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Monday Question: Niche Selection 101 – The “Best” Niche

Here’s an intriguing query from Sarah:

I’m a ebay powerseller and getting into the niche marketing vibe.

Judging by the number of high dollar earnings screenshots I’m seeing, I’m planning to go into the internet marketing niche.

I worked hard to build my ebay business and am sure I can replicate the same in internet marketing.

Can you give me any suggestions?

My answer:

That’s the great thing about Internet Marketing, the ability to continually expand your focus and the ebay stats screenshots you sent me were pretty impressive too.

You might like to check out Super Affiliate Amit Mehta’s post “Selecting a niche is everything in affiliate marketing

As an affiliate or a product creator, the biggest constraint you will face is time.

Like it or not, even outsourcing the bulk of your projects, you’ll need to closely monitor your ROI (return on investment) of your time which is limited to 24 hours a day.

This is what I mean:

If you’re working 12 hours day intially to build your business, you could be bringing in $20,000 – $50,000 a month as an affiliate marketer (leveraging on your previous experience as an eBay powerseller). Assuming you’re looking at a conservative 50% margin, that’s a $10,000 to $25,000 net profit off the bat.

Your hourly ROI is about $33.33 per hour (assuming the $10,000 is earned in 25 days a month, 12 hours a day) . At $25,000, your ROI works ou to about $83.88.
That’s the scenario for the “Internet Marketing niche”.

Now imagine you go into something with equally good potential, but with fewer competitiors (most new internet marketers inevitably choose the internet marketing or make money online niches…). A niche software product that most home users will benefit from – say a disk defragmentation software, an anti-virus software, or personal tax software.

[This is a theoretical scenario, so don't take the numbers are concrete ones]

For the same 25 days a month, 12 hours a day, your profit could be $50,000 to $75,000 a month.

This could be due to fewer competitiors in your market, a higher degree of domain knowledge which keeps out “newbies” to this market, and lower marketing costs (eg. PPC bids costing much less than $5-10 a click found in ultra competitive niches).

What’s happened here?

For the same effort (time and resources), you’ve seen a quantum increase in your ROI (a minimum of 250%), so it has everything to do with profiling a niche and focusing on it.

If anything when it comes to niches, the ones nobody talks about are the ones that will have the greatest market potential.

A little research before heading into any niche can help you best direct your resources.

2 comments on Monday Question: Niche Selection 101 – The “Best” Niche

  1. Stephan Miller
    September 27, 2007 at 1:27 am (7 years ago)

    I moved from being an Ebay powerseller to an affiliate marketer. I eventually dropped Ebay to focus more on affiliate marketing. Yaro Starak recently made a post on how to leverage your Ebay business for affiliate marketing. I would look into that first. It beats starting from scratch.

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