How to Determine if a Niche is Profitable

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Niches are everywhere. They are floating in the air, they are sitting in your living room. In fact, what you are reading right now is a niche. There are certainly no shortage of niches within the online world, but how does one determine if it is a viable niche to pursue? Today, I am going to teach you how to determine if a niche is profitable.

Step 1: Initial Keyword Research

After reading the paragraph above, you may be looking around you with newly opened eyes (you know.. like the Matrix), and for good reason. Some of the most profitable niches I have ever discovered have started out the same way – through everyday life experiences. Before you dive into that sweet looking niche you may have found, it is important that you know exactly what needs to be done next in order to determine if a niche is going to be profitable.

This is where keyword research comes into play. After you’ve identified a potential niche, you need to start doing a little bit of research to determine if there is an online audience looking for products related to the potential niche. For that, you are going to need a quality keyword tool. Personally, I like to use a keyword tool called Jaaxy for my niche research.

After looking around my office, the very first thing that I see that may be a potential niche are computer speakers. So, with Jaaxy in hand let’s take a look and see if the computer speaker niche could be potentially profitable.

Jaaxy Results for Computer Speakers

As you can see above, there’s quite a few monthly searches for computer speakers, but there’s also quite a bit of competition. Inside Jaaxy, this is called QSR which means “quoted search results” and it is a metric to determine how many other websites in Google are trying to rank for that keyword.
When doing keyword research, I prefer to have a QSR below 200, but with the primary broad keyword such as computer speakers, you can normally expect to see above average competition.

Thankfully, computer speakers does appear to have a pretty decent search volume for the term with more than 7000 people looking for speakers. This means we can expect to find other keywords that are less competitive.

By taking a dive just a little bit deeper into the research, we should be able to find a smaller sub niche within the computer speakers niche that we could rank for.
After just a little bit more digging, I found several keywords that would be able to be ranked for in the computer speaker niche. Below, you can see just a few of the results that I was able to find:

Jaaxy Results for wireless computer speakers

These keywords still have pretty good search volume, and with the low QSR competition, these should be fairly easy to rank for. Since the search volume for several terms is well over 100, I should be able to have enough traffic to the site through long-tail keywords to make several sales.

Now that I’m able to see that there’s a relatively low amount of competition going after my keywords, but not too much that I wouldn’t be able to rank, I want to take a look and see if advertisers are bidding on keywords inside of the niche.

Step 2: Look at Ads Within the SERPs

As you can see below, a quick search for wireless computer speakers shows a Google Store ad, as well as one additional ad before the organic search results, and one at the bottom of the search results. This tells you that there are people paying for Pay Per Click ads, which means that there is definitely a profit to be made within the niche.

SERP Ads for Computer Speakers

Plugging in just a few additional search terms from my above keyword research, I also noticed that there were ads for just about every term I had found. This is actually really good news as it does show that people are willing to invest heavily in PPC for traffic in this niche.

Now that I know people are willing to buy ads, let’s take a look at how much traffic some of the higher performing sites are seeing, and even better, what keywords they are seeing the most traffic from.

Step 3: Using Authority Sites within SERPs for Some Keywords

While looking at the SERPs for “best pc speakers” I stumbled across a nice niche site called Sound Guys. This site is specifically dedicated to helping their audience find the best headphones and speakers currently available on the market.

So, let’s take a quick look at some of the ways that you could analyze the site in order to get keywords and content ideas.

First, let’s look at some of their posts and URL’s. Reading through some of the post titles on their blogroll, I’m able to quickly identify a few possible keyword ideas such as:

  1. Best bluetooth speakers under 100
  2. Best AirPlay speakers
  3. Best waterproof bluetooth speakers

Aside from the “best of” posts on the site, there are also numerous product reviews and an impressive amount of informational articles.

But how can you go from knowing what keyword posts are targeting to seeing which ones are actually bringing the site traffic? Well, that’s where a wonderful tool called SEMrush can actually help you out. Let’s take a quick look at what SEMrush can tell us about the pc speakers niche.

Step 4: What Does SEMrush Say?

When you’re analyzing a site using SEMrush, the first thing that you’re going to see is its’ estimated organic traffic. This site brings in an impressive amount of traffic estimated at 175,00 visitors per month as you can see below.

SEMrush results for Organic Search Results

Looking a bit further down in SEMrush, I can see that the site is ranked for over 35,000 keywords and has several other sites that are considered to be organic competitors. Best of all, when looking at their competitors, you can see that there are sites at all levels that have varying amounts of keywords that they are ranking for.

SEMrush Main Organic Competitors

This tells me that there are sites of varying sizes that are ranking for keywords in this niche, which ultimately tells us that we can also enter into this niche with the right keyword strategy.

Step 5: Are There Other Affiliate Websites?

One other thing that I like to look for in the SERPs are other sites that are easily identified to be affiliate websites. Since one of the largest sites I found was an affiliate site, it was easy to identify that this niche has multiple affiliate sites of all sizes. While some people will say that this means the niche is too competitive, I have to disagree as there are normally thousands of potential keywords in every niche out there. It is almost impossible for every keyword to already have too much competition.

Also, in most niches, there are ways to create smaller sub-niche style sites that target one specific area of a niche. In this example, waterproof speakers would be a niche all its’ own as would bluetooth speakers and surround sound speakers. When you see multiple affiliate sites in the SERPs, it’s actually been my experience that it’s a good thing as people who are running affiliate sites wouldn’t keep it up if they failed to make any money.

While we now know that there is profit to be made in this niche, I’m sure that you’re wondering how much. Since our goal with this site would be to educate people on computer speakers while also helping them to learn more about them, we are most likely going to be monetizing this site using Amazon as it is the most trusted website where people go to make online purchases.

Step 6: What is the Commission Payout?

Since this site is going to be making the majority of its’ revenue from Amazon Associates links, I need to check and see what the commission tier is for pc accessories after they changed their commission structure earlier this year.

After pulling up the fee schedule, I can see that for pc accessories, the commission tier will be 2.50%. Now that I know how much we can expect per sale, let’s take a look at the average price for some of the best-selling pc speakers on Amazon.

When you’re conducting your own research, you want to find at least a few products that are selling for about $100 and several more right around the $50 mark. This allows you to still earn decent commissions for your sales. This is especially true if your category is between 2.00% and 3.00%.

Pulling up the bestsellers in computer speakers on Amazon shows that in the top 20 best selling pc speakers, there are a great variety of prices. On the lower end, there are several that sell between $20 and $50, three that are below $20, two that are between $50 and $100, several right at $100, and the bestselling set of pc speakers is an impressive $179.

Top Selling Computer Speakers on Amazon

The speaker selling for $179 is also Bose bluetooth speaker, and I am familiar with the product line. I know that they make quality equipment, and they sell very well and very easily thanks to brand recognition. In fact, my own headsets are Bose SoundLink around-ear wireless headphones and they are totally awesome.

So, 2.5% on a $179 product would mean that every sale is going to earn $4.48 which isn’t terrible at all. Especially when you consider that if your audience is willing to invest that much into a high end pc speaker, then they will most likely be purchasing other higher ticket items at the same time. When you’re working with Amazon sites, one of the things that you need to take into account are other products that your audience may be looking for. This is thanks to the way that the Amazon Associates Program works.

It’s important to remember that you receive commissions for anything that people clicking on your link buy in a 24 hour period. People who are clicking your links for quality speaker equipment are likely those with more disposable income, which means that you can place yourself in front of an audience who will often add more items than speakers to their orders.

The challenge with this is that it can be very difficult to estimate your earnings from other added items, but we can safely say that each $179 order should earn on average around $5. Now, taking into account an average conversion rate of 2% of your sites traffic to sales, which is really conservative, that means that for every 100 visitors to your site, you could earn as much as $10. I would say that the niche we researched would definitely be a profitable one.

Determining if a Niche is Profitable in 6 Steps

As you can see, niches are literally all around you. I just found a profitable one sitting at my desk with no preparation whatsoever. I literally looked around and started to see if this was a profitable niche as I wrote this article. Let’s recap:

  1. Initial Keyword Research
  2. Look at Ads Within the SERPs
  3. Using Authority Sites within SERPs for Some Keywords
  4. What Does SEMrush Say?
  5. Are There Other Affiliate Websites?
  6. What is the Commission Payout?

By following these 6 steps, you can easily see if a niche is truly profitable. Your next steps would be to buy a domain name and build a website.

If you have never built an affiliate website or want a single resource where you can buy your domain and build your site in a few steps, then I strongly urge you to check out my top recommended training course which can show you exactly how to build an affiliate site for a profitable niche that will earn you money passively.

It’s a wonderful opportunity, and it can truly open your eyes as to what’s possible in the world of online affiliate marketing.

I joined Wealthy Affiliate in 2007 with zero marketing experience & within a few months, I had a website built that was driving traffic & sales daily.

By 2009, I quit my day job and was running my six figure business.
Wealthy Affiliate is the real deal and works. Come on in, and I will show you how to actually start making money.

It’s free to join and there is no credit card required.

Jay Neill

Jay Neill - Founder of Affiliate Resources, Inc.

I am the founder of Affiliate Resources and have been running my own successful online affiliate marketing business for over 10 years. The niches that I am involved in range from Kindle Lighted Covers to Flux Capacitor Replicas. All of which I have a personal interest in.

I am also the Live Training Coach inside Wealthy Affiliate where each week, I broadcast live training classes via Webinars to their members.

10 thoughts on “How to Determine if a Niche is Profitable”

  1. I’ll definitely have to consider all of that in my niche. Question though. What if the big advertisers are really big brands, such as for example in a sports niche, such as nfl, and fanduel and things like these that are really big as it hold tough to be able to set up SEO? Well I guess it utimately would depend on the small tail keyword you are going after.

    Reply
  2. Hi Jay, this is such a brilliant post it has helped me massively thank you! This is my main sticking point at the moment and I’m doing my best to absorb the information required to generate traffic to my site. I took some notes from your post and will definitely be coming back to re-read it as it was brimming with relevant and very useful information.
    Thanks again and all the best to you,
    Nathan

    Reply
  3. Wow, that’s a very informative article on how to determine if a niche is profitable. I already knew about the keyword research part, but for some reason I never thought of looking at and researching other authority sites for keyword information and even finding out that you can see what kind of traffic they get. The 6 steps you have given out shows it really isn’t that hard to see if a niche is profitable or not. Do you recommend using this method if you’re new and just don’t know what niche to go in or is it better to go with a niche that you know a lot about?

    Reply
  4. I have been researching Affiliate marketing for a couple of days, and have been quite sceptical. however the tranparency of this page has helped me. I think I am ready to give it a go.
    I find the way you brake down the keyword reasearch easy to follow, and to be onest, the other explenations I have seen, made it look complicated!
    Thank you Jay

    Reply
  5. I think you can find niches within all markets that gets enough traffic. Even the biggest markets on the web such as weightloss or “how to make money” presents several subniches where the competition is not too fierce. The only market I have heard of that has become oversaturated because of too much competition is in the “Adult only Market” (porn).
    I know my niche is profitable, (dog training) I have seen enough of evidence of that. The problem is just that I don’t seem to get enough traffic, my posts are not getting ranked.
    Do you have any suggestions on what I should do?

    Reply
  6. Hi Jay,

    I must say that I have got an inspiration from your article and from today I will be looking for niches around me. I like this: “I could be sitting or sleeping on my niche!”

    I love those steps of determining if a niche is profitable or not even before beginning to work on it. I’m now 11 months in online business and I must admit that I didn’t know how to determine if it’s gonna work or not but now I know. I think I will begin another one soon with these steps in mind.

    Just a little concern here Jay, I didn’t understand clearly how I can determine if a product is currently getting enough ads and how this would transform to my benefit if I pursue this niche.

    Thumbs up for a great article

    Paul.

    Reply
  7. Awesome post man!
    I love the steps you set up for finding a niche.
    This is the first time I hear about SEMrush. I see it provides valuable information, I’m excited to give it a try when searching for my next niche. Its great to have a set of steps you can follow every time and this are definitely the right steps to follow.
    Thanks for the great post! 🙂

    Reply
  8. Hey Jay!

    I am a huge fan of your weekly live videos. I just finished watching your walk-through of Google Analytics. Great resource!

    This article was super insightful into the research behind choosing a niche. I didn’t do any research! I just went ahead and chose essential oils because of my experience with holistic healing and my passion to help people.

    This niche is super low competition, is that bad?? I’ve been targeting ‘low-hanging fruit’ because my website is still pretty new, but what if I want to target high traffic keywords in the future? I may have to merge my one niche with another to gain those larger profits…thoughts?

    xx

    Helen

    Reply
  9. Hi Jay,

    I follow all of your articles and training you put on your website and inside Wealthy Affiliate. I love your seminars as well. You always have something new and you have a natural way of communicating with people through your training videos. I’ve been an affiliate marketer for 10 years now. One thing I learned early on is you never stop learning. Thanks for all of your training and tips. Keep up the great work that you are doing!

    Jack

    Reply
  10. Hi Jay,

    Wow! this is such a great post. It really has helped me a lot! This is something that I’ve really been struggling with and your post has given me some great tips and advice which I am definitely going to go away and put into practice.

    Thank you

    Reply

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