Home > Affiliate Marketing > How to Research a Profitable Niche Market – Part One

How to Research a Profitable Niche Market – Part One

“If you build it they will come,”  or “Simply follow your dreams and passions, the money will come.”  This advice is not only dangerous, but could be down right fatal to a start up business.  It’s particularly destructive in the online marketing world, where it is relatively easy to pour a ton of time, energy, and money into a digital venture you are passionate about without prior research – only to generate negligible revenue.

With any endeavor you must not only be enthusiastic and passionate but also well informed and armed with all the available knowledge in regards to your particular market/niche.  You must make sure that your niche has enough profit potential to meet your financial goals.  If your goal is to make money on a business, rather than spend money on a hobby, then choosing a profitable niche is absolutely critical.

What exactly is a niche?

According to Wikipedia a niche (or niche market) is defined as:

“…is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact. It is also a small market segment.”

For example, the dating market is huge.  Within the dating market, you can find niches focused on lifestyle, religion, sexuality, and more.  This also can be further drilled down into sub niches, such as “Over 40 Christian dating,” or “Under 20 Gay Men dating.”

The common misconception regarding niche marketing is that it will result in a loss of profits or that sales will become limited.  However, the truth is, having a well defined niche can give your business more power especially if your niche has enough demand and profit potential in it.

The science behind the magic of profitable niches

Finding just the right niche market can be a bit daunting and tricky.  It’s easy to fall into the trap of assuming that a market characterized by high demand alone is profitable, however that is not always the case.

Below is the basic methodology, as well as some free tools, commonly used by internet marketers for niche research.  While on the surface this approach is geared towards entrepreneurs who want to make a ton of money, but the information is also powerful if you are a brick and mortar business seeking to increase online income.

Keep in mind that niche research techniques vary slightly depending on whether you are selling digital products, physical goods, or services; however the main principles remain the same.

Step One: Who is your audience?

If you are just getting started and looking for a viable business in a market that you happen to be passionate about, rather than focusing first on what product you wish to sell or promote, first start with understanding your audience.


According to Chris Ducker, a well known outsourcing guru and Internet business entrepreneur, there are two primary reasons for this:

“Products come and go, but niche audiences stick around forever. If you’ve ever been promoting a product profitably and then had it decline in popularity (or pulled off the market entirely), you know what I’m talking about.

When you choose a niche audience and take the time to understand their needs deeply, a whole new world of options open up to you. You switch from struggling to find ideas for products, to instantly knowing exactly the types of products you should be promoting – because they’re in tune with your niche audience’s needs.”

Step Two: Research your keywords

You will want to identify what keywords your audience uses when they search for topics related to your niche market, specifically searches related to their needs and desires.  There are many places online that you can find this information, including niche forums, how-to websites, popular blogs, and “trend” websites.

A free tool to use for this is none other than Google Adwords Keyword Tool.  You can use it to identify the keywords your audience is using to search for products, services, and information related to your niche.

This tool will provide  you with a ton of useful data related to these keywords, such as local and global search volume, level of competition, and average CPC (cost per click).

It’s important to pay attention to the monthly search volume.  The higher the search volume, the bigger the market.  Anything over 1,000 exact matches is worth looking into.  However, there are some niche markets that are have possible potential as well.

Step Three: Who is your competition?

Are you in good company? Are you in A LOT of good company? Use Google’s Adwords tool to get a gauge of what the competition pool looks like.

A nice cozy lake, or the treacherous Atlantic…

You will want to strike a good balance between cozy (and attainable) and large (and profitable).

The most lucrative keyword niches are typically characterized by:

  • High average cost per click (CPC)

  • Multiple pages of ads

  • Advertisers in the top 3 premium positions

  • Ads that are highly targeted to the search keyword

Taking the Law of Attraction niche as an example.  The niche is pretty sizeable and the competition appears to be medium to low with an average CPC at less than $1.  This raises the question of whether or not this niche is profitable enough to make it a worthwhile choice.

To further research this point, you can see if there are any PPC (pay per click) advertisers bidding on the law of attraction keywords in Google Adwords.

law of attraction

The lack of advertisers demonstrates that this niche isn’t particularly lucrative.

Step Four: Research trends

Next comes the part where you dig into the data to determine whether your niche is rising or falling in popularity. It is fairly well known that the attention span of the average web surfer is rivaled by your common house gnat. and when a topic was “hot” last week, that is NO guarantee that people will even care about it NEXT week.  Google Trends is a great free tool to use for this.


Google Trends


Google Zeitgeist 2013


Step Five: Decision time

Ok, by now you have the beginnings of an understanding of what makes the particular market (Niche) tick.

You’ve heard the problems, you smell a bit of money, so its decision time.

Do you jump in and play, or not?

There are formulas and stats and they make fine rules of thumb, but another measuring stick I advise using is…

Your gut!

Is this a topic you’re a little jazzed about? Will the world be a better place if you are in there making the knowledge (and product) pool just a little deeper?

Hopefully so. I mean, lets face it, you might could make a lot of money promoting payday loans, but does the world at large REALLY need your help to commit financial suicide??

Bonus! Amazon

Much can be learned from a trip to Amazon! Once you home in on your niche using the methods listed above, go over to Amazon for some extra finessing…

Type in keywords related to the niche. Notice what products come up, take note of HOW MANY products appear.

Here is where the fun REALLY begins: look at the reviews for popular products associated with the niche. take note of the ultra positive reviews, what are they saying they like? What information or benefits seem to matter to the reviewer?

Equally as valuable, look at the Negative reviews as well. What did people NOT like about the product in question.

If you have a sharp eye, you may just discover a need or problem people have regarding the topic.

A need or problem YOU can solve!

In Conclusion

Really the BEST advice is to just GO DO IT already! thousands of potential success stories die on the vine every single day from people that plan to “get around to it” one day.

It’s fascinating research, you can learn a lot and with a little work, EARN a lot while you are at it!

4 thoughts on “How to Research a Profitable Niche Market – Part One

  1. Caitlynn,

    Thanks for your opinion on researching for niche markets. It is always worthwhile getting more ammunition to add to my research arsenal

  2. I’m sorry to sound little off topic, but i gotta tell you that pretty much nothing in this world will come to you free of charge. You have to fight very hard if you wish to make it. The exact same idea is true for making money. Work very hard and for sure the successes will show one day.

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