While it's true that the number of niche ideas is practically limitless, there is still a basic principle you need to base your research on when choosing your niche market.  You can promote whichever product and/or service you want, but make sure that there is a demand for either/or.  Whatever you are offering should be something that people are looking for, something that will somehow enrich their life or make their life easier.  Something that will make them look better, feel better, solve a problem, entertain them, earn them money and so on.  Any of these things are always in demand.

Once you have pondered over your niche ideas and decided on which product or service you want to promote, you need to research your niche market.  This research will provide you with a foundation for your niche marketing program.  So, what do you need to find out?  You'll want to get a sense how many people on average are searching the internet for what you plan on offering.  Then you need to determine what kind of competition you'll be up against, because chances are several internet marketers have the same idea as you and have already devised a niche marketing strategy of their own.  By competition we mean how many niche websites there are that you will need to beat out to reach the top of the search engine results pages. 

You'll also want to determine how much you should charge for your service or product.  To do this you can look at competing products and get a sense of what is a reasonable price.

Once you have come to the conclusion that there are people searching online for what you have to offer, and that they are willing to pay for it, you know you have potentially viable niche ideas and that your niche marketing strategies should work. 

Of course, when it comes to online or internet marketing, there are other ways to earn an income.  You don't need to be a product creator or a service provider.  You can also create a niche market around other people's products and become an affiliate marketer.  In this case, you still need to do the same research, but that's it.

 
 
If you haven't heard the word 'niche' being batted around by Internet Marketers then you haven't been listening. Finding a niche has become the antidote to competing in overly saturated online markets.

What is a niche?

According to Merriam-Webster's Online Dictionary a niche is described as "a place, employment, status, or activity for which a person or thing is best fitted... a specialized market".

Have you noticed that despite the closing of many businesses in these harsh economic times, the local hobby train store is still around? That the 'hole-in-the-wall' eatery is thriving? Or that trends such as scrapbooking can start with a bang and still close within a year when four similar businesses start up in the same area?

The online business world reflects the same trends as experienced in the offline world - often with faster turnover and startup rates. Those who promote a product or site that targets a small, select audience can tap into a market that is otherwise not being served. Despite the limitations of the client base, the targeted nature of the business creates a devoted and active market - the aim of any business.

HOW DO I FIND A NICHE?

Finding a niche requires diligent research. Whether you have access to software that harvests and sorts information or you take a manual approach you must first start with ideas.

With a pen and paper (or computer, if that's more comfortable) brainstorm a list of businesses, products and industries. Create a list of keywords and phrases you think would be used by individuals looking for these items online.

Use a software program such as Wordtracker or a free resource such as the Overture Keyword Selector Tool to find keywords for your niche that have a high amount of traffic.

Although a program like Wordtracker makes it easy to find details such as how many sites compete for that market, you can also do your own research.

Concentrate your attention on question phrases such as "how do I..." or "where can I...". These questions will clue you into potential markets that need servicing.

Next, look in Google Answers. Type one of your keywords into the search area. What questions are being asked and how much are people willing to pay for answers? If you find a group of keywords with a high number of questions then enter these words in your browser's search engine.

What sites come up? Do they provide answers or solutions to the problem? How are they making money? Can you see an opportunity to service these individuals?

Finding a niche can open the door to a profitable online business. Research the market and be certain that your product or service is valuable to this group. Find forums or groups that target this audience and pay close attention to their concerns.

If you can help these people you WILL make money. The best of both worlds!

Looking for some niche ideas of your own?  Check out Niche Initiation!