Site Type and Niche – Finding a Profitable Niche

Before creating a website you need to decide on two things – what type of site it will be and what niche you will be focusing on.

Site Type

The site type defines the main kind of value your site will offer to visitors. There are three broad categories – informational, entertainment or ecommerce.

  • Informational site – Teaches, informs, guides and keeps visitors up to date.
  • Entertainment site – Entertains visitors through blog, stories or multimedia.
  • Ecommerce site – Provides a service or sells a product.

One type is not necessarily easier to build, nor more profitable than another. An Entertainment site typically has the easiest time attracting visitors, yet earns the least per visitor. An Ecommerce site, on the other hand, generally has the hardest time attracting visitors, but in return earns the most per visitor. Information sites places themselves somewhere in between the other two.

I recommend that you choose a site type according to your own strengths and resources. If you own exclusive rights to a product then an Ecommerce site selling that product would be the obvious choice. Similarly, if you are an expert at a subject then teaching it through an Informational site would be a good idea. Lastly, if humor or multimedia is your strong point then an Entertainment site may be your best starting point.

Content and Ecommerce Sites

To simplify things, Informational and Entertainment sites will be referred to as Content sites in this book. Whichever site type you choose – Content or Ecommerce – you are not bound to only one of these types. That is only the starting point. For your site to become both popular and profitable it is generally required that you combine both of them. Either you start off with an Ecommerce site and then expand into a Content site to attract more traffic. Or, vice versa, you start with a Content site and add aspects of an Ecommerce site in order to generate more revenue from your traffic. Such a combined site will be referred to as a Content/Ecommerce site.

Site Niche

In addition to type, you also need to choose a niche for your site. The niche specifies what your site will be about in one phrase. It can be a general niche – such as “golf” – or a more specific niche – such as “golf clubs”. Either way, your site must not deviate from this niche. This is a key aspect of developing a popular and profitable site, because this focus will make it easier to rank highly in search engines and thus attract a greater flow of visitors, who are vital to monetizing your site. Visitors will also begin to think of your site as the place to go to find out about things in your niche.

Niche Interest

There is a virtually unlimited number of topical niches for you to choose from. Rather than choosing the most popular and profitable one you can find, I recommend that you pick a niche according to your own interests and passions. If you find a niche that is both interesting and enjoyable to you, you will stand a much greater chance of being successful at it. Do not let your new career as a web entrepreneur become another boring job. Let it become a profitable hobby.

Niche Popularity

Another factor you want to consider is the popularity of the niche. This will determine the upper limits of how much traffic your site can potentially attract, and therefore to a large degree how much money you can earn from it. The easiest way to determine the popularity of a niche is to use the Google AdWords Keyword Tool. This tool lets you find out the global monthly searches on Google for any term you specify. Preferably, you want a niche that has at least 10 000 broad monthly searches.

In addition to the Google AdWords Keyword Tool, you can use Google Trends to discover if a niche is rising or falling in popularity. This Google tool displays a graph showing how the world-wide search volume for a given keyword phrase has changed over time. A niche with a positive trend is preferable, though the monthly search volume is a more important factor.

Niche Competition

When you have found a niche that is both interesting and popular, the third step is to consider the competition. To estimate this you can use the Keyword Efficiency Index (KEI) formula:

  • Monthly Searches * Monthly Searches / Competing sites

You can find out the number of competing sites by searching for the niche on Google in quotation marks. The number of search results returned will be the number of competing sites. For example, a niche with 10 000 monthly searches and 1 000 000 competing sites would have a KEI of 100. An index above 10 is considered good and above 100 is excellent. The higher KEI value the niche has, the less crowded the niche will be, and the easier it will be to grow your site’s traffic levels.

An exceptionally good book on how to build passive income:
Timothy Ferriss - The 4-hour Workweek