you commission for selling their products from your site. You can also earn money through advertising. If you get visitors coming into your site, you can often find businesses that are willing to pay in order to be listed on your site for an advertising fee. Also, there is Google adsense that can earn you some good money. Generally, you can almost always find a way to make money off of a site if you can get visitors in; so you shouldn't be entirely worried about how you are going to earn money but rather if you can.

If you can is usually determined by the number suppliers. In the beginning of this article, I mentioned that if you Google "web design," you'll find yourself face to face with over 1,800,000,000 results. This is the number of suppliers. The key to finding a niche usually includes determining whether or not the demand/supply ratio is appropriate enough to warrant your investment. That is, if you have a ton of people looking for a product and barely any suppliers, there's a good chance you've found a niche. On the other hand, you might find yourself with a low-demand market that is accompanies by high supply. Your best niches come from markets that are high in demand and low in supply. We've already covered how to determine the demand of a market, and I've quickly mentioned how to find the demand. If you go to Wordtracker and go through the whole process of choosing keywords and so forth, it will also give a KEI computation which is some calculation of the demand vs. supply. You can also approximate the supply for individual keywords by doing what I said above and simply searching for your topic in Google. The big question now is "How much supply is too much supply?" Unfortunately, that's a hard question to answer because there are many factors that can play a part in the answer. However, ideally, if you want to get some decent rankings in the search engines, the supply for a given keyword should be under 1000 if it is searched for in Google. This, though, is a rare occurrence, and that is why you set up your site in such a way that your main topic, the topic of the site, has higher demand and higher supply whereas the topics related to your main topic are focused on areas that have higher demand, lower supply. This brings me to my next point: Setting up the Niched Site.

3) Setting up a Niched Site.

After you do your research, you typically find that you have some general keywords that have high demand and high supply and then some potential keywords or usually keyword phrases that have high demand, low supply. Your site will be set up in such a way that the main topic of the site, usually a more general keyword, becomes your homepage and all the related topics that are focused on the niched keywords stem off of that homepage. As a result, you often find that your secondary pages make it to the top of the search engines before the main page does. This is fine. They are the pages that bring in the visitors, and as a result, the money making potential. The biggest part to setting up a niched site is this: Keyword Focused Content. You know those keywords you gathered? Well, those keywords will be absolutely useless unless you use them wisely. You must now take those keywords and build content with them. Content that will be useful to visitors and content that is Search Engine Optimized so that it will rank well in the search engines. Offline, the mantra goes, "Location, location, location." Online it is, "Content, Content, Content." If you don't have content, you don't have visitors.
And that's all I can go into at the moment. Hopefully, if you're looking to establish an online website, you can do it successfully the first time which starts from finding that perfect niche.

SUMMARYIn summary, this article focused on the three following topics:

1) What is an online niche?

2) How do you find a money-making niche?

3) Setting up a Niched Site.

An online niche is a targeted segment of the online market that has enough demand to warrant suppliers but not enough suppliers to fulfill that demand. In other words, it's an online market where consumers are currently being underserved. Suppliers could potentially benefit from addressing the needs of those customers. This is where earning money comes in.

Finding a money making niche means determining what you are going to sell based upon three factors: First, there needs to be sufficient demand for a given niche because that demand will be your source of revenue. Second, you need to make sure that your niche has potential to earn money. This means that if you plan on selling a product, the product margin times demand must be great enough to bring in the desired revenue; if this is not great enough, you only discard this could-have-been niche only if you cannot think of additional ways to bring in revenue. Further, since not all sites sell products, you may have trouble finding possible monetorization routes. That is, if your site is information-based, it will be more difficult to earn money. If this is the case, it may not be a good niche. The third part of determining a niche is that the competition/supply needs to be low. The ideal niche is high in demand, has high earning potential, and low supply/competition.

Online, to determine demand, one needs to do keyword research at places like Yahoo!'s Keyword Selector Tool and Wordtracker where you can determine the number of people that search for a given keyword or keyword phrase each month.Earning potential is subjective and must be determined by you.

Supply is based upon doing keyword research based upon the number of results returned from searches most likely done at Google. That is, if your niche is "used gibson guitars," you would do a search on Google to determine the number of potential competitiors (the number of results returned).
About the Author

Occupation: Entrepreneur

Majoring in Accounting and Economics, Eliot Wasmund is an avid student of business. He is an investor and entrepreneur whose goal is to build a substantial passive income before his graduation and enjoy life at the same time.

http://www.eliotwasmund.com

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Tags: google, web design, money, marketing campaign, niche, templates, setting up a website, heart, pockets, quotes, segment, affiliate website, becoming a millionaire, sardines, web development industry