What makes a profitable niche for an online business?

The choice of a profitable niche is paramount to success when it comes to online business. But as any internet entrepreneur will tell you, choosing a good niche is one of the most difficult decisions that you will face in your pursuit for online success. Several factors coalesce to make this process challenging for the uninitiated.

For example, it is difficult to spot trends unless you are deeply immersed in a particular industry. Some of the most profitable niches already have considerable competition with thousands of players and breaking even in such niches can be difficult even with considerable investment. There are some specific qualities that you need to look into which will tell whether or not a particular niche is profitable.

Large Search Volume
This is an important determinant on how profitable a niche will be although it cannot be considered in isolation.  Basically, the search volume refers to the demand for the kind of the information that you are offering your customers. Higher demand translates to higher monthly local and global search volumes. This in turn increases the possibility of you getting high traffic and earning superb profits. There is really no standard recommendation for search volume threshold but a niche that can have at least 5000 searches per month has the potential to be very profitable.

High Paying Customers
A second factor that you need to look at is how much companies in your niche are willing to pay to acquire new customers. If they are willing to pay a high value per customer, then that is a niche in which you can make huge profits. You can determine this factor by using varied tools like Wordtracker, Google Adwords Keyword Research Tool, and Estibot amongst others. Niches like insurance, treatment, loans, mortgage, ppi claims, rehab and hosting are some of the most profitable with very high CPCs.

Low to Medium Competition
Never take on a niche where you will not be able to measure up to the competition. Many companies have already invested in the most profitable niches and are spending tens of thousands of dollars in content marketing and PPC advertising to get top rankings and stay ahead of the competition. Choose low to medium competition niches with high search volumes where you can easily break even.

Narrow Niche Market
If a niche that you deem as profitable is already overpopulated, you can narrow down on the niche and choose micro-niches or micro micro-niches where you are likely to meet low competition but highly targeted high paying keywords.  It is also important to avoid passing fads and focus on long term “evergreen” profitable niches.