Don’t start with a wrong niche
You want a niche that has the potential to achieve your financial goal. Unless you are doing it as a hobby, don’t waste your time, money and effort in non-profitable niche. The worst advice in choosing a niche is “follow your passion”, because your passion may not be profitable enough. Don’t start your internet business with a wrong niche.
But how do we know if a niche is profitable?
You can determine if a niche has the potential to achieve your financial goal by performing the calculation below:
(For calculation purposes, let’s assume the following scenario)
Average number of searches every month = 20,000 searches
Expected percentage of searchers actually visiting your website = 3% (this will depend on your Google Ranking)
Expected conversion rate (the percentage of visitors actually buying from your website) = 1%
Average profit per transaction = $20
Average number of visitors to your website
= 20,000 searches x 3%
= 600 visitors
Average monthly profit
= 600 visitors x $20
Please note that ‘the percentage of searchers visiting your website’ will be increased significantly (can be as high as 15%) if you managed to rank your page in the first page of Google Search Results.
The ‘profit per transaction’ will be based on the product you are selling or the commission you are getting from selling other people’s product or an affiliate program.
To perform the above calculation, there are three variables you need to find out:
- Average number of searches per month
- The profit from products or affiliate programs available online
NB : To get information on the number of searches for a niche, sign up to https://adwords.google.com/ko/KeywordPlanner/Home
step 1 : Click ‘Get search volume data and trends’. See picture below.
Step 2 : Type your keywords in the box. Make sure you enter your niche keyword like this – [niche keyword], if you don’t put the keywords in square brackets it will not bring up accurate results of the amount of people searching for that keyword every month. Select the targeted location and hit “Get search volume” button. See picture below :
Step 3 : Look for a niche with at least 10,000 search monthly. See picture below :
Above result shows average monthly searches of 12,100, I will not consider niches with less than 10,000 searches monthly.
You do not want to choose a niche in dying trend
You need to have a niche that is growing in trend, or at least not dying off.
NB : Check your niche if it is in a dying trend at https://www.google.com/trends/ .
Step 1 : Sign up to Google trend. Put in your keyword for your niche, see picture below :
Step 2 : Evaluate the result. See picture below :
Be-careful of competitions
When a niche has great potential, over hundred thousands of searches every month and in growing trend, that niche might be already facing tough competitions. For example you would like to choose ‘Sports Attire’ as your niche, then you will be facing huge competitions from big corporates like Addidas, Nike, Under Amour, Polo and etc. It will be quite impossible to get your site ranked on the first page of search results with those big boys spending tremendous amount of money in advertising and SEO.
In this case, you may want to consider to narrow down the niche to maybe ‘Sports Attire for Toddler’ , ‘Sports Attire for The Underprivileged’ , ‘Swimsuits for Pregnant Women’ , etc. To learn how many competitors are having the same niche or using the same keyword, click here.
Choosing a niche is the first step of starting an internet business. Spend enough time and effort to choose the correct one.