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Niche identification is a rather time consuming business, so having some good business tools is essential. There is plenty of information available on how to market a niche, but finding profitable niches is somewhat elusive to many.

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Identifying A Profitable Niche Identify Market Needs Define Niche Define Product To Solve Problem

Step 1 - Find Out What The Market Needs

Find out what the market wants or needs means identifying todays problems & how to solve them.

Identify what potential buyers DO NOW online to help solve problems.

Try these sites:

Find pools of hungry fish with money to spend. What sites, ezines, lists and boards do they visit & subscribe to.

Niche Options

  1. Find a Niche and Fill It
  2. Create a Niche
  3. Deliver to poorly serviced Niche

Ask the following questions

  1. How do I know what I should be selling?
  2. How do I know if someone wants what I am selling?
  3. How do I get the right message out to the right people at the right time?
  4. How can I create a business where price is not an issue?
  5. How can I protect my business from copycats?
  6. How can I grow my business over time as my niche changes?
  7. How can I grow my business around a single niche but have multiple profit centers?
  8. How do you do it differently?
  9. What is unique about the way you do business.

Don’t start targeting the top keywords. Start with keyword search phrases that start with: How to, Get rid of, Quit and Get. This gives better niche results.

Step 2 - Define A Niche To Fulfil The Identified Market

Demographics - What kind of company is it that you sell to? Is there an industry description that includes size and location? For individuals you might want to find out what kind of income level, gender or education, etc.

Psychographics –mental profile of a potential customer. What kind of values do they have? What category of interests do they focus on? This becomes a buying profile for the market when you can match a psychological profile to the market’s wants and needs.

Problems/Opportunities - Why do they need your services? What benefit do they receive if they use you? What is not working or what do they want to work better?

Distribution of Your Products – Finally, you need to know where you can find them. Where do these companies/people cluster? What do they read, where do they network, and what form of mass media is connected to them?

Step 3 - Define Product or Service Profile Targeting the Niche

  1. Target Market – The market that you have identified. This lets your listener know your offering is for them, not someone else.
  2. Problem – Explain the problem and pain your market is suffering from.
  3. Solution/Benefit - Tell them the solution and benefit to the problem
  4. Uniqueness - Tell them what makes you different from your competitors.

Practice this as an "elevator pitch"

Step 4 - Analyze Keywords Relating To The Niche

To ID Keywords

Brainstorming, Keywords And Niche Analyzing Software

To Analyse Keyword Effectiveness

To ID Current Ads & Max/Average Bid

To ID Current Top Ranking Competitors

To Analyze Competitor Site Effectiveness

Step 5 - Identify Demand For Solution


  • Click on Shops link at the bottom of page.
  • Click on category of the product you're researching - displays top shops in category, ranked by volume (sales via PayPal).

Google Groups

  • Type name of a product in the search box,
  • Find news groups discussing the product
  • Click on the links and find out how many people are posting to those news groups/interest in the product - Find groups with over 1000 members


Click on the Top Sellers tab - Most popular items by category, and updated hourly


  • Type name of a product in the search box,
  • Click on the Sell tab at the top of the home page/Seller Central link at the bottom of the Sell page/Hot Items by Category link.
  • Using Ebay Category Master list - Click on anyCategory – see all sub/subsub categories. Each sub/subsub is an entire niche in itself. Ebay is a niche location tool.

Ebay Pulse - Trends

New Research Section - Pro Subscription $24.99/month

Overture Search Suggestion

ID High Volume Searches - >50,000 searches pm

GoogleNiche SW

ID 5 per Ads Day with>two Adword ads to affiliate links/minisite for at least 8 days

Adwords cost-per-click estimator tool / GoogleNiche ProfitFlash

GoogleNiche Analyser Tool - Enter any search phrase - tells Adwords advertisers using affiliate programs for income; whether links are direct or indirect (using mini-sites); which ads been around > few days

Google Adwords Searches

  • Keyword Selector Tool -specific and related keywords searched for past month and bids.
  • Select - Filter out unrelated, duplicate and unwanted keywords to form the Master List

Step 6 - Assess Competitor Sites

You can assess competitor sites using standard search engines - for example, Googles - Advanced Search Mode

Define exactly what you want your SE to return using prefix:keywords.

Leave NO SPACE after the colon:

  • intitle: - ONLY Results with word in title
  • allintitle: - ONLY Results that have the keywords in the page title
  • aillinURL: - ONLY Results that have ALL the keywords in the URL
  • link: - Shows links to specified webpage
  • related: - Shows pages that are similar

# Competing websites in Google, where keyword appears in page titles. Indicative of ‘true’ competition of niche - website have keywords in page title. The lower the number of AllInTitle results, the less competitive the niche.

Top 1, 2, 3 and 10 ranked web pages in the Google search results for the keyword. Studying the top ranked websites closely.

Tools & Templates

Analyze Keywords On Specific Pages

Assessment Sheet

Use an assessment worksheet to track and organize information on:

  • Date Launched
  • Back [Incoming] Links Data
  • Site Design
  • Visual Content Quality
  • Subscription Newsletter
  • Membership p.a.
  • Affiliate Program
  • Metatags, Keywords Used & Content Relevancy
  • Changes in Content

Step 7 - Analyze Keyword Profitability

Once you have all the available data, you are able to determine whether or not this niche is profitable. This is where you Sales Targets set in the previous section assist in making a GO/NOGO decision.

Perform in-depth keyword profitability & competition analysis
requires the following data:

• No. of Words in Search Term
• Average Bid Price
• Searches
• Results
• Number of Google Ads
• All InTitle Results
• KEI2
• PageRank of the #1, #2, #3 & #10 ranked web pages
• Back Links of the #1, #2, #3 & #10 ranked webpages
• URLs of the #1, #2, #3 & #10 ranked web pages

From this you can identify the competitiveness of each keyword and the likely revenue.

  1. Niche Popularity - Whether a niche is ‘in-demand’ and the actual popularity data.
  2. Average Bid Price - The price website owners are willing to paying to display their ads on Google Search Engine. Higher av. bid price = higher potential earnings.
  3. Yahoo Max Bid Ad Inventory - Gives list of Advertisers & Max Bids
  4. Google Ad Inventory - Higher number of Google Ads = more competitive the keyword for PPC marketer. Hgher number of Google Ads = more potential advertising revenue for Google AdSense publishers
  5. Niche Competition - To profit from a niche, must dominate the niche… "beat your competition" for top rankings. The more "popular" a niche, the more competing websites. BUT it’s the quality that matters

Tools & Templates

You can analyse this by going to each site and getting each subset of information or use one of the keyword research tools above that also give adwords and site competitiveness information. I personally use Keyword Elite.

NEXT: 4 - Develop A Product Set