Free Internet Marketing Advice - How to Make Money Online

Subscribe

  • Subscribe

Niches

Find a good niche, and it’s pure gold.  At least that’s the belief of a lot of Internet marketers.  Some marketers settle into a niche and squat there forever.  After all, it’s you’ve got a good thing going, why change it?  Others are continually on the prowl for lucrative niches to exploit.

How to Find a Profitable Niche

A niche is just the online marketing term for “topic.”  You’re going to need lots of niches, and each niche is yet another income source.  People who operate in one niche are what I call Merchants.  They find a thing to sell, and that product defines them.  On the other end are the Strategizers, the product-agnostic people who move from niche to niche, and from product to product, seeking profit margins.

Low Paying Niches – Bad

Let’s look at the lowest range of niches, those that don’t pay well.  You can figure this out yourself by thinking of things that don’t really get much business on TV, Internet, or real life.  Or perhaps things that do sell but don’t have high selling points.  Let’s say that these are bad, low-paying niches, and yes these are just off the top of my head:

  • antique light bulbs
  • children’s puzzles
  • pitchforks

Do people make money from these niches?  Sure.  But not enough to make it worth your while.  Just take the craziest example, pitchforks.  Google “pitchforks” and what comes up?  You get one real advertiser, GlobalIndustrial.com.  The others–Yahoo, Shopping.com, and Real.com–don’t even fall into the category of internet marketers.  These are trash ads and could just as well be represented by blank spaces.

High Paying Niches – Beware

At the upper end are the highly paying niches.  They are so competitive that you can expect lower revenues if you try to enter them.  At the time of this writing, some of these competitive niches are:

  • webhosting
  • reverse cell phone
  • herbal remedies
  • spyware removers
  • online education
  • lasik
  • world of warcraft leveling guides

Middle Niches – Good

Now find something more in the middle.  Find products that people like and use, but that the Web isn’t saturated with.  But you also need to make sure that you can sell these products on an affiliate basis.

Locating Profitable Products to Market

Too many affiliate marketers get sucked into promoting a product because of three reasons:  it is new, it has a high commission rate, and it has a high dollar payout.

All good reasons to choose a product.  But toss out the first factor – new.  So much hype accompanies the launch of some affiliate products–notably info products from programs such as Clickbank–that affiliates can get sucked in.  And then lose a lot of money in the process.  Clickbank in particular lists a lot of half-baked info products that the merchant never took time to refine.

Consider these factors when choosing an affiliate product:

  • What is the Return Rate? Clickbank has a generous return policy.  Every product that gets returned erodes your profit every time it happens.
  • Does the Merchant Adequately Support Affiliates? Some merchants could care less about their affiliates, while other merchants have what they often call an “Affiliate Resource Center.”  These centers are often a webpage that lists some ideas for how to promote the product, along with a few keywords and some banner ads.
  • Is the Product Going Up or Down? Sites such as CB Engine and CB Analytics provide free snapshots into the history of Clickbank products.  Several factors are are at play, but Gravity is an important one.  Higher Gravity is better than lower Gravity.  But note, as in the graph, that extremely high Gravity in the 400+ range means that products are flooded with affiliate competition.
  • Earning Per Sale.  Another huge factor that affiliates often ignore–often dooming many affiliates’ campaigns.  Earning Per Sale (EPC) takes into account all factors that will influence your eventual payout.  For a simplified and unrealistic example, consider a product that pays out $100 per sale.  But if every other product gets returned, in the end you’re only getting $50 average per sale.
  • Product Commission Rate. In Clickbank, you should expect at least 50% commission rate.  But the high commission rates are due to the high profit margin of info products.  Physical products have much lower commission rates.
  • Product Commission $ Payout.  Many affiliates are tempted by high dollar payouts.  They see $40+ payouts and decide to jump on the bandwagon.  But high dollar payouts by themselves are meaningless.  For example, a product may pay out $50 commissions…but the advertising rates on pay per click systems such as Google AdWords are so high that it is prohibitively expensive to advertise.