Frequently I see new IM’ers make comments that make me think the most common misconception is that a niche is tiny. For example, you might see a post like the following:

I’ve found a great product that will help Caribbean spearfishermen increase their catch by 20%. I have a page up with a link to the sales page, and I’ve been doing article marketing for a couple of months, but I’m not getting any sales.

For Internet Marketing, the word niche refers to a very targeted subgroup of a market. It doesn’t have to be tiny. It has to be hungry. “Wedding Planners” would be a more likely candidate. You’d just have to figure out what they’re hungry for.

Here are the steps that you should take when starting a new site or area of focus. If you don’t work through these steps in order, you’ll often be spinning your wheels and won’t see the results you want.

• Market – Locate a hungry market. Ideally you’re looking for a decent number of people with a specific need that they will pay to have met. In the example above, the spearfishermen would certainly like to increase their catch by 20%, but it’s way too small of a market to try to target.
• Traffic – After locating a niche, start working on driving traffic. If you’re using PPC, this step will entail research. If you can’t advertise cheaply, it might be a dead end. If you’re using article marketing, go ahead and start writing and submitting articles (only submit each article once at this stage) to test what kind of traffic each article can pull. If you can get a measurably consistent amount of traffic, you can move on to the next step.
• Conversion – Find an affiliate product that closely matched to your niche’s need. Build a landing page that “reviews” the product or otherwise points the visitors to the product. Of course, at this stage you could also develop a free multi-part course or newsletter and direct the traffic to a squeeze page instead to start building a list. The key though is to eventually put a product in front of this traffic to test how they respond. The traffic from each niche will convert differently. Of course, the articles and landing page can help condition traffic to buy, but sometimes you’ll find that your niche just isn’t a buying group. If not, go back to step one with another niche. If they are buying, you can move on to the final step.
• Product – Develop your own product(s). If you’ve used a squeeze page to build a list, you have a market for your product as soon as it’s developed. To come up with a product, you could write an eBook, develop a training course, rebrand someone else’s physical product, or just sell them a real product that you distribute or that is dropshipped. I prefer the electronic media because it’s the easiest to automate and has a high return. That doesn’t mean that you can’t get a higher return with physical products, you just have to work harder to find a high-return physical product.

Finding a profitable niche can seem like an insurmountable task to new Internet Marketers. However, if you follow the steps listed above, if you discover that your idea is a dud, at least you will have done it at the beginning of the process rather than after spending months developing something that wasn’t going to sell.

I’ll be exploring each of the steps above in more detail in future posts, so please check back if you’d like more information.