There are usually two approaches when giving advice on how to choose a niche. The advice for people new to building niche websites, starting a blog, or entering the Internet marketing arena is usually something along the lines of “choose a niche that you are interested in or passionate about”. This isn’t bad advice, in fact it makes a lot of sense. It’s much easier to write about something you love than write about something you’re not interested in. So if you are a “newbie” or just fancy dipping your toes into the online world, then it seems perfectly logical to do it this way.

The problem with this is that the niche you are passionate about may not be a profitable one. For example you may be a great cake baker, but a blog about how to bake a cake, although it could be very informative, would probably only attract visitors seeking to find quick recipes, not necessarily spend their money and buy something. Basically it may not be a very profitable niche market and unless you are pursuing a labour of love it won’t bring you much financially.

We want to find hot niche markets, and if possible find a gap or vulnerability in that niche market that we can exploit to our advantage.

Whether you are hoping to sell digital or physical products the techniques may differ slightly but the principle will remain the same. We are going to look at selling physical products online in this article, Amazon in particular, as this is where I have more experience. We’re also planning to do a full guide on how to build successful Amazon affiliate websites in the future, this article will be part of that guide.

Where do we start looking for our Niche?

The obvious place to start our research if we are planning to sell Amazon products is on Amazon itself. There are lots of other places we can look at too, such as Ebay ,Aliexpress, Alibaba etc but lets stick to Amazon here.

Fortunately for us the Amazon website is designed brilliantly to expose it’s visitors to as many products and offers as possible. Each visitor is a potential buyer so it is essential they capitalize on this by making it as easy as possible for that visitor to part with their money. As a result of this Amazon supplies us with a variety of tools to help us buyers find what we want, or what they think we want. So that is where I look to first when I’m trying to find a profitable niche that I can promote.

I usually start by simply selecting one of the “Departments” from the right hand side bar on the Amazon homepage itself. Although some people have their favorite types of products that they like to promote, it’s not that important which one you choose/click at this point, it’s just a place for us to start – to give us a “feel” if you like.

A lot of people advise that you stay away from Electrical goods when promoting a physical product. The commission paid by Amazon on Electrical goods is low, and it is capped. This is because the mark-up on electrical goods is so tight that suppliers simply can’t share a great deal of the profit with their affiliates. It’s not just Amazon that has low commissions on electrical goods it’s all stores and suppliers, so I personally don’t bother promoting them myself.

Let’s say for the sake of this article that we select “Home Garden & Tools” and then “Appliances” from the side bar menu (You can try it now in a separate browser as you read this). On the following page Amazon will then present us with a whole plethora of different products within that category. Notice also that there is a whole selection of new product ranges down the side bar menu now as well as the ones presented on the main part of the page.  Each one of these product ranges represent a potential niche for us, but I like to dig a little deeper first.

The deeper we dig into a product range and the more specific in our product choice we go, means we will usually find it easier to rank  any website or blog we decide to build to promote that product later on. By laser targeting a product we are doing what a lot of the bigger authority sites cannot do and that is focus and optimize our website on one small but profitable niche.

Staying on this “Appliances” page you will also notice that there are a few ‘widgets’ showing us things such as “Best Sellers in Washes and Dryers”, “Most Wished for in Appliances” and also the latest posts and comments from the customers forum. What more could you wish for when looking for a hot niche? These widgets are basically giving us on a plate everything that buying customers are demanding and spending money on. We just have to fulfill that demand and by doing so we are helping ensure that our niche will be a profitable one with plenty of hungry buyers.

Don’t stop here though, we still need to focus in a little more on a particular product.  I’m going to click on “Robotic Vacuums” to check them out.

Taking a closer look at a Product

When you are on an actual product page (Robotic Vacuums in this example) the first thing we should take a glance at are the prices. Generally speaking you want to choose a product which is $100+, this will ensure that we get a decent level of commission should we choose to promote it. Robotic Vacuum’s seem to meet that criteria as they are priced between $200-$400 so we can tick that box.

You will notice in the top right hand corner of your Amazon page there is a drop-down menu in which you can sort the list by Popularity, Price; Low to High, Price; High to Low, and Average Customer Review. This is a powerful tool for us as it allows us to quickly prioritize the important products in a range/niche to the top. (It usually allows you to sort by “Best Selling” also, but at the time of writing this article it seems to have vanished!)

Next we need to quickly look at the Customer Ratings for the products, (this is represented as stars located below each product). We are not necessarily looking for products with 5 star ratings, we are looking for the items which have sold the most. You can usually get an idea if a product is selling well or is popular by the amount of reviews left by customers (the amount of reviews left for an item should be shown as a number next to the ‘star’ ratings). Much to my surprise Robotic Vacuums seem to be quite popular. Most of them seem to have over 50 reviews, some reaching 300 and even 600 reviews. This is great news for us as it means this product is popular with buyers.

We want to make sure we can find at least 8 or 9 products in this niche that meet both our above criteria (High price tag, and high customer reviews), if we do then we can move onto our next phase.

Keyword Research and Search Volumes

By using the Google Keyword tool to we can get a rough idea about how many times a product, in our case “Robotic Vacuums”, is being searched for each month. obviously the higher the search volumes the better. The Google Keyword Tool will also give us a few good ideas for domain names should we decide to pursue this particular product, basically keep an eye out for those “Buying Keywords”.

We won’t go into the full details about using the keyword tool to find a profitable niche because I’ve already written a more in-depth article on this subject. You can read it here – Effective Keyword Research. I will also include a link to it at the end of this article too.

Generally speaking I look for products with a monthly search volume of around 2000+ a month. Some people may consider this a little low for them, but I’ve had some decent results from these sort of figures. Obviously the high the monthly search volume the better – but if you are just starting out in building Amazon affiliate sites you may find the market a little less competitive at the lower end of the search volumes, and still be able to earn a good few dollars every month.

For what it’s worth Google says that our example keyword gets 2400 searches per month. It also returns other related keywords which we can take into account but they bring in much lower search volumes.

Let’s presume that our product has met the monthly search criteria that we have set out, and that we have noted any other keywords that we could possibly utilize (remember those ‘Buying Keywords!’), we then need to check out any other possible competition.

We can analyze the competition for our potential keywords by using Google itself, or by using alternative tools such as Market Samurai or BuzzSumo. Obviously, we want our keywords/product to have low competition so we need to know if we can out-rank any already established sites within this niche.

Again, we won’t go into too much detail in this post as we’ve already written a more in-depth article here – Analyzing Your Competition which will explain it better.

A lot of people will not go so far as to check keywords and competition. For some people just knowing that the product is selling well on Amazon is enough encouragement to press ahead and get building their new “Robotic Vacuum” website. And you know what? That’s often enough to bring in great results, but personally I just like to go that little bit further.

A Summary of your Niche Research Strategy

I’ll summarize what we are doing when we use this method to explore Amazon for potential products and niches.

1. Dig down deep into Amazon utilizing Department Categories, Widgets, Most Wished Lists and the Forum Comments.
2. Use the Sort drop-down menu to prioritize the products within a Department.
3. Identify and check any potential products price – is it over $100?
4. If ‘Yes’ to number 4 then is there over at least 10 reviews?
5. Use Google Keyword tool to check potential search volumes.
6. Analyze any potential competition.
7. Go ahead and promote your product.

Conclusion

Remember, there are lots of different methods for investigating and discovering a niche or product to promote. This is the model I have used on several Amazon Review-style sites and have found it to be a very effective method. Of course, the success of any site will be dependent on a wide range variables, SEO being one of the most important factors. But, at least by using this strategy you will know that the niche you have selected will potentially be a profitable one.

Many newcomers to internet marketing and affiliate marketing get confused or worried about finding a niche. I hope this article has helped shed a little light on the subject. If you want to know more about how to conduct Effective Keyword Research read other post here.