Profitable Niche Market Selection

The task here is to find key phrases within your niche topic which have good search volume and not too much competition. I've covered this in more detail in my lens on Keyword Programs, but the short version is to:

1. Find lots of key phrases or search terms that people use to search within your niche topic

2. Check how many times each key phrase is searched for (search volume)

3. Look at how many niche websites are optimized for each key phrase (competition)

4. Look for phrases with the best combination of high search volume and low competition.

If the niche you are researching just doesn't have any key phrases with good search volume and low enough competition, then you may have to pick a different niche.

There are many niches with high traffic where it's very hard to get people to spend money. They are simply looking for free information, and there's plenty out there for them to find. These are not good niches for you to target as a business except in special circumstances.

How do you find out whether people will spend money in your niche?

One indicator is the number of sponsored ads in the search engine result pages on your topic. If there are many, and they stay around for extended time periods, then they must be making sales and therefore people are spending money.

The most direct way to find out, however, is to test. You can do this with a minimum of time and money invested in a number of ways.

One free way is to set up a Squidoo lens (you're here, after all!) and use it to advertise eBay auctions, Amazon products, or affiliate products from places like Clickbank. This is completely free and only requires an investment of time and effort on your part. You can do something similar using a free Blogger blog.

If you have a bit of money to spend you can buy a domain name, set up a free Wordpress blog on it, add some simple affiliate links to Amazon or Clickbank products, and drive traffic using Pay-Per-Click advertising like Yahoo or Google Adwords. Limit your budget and watch carefully to make sure you don't overspend on your PPC advertising.

Alternatively, set up the Wordpress blog on your own domain as above, add Adsense ads to it, and drive traffic using methods other than PPC.

Any of these ways will allow you see whether people spend money or click on ads, and so give you a basis to decide whether this is likely to be a profitable niche.

Almost every method of site building and traffic generation requires somebody, somewhere, to create content. Not necessarily written - it could be spoken audio, video, music or pictures. Not necessarily you - you can buy content, license it, or hire someone to produce it for you.

But the niche has to be one that you can get content for.