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One of the benefits of the Internet is that you can research anything you are interested in. There is an expansive feeling of knowing that vast quantities of information on practically any subject are available at your fingertips. All information has value, but not all information is valuable i.e. people will not pay money for it.

This is the trap that many fall into when starting out online, believing that a certain type of information is profitable when in reality it is not. The difference comes down to selecting a niche market and determining whether it is profitable or not.

What you will learn

  • What a niche market is
  • How to select your target audience
  • How to identify a profitable niche

What is a niche market?

A niche market is simply a smaller segment of the larger market which focuses on a particular area of interest or demographic. Let me illustrate with two offline business examples in the food stall industry.

Business #1 opens a food stall which offers various items including chicken sandwiches, beef burgers, veggie burgers, fish sandwiches, salads and wraps.

Business #2 decides to “niche down” and selects only fish sandwiches to specialize in. They are able to focus all their effort into making the very best fish sandwich possible, much better than business #1. The final result: people are willing to line up for 45 minutes for the food.

long line up

Why is this important? When you narrow your focus and select a more defined area of interest, your effort goes further and a brand begins to form around you. You become known as the “fish sandwich guy” or the “3D printing guy” or the “podcast girl”.


Choosing your niche

Before selecting your niche market and the products or services you wish to sell, we need to look at the people side of the equation. Here is an excellent quote from Chris Ducker that explains why the people are more important than the products.

“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.”

With this in mind, there are two main groups of people, you and your audience.



Businesses are long term ventures which require work and dedication. In many cases there is a prolonged start up period before the first profits come in where entrepreneurs can lose hope and give up. Passion or interest in your niche is extremely important during this time as a non-monetary form of motivation, without it success is very challenging. The first step is to determine what niche you are interested in by answering the following questions:

  • What do you like?
  • What subject are you interested in?
  • What do you spend your free time on?
  • What type of products and services do you buy?
  • What audience do you represent and can most relate to?

Spend some time thinking about these questions and write out a list of all answers that come to mind for each question. As you compare the answers, some niches or topics will appear more frequently. Start with the one that shows up the most.


Your audience

Now that you have a starting point for your niche market based on your own preference, it is time to see what everyone else thinks. This is important because you can be extremely passionate about a subject that is not very popular or that is popular but not profitable.

For example, someone may love skipping rocks across a pond, but selling an eBook in that niche may not sell well due to lack of popularity and lack of willingness to pay for such information. The popular “do what you love” saying comes with caveats when it pertains to business.


Image credit: www.markstivers.com


Test popularity

For the purposes of this exercise I will use the niche “solar power”


Google check

With Google there are two metrics to give you a sense of the size and popularity of a niche market.

  1. The amount of information that is available i.e. search results
  2. The number of people searching for this information

You are probably familiar with the first one and have seen it on a regular basis:



A Google search for the term “solar power” returns over 85 million results which is a good sign of popularity due to the quantity of information available.

Next, we will do a bit of keyword research (essentially looking over Google’s shoulder) using Google AdWords Keyword Planner. It is free to use, simply sign in with your Google account information. This next step will allow us to see how many people are searching for information on our particular niche.





The average monthly searches for solar power related terms are in the millions which is another confirmation of a popular niche.


Facebook check

Next let’s check Facebook for social media engagement. A quick search for “solar power” brings up some groups related to this niche, the largest being Solar Power World with over 250,000 fans. There is social popularity.



Amazon check

The final test for niche popularity is whether or not there are any related items listed on Amazon. Sure enough there are nearly 400,000 items for sale on Amazon across all departments, with 25,000 of those being books on solar power.




Get to know your target audience (very important)

I can’t over emphasize how important this step is. Building up a detailed understanding of who is in your target demographic will allow you to make informed decisions on what products and services to offer which will solve their problems, and how to best present that solution.

So how do you know who is in your niche audience? To begin building up a picture of your target audience there are a few websites which give preliminary details. From there it is a matter of refining the information based on your own observation.


High level overview


Google AdWords Display Planner

Head on back over to Google AdWords and select Display Planner from the Tools menu bar. Run the same keyword again and you will be able to see some information related to age range, gender, device and related interests. This is what it looks like for our solar power example.




Going back to the original Google search results, we can pick one of the first websites and do an analysis using Alexa.com.

From here we can pull out data on the audience geography, gender, education and browsing location.




As the name suggests, SimilarSites gives a list of similar websites to the one entered on their page. A section is available that shows other areas of interest to the main topic.



Fine tuning your target demographic

By now a general idea is beginning to form about the target demographic. Now it is time to fine tune it by comparing with on-the-ground information. The best way to know your audience is by interacting with them which will involve the following:

  • Read and comment on related blogs
  • Join Facebook pages
  • Visit forums
  • Look at product review comments


As you go through this process and make a note of the type of people you are interacting with, update the high level picture. By going through this iterative process you will gain a better understanding of your audience and be able to fill in information such as:

  • Gender
  • Age
  • Location
  • Interests
  • Values
  • Stage of life (i.e. single, studying, married, parents, retired)
  • Products they are buying and the price point


Identify the pain points and goals your niche market has

Having gone through the steps above you will have started to notice some of the most common recurring problems facing your audience as well as their goals. You will see these reflected in the popular blog posts, comments, Amazon reviews, most engaged Facebook posts, Yahoo and Quora answers and in forums.

Make a list of the pain points and the goals. In our solar power example a pain point might be obtaining solar financing, while a goal might be to have an electricity bill of zero.


How to know if your niche is profitable

You have your customer profile for your niche and have identified their problems. Now it is time to see if anyone else is meeting this need by providing solutions and more importantly if your target audience is buying.


Google ads

One of the fastest ways to see if a niche is profitable is simply to do a Google search for the niche and see if there are any Google ads at the top and on the side of the page. Advertisers are willing to pay money to get in front of prospective customers. For our solar power example there are a number of advertisements.




Next we head back over to Amazon. As we saw earlier there was a large quantity of items available for purchase and now we can see that those items are being bought due to the reviews. In addition there is a sponsored items section which indicates that sellers are willing to pay extra to have their items displayed on the page.



Affiliate programs

Profitable niches will typically have affiliate programs in place to help market products and services. Google “your niche affiliate” and see what results show up. A “solar power affiliate” search brings up an entire first page of solar affiliate programs and Google ads.



Repeat as necessary

You may need to repeat this niche selection process a few times until you refine exactly which one you want to pursue. This may seem like an arduous process but it is the most crucial aspect of building any business, online or offline.

I believe at its core business is about helping people. The more in tune you are with your target audience, the better you will be able to serve them and they will resonate with your communication regarding the product or service being offered.

What niche did you end up selecting?

How many different niches did you go through before deciding on that one?

Please leave a comment, I would love to hear your experience with niche selection!