How to Find a Profitable Niche Idea For Making Money Online

Making money online is tricky.

If you don’t work smart, chances are you won’t make enough money to create a sustainable income through blogging and creating websites. It takes patience, hard work and also a heck lot of smart work to get there.

I have done my fair share of mistakes and hence decided to create this website so I can share those mistakes with my readers.

One of the mistakes I did in the initial days of my blogging career – I did not focus on niche websites and poured all my efforts in two main websites I started.

It felt like a good idea back then. Create one strong revenue source first and then use it as a stepping stone to create more sources. But I was wrong.

The moment there was a change in Google’s algorithmic and a big shake up happened, my two big sites crashed. I lost 80% of the traffic I had built over the years and was shattered to pieces. All the hard work I had done so far simply disappeared.

That is the time I realized how important it is not to bank on only one website for your revenue and income. Yes, you can make decent amount of money from blogs but depending on only one source can be very, very risky. It doesn’t matter how authority your website is since Google and other search engines don’t really care whether you are a big site or whether you are a small one. They will simply update their algorithms and if the axe falls on you, you are done.

When it comes to making money online from content sites, I belong the following school of thought.

It is far better to create 20 small websites with decent traffic than one large website with great traffic. Yes, you can focus on building the large site but don’t try it in the first go. In the first go, grab the low hanging fruit and create as many low hanging fruits as you can. That will bring a diversified income and it will create a sustainable business. When you have 10 different income sources from different sites, then go ahead and pour your energy in building the large site.

There are bloggers who have created a large site first and then diverted their attention in building small niche sites. That worked for them but it may not work for you. You don’t know what is going to work for you. My advise here is to create 5 small sites first and generate revenue from each. Once that happens, then create the 6th site and make it big. If the sixth site falls, you have 5 options to fall back to.

What is a Niche and Why it helps to find a “Profitable niche idea”

You will hear this word “Niche” all the time. So what is a “Niche anyway?

A “niche” or a “Niche website” is a typical website which focuses mainly on a very small group of people with a specific interest. You don’t go loud after the larger market. You just carve out a small slice from the larger pie.

Niche and Total Addressable market

I will share this with an example.

Let’s say you have a website on watches. You love writing about watches available all over the globe. So “Watches” is the total addressable market here. It’s big and in demand and there will always be demand about watches. A good number of people will always search for different types of “Watches” online.

How do you know this market is big enough? How do you know if a specific keyword has a big enough market? You just go to Google Adword Keyword Planner or other Keyword tools such as SemRUSH and see how much in demand this keyword is.

You find out the answers to the following questions

  • What is the average monthly search for this keyword? It is above 50K?
  • What is the suggested bid for keywords in this niche? Is it close to a dollar?
  • How much money are advertisers willing to pay for displaying ads around this niche?

If you see that the average monthly search volume is high enough and advertisers are willing to pay at least $1 (look for the data in the suggested bid column), then it validates that the keyword has a very big market and it is indeed a good business opportunity.

See the screenshot below

As we can see, the keyword “Watch” has a very high average monthly search volume of 1 Million to 10 Million search per month. That’s very high which means, a lot of people are searching for it all the time and ever single day. These are potential customers and if you have a good business about “Watches” you will likely hit a jackpot.

But hold on, look for the data in the “Competition” field.

Every single word in that market is highly competitive and a lot of people are competing to get rankings for those keywords.

So just because you found a ¬†keyword which has a very big market, doesn’t mean you can carve a business out of it. You will need to beat competition and outrank the bigger and already established players. That’s quite difficult since they will not sit idle and they will also try to beat you.

This is when we come out of the idea of a “Niche website”.

A Niche website¬†is the site which doesn’t address the total addressable market but picks specific market opportunities from the larger market and makes the most out of it. A typical niche website focuses on keywords which has “good enough” demand and low competition, thereby allowing the business owner to find his foot in the market.

In this example, this is a good example of a niche keyword – “Korean watches”

Example of Niche Keyword

Why this is a good niche?

  • This keyword comes from the larger market slice of “Watches” and focusses only on a small part of it – “Korean watches”
  • The competition is “medium” which signals there are not many people fighting for it.
  • It has good enough demand – the monthly average search volume is not that low and neither very high.
  • There is no site which specifically focussed on korean watches. Yes, there are ecommerce sites which focusses on this category but I could not find a “Niche website” dedicated for korean watches.

So this makes for a viable opportunity for you to create a website on “Korean watches”, since there is a window of opportunity there.

In this case, the business opportunity lies in having the first movers advantage and creating a niche website which focuses extensively on Korean watches. If your website has good enough material on Korean watches and slowly emerges as the best possible resource people refer for buying and learning more about that particular segment, gradually it will turn into a viable business.

However, if you focus on the total addressable market of “Watches”, you may not make it there. This is because there are hundreds of thousands of sites competing for that particular keyword and it is indeed quite a task to make your place up there.

So How do You Find a Profitable Niche Keyword for Making Money Online?

To summarize our learnings, here is how you find profitable niche keywords for setting up niche websites

  • Find a profitable market first. If you can’t find a profitable market, you won’t find a smaller profitable niche. In this case, the profitable market for us is “Watches”.
  • Observe trends in that market. Use Keyword research tools to figure out opportunities which have good enough demand and low competition.
  • Research more on this market. Try to see if there are already existing resources about that niche online. How big are the players? How many players are there? If there are only a couple of players, then you can become the third one and find your place up there. However, if you be the 157th player and try to work your way up, it’s quite difficult.
  • Find products and services which you can offer in that target niche market. How are you going to monetize your offering? Will you write content and monetize with Google Adsense and other contextual ads? If that’s the case, use Google adword keyword tool to see how much advertisers are already paying for the keywords sin your niche market. If you are planning to use Affiliate marketing, find out relevant affiliates in that target market. If you are planning to sell your own products and services, find out what products and services you are going to sell and validate whether people are going to buy it or not.

After doing all the research as I have stated above, you should pin point your idea of a niche website. After you have built a niche website and monetized it, you will learn the tricks of the trade.

It won’t be easy. I have made around 10 niche sites and have failed in 8 of them. The success ratio is again 80 – 20. You will never know which niche sites will bring you revenue until you give it a try. My experience tells me that small niche sites which have affiliate products and paid services around them convert the best. Google Adsense also works good for small niche sites but since Adsense depends heavily on traffic and pageviews, you will have to keep updating the site to get fresh traffic. Affiliate sales depends on reputation, authority and other things so if you can build a niche site and sell Affiliate products, it should work out well compared to a niche site which earns money only through Google Adsense and other contextual ads.

With time and enough practice and further iterations, slowly you will have the knack of it. You will slowly understand which niche is a good niche and which niche is a not so good niche.

How do you find profitable niches for making money online? Please share your ideas in the comments section so we can learn from you.

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