Finding Your Niche

Finding Your Niche

Posted by Tekime
February 21, 2007

Want to earn $10,000 this month? $50,000? If you want to earn the big bucks, you need a niche that spells success. There is an endless supply of information on promoting your Web site, but Webmasters often struggle with the most important step: deciding on their niches.

It can be a challenge to select a niche for your Web site that will lead to success. Even an abundance of knowledge on a given subject and the best Web site in the world will not guarantee success if nobody is interested. You could know everything there is to know about chicken acupuncture, but there probably aren’t many folks interested in needle therapy for their chickens. No customers = no business.

So, what is the best niche for you? I like breaking things down into their parts before moving forward. When we ask what is the “best niche”, we need to have a solid understanding of what each of these words means. “Best” is a relative term, and the best thing for you might be the worst thing for me! When we say “best”, what we really mean is “most profitable”. A niche is a specialized group of customers that share a common interest, for example knitting or health foods. Thus, we want a highly profitable group of customers to target that we can monetize effectively.

In a perfect world you and I could determine the earnings potential of every niche and select the best ones. But in reality, determining how much profit can be earned from a given niche depends on many factors. I find the following three are critical factors:

Personal resources
Niche value
Competition

Let’s examine the three factors I listed in a little more detail. Understanding and researching these can give us the data we need to find a niche with real potential.

Personal resources
This is an important place to start. Analyze all of the resources you have: existing Web sites, friends and associates in the business, and of course money. In order to compete we must know our own strength. What are your specialties and skills? Can you develop unique content for a niche that people will love? A unique service you know everyone wants? Have a marketing tool that will give you an edge with certain customers? What kind of budget can you afford, and what do you expect from it? Ask yourself these questions and begin to feel out your competition so you can understand your strength in the “big picture”.

Niche value
The value of a market is a combination of the size of the market and the monetization value. 1,000 clicks per day at $.50 per click is as valuable as five sales per day at $100 per sale. How much can be earned through PPC, affiliate programs and other advertising methods for each conversion, and how many people are converting?

Competition
The strength of existing competition needs to be considered against your own resources. If you plan on competing directly in a given niche, you can easily burn through your resources and make little progress when you’re up against an established competitor. If you are interested in an existing niche but worried about your resources, think about carving out a new sub-niche and offer something new that is missing from the current market. The strength of individual competitors can be incomparable to the strength of thousands of lesser entities. Market saturation is the result of too many competitors, and often in order to compete in an already saturated market you need to have massive resources to carve out a substantial chunk. The value of a truly saturated market is often hard to monetize effectively and strong earnings can’t be expected unless there is a specific plan to convert at a higher rate.

So, how do we gather this information? This is the real challenge. It can often be overwhelming to find meaningful data, and many who are successful have honed their technique and research tools. Effective tools are an important first step to understanding your own resources, market size and niche potential. Finding and discovering new niches is often a process of trial and error, as well as intuition and active pursuit of unique new ideas. It usually begins with building on your own personal niche interests.

Determining how to monetize a particular niche will depend on your personal preference as well as opportunities and their value. Research affiliate program payouts, experiment with PPC payouts, and collect data from various test projects if you really want to analyze the potential of a given niche before dumping all of your resources into it. Ask other niche members, and exchange personal resources.

Here are some sites to start exploring which can be added to your arsenal:

It’s often recommended to pursue a niche that you have some interest and knowledge in. I fully agree that you should take advantage of the resources and knowledge you have to the fullest extent, but getting stuck in this mindset can sacrifice many opportunities. Researching, learning and probing into new territory are in the spirit of Webmastery. When you are putting your resources or even your way of life on the line, it’s best to start by utilizing the resources you already have.