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.
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:
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.
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.
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:
- Best bluetooth speakers under 100
- Best AirPlay speakers
- 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.
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.
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.
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:
- Initial Keyword Research
- Look at Ads Within the SERPs
- Using Authority Sites within SERPs for Some Keywords
- What Does SEMrush Say?
- Are There Other Affiliate Websites?
- 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.
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