Recognizing a Gold Mine Niche

December 5th, 2007 | by Scott

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This is part 1 of 10 in the Niche Network Marketing with LAMP series.

First, its important for me to define what I believe makes a niche market a gold mine. For me, it has very little to do with how much money is available to be made in the niche. That may sound odd or wrong to some, but the way I see it is that so long as a niche market is profitable it is worth working in for more profits. So, with that mind set almost any niche could be a gold mine if I used “profitable” as a barometer.

Also, because my primary business model for Internet Marketing is in building niche mini-sites and not niche networks, and all of those fast and easy sites make me money, profits aren’t a real incentive to focus on a single niche long enough to build huge networks when I could just as quickly build a bunch of new profitable mini-sites with the same time.

So, what does make a niche market a gold mine in my opinion? When its a niche topic that excites me. Pure and simple, when I come across a niche while building a mini-site for it that interests me and makes me want to learn more about it. Basically, when I become passionate about the topic is when I’ll devote the time and energy into turning that initial mini-site into the hub of a large niche network.

Now, just because that’s how I decide which niches to grow from mini-site to network doesn’t mean you have to do the same. Maybe you just like to focus on one thing at a time rather than build lots of different niche mini-sites, or maybe you just believe you’ll make more money in the long run by dominating a single niche rather than dabbling in many.

Whatever your reasons for wanting to build a network around a given niche the steps I outline in this series can be applied.

No Niche is a Bad Niche

Here’s the biggest bonus (in my opinion) to building niche networks, there is no bad niche to start from. That’s right, any niche market is a fine starting point for your network.

Some folks may argue that there are some niches which aren’t profitable enough, or are too small to build a network from–but they’re dead wrong!

Here’s why: your niche network is going to grow beyond your initial niche and include numerous other niches, so even if your starting point isn’t very profitable or its market is small you’re going to compensate for that as your network grows.

Here’s an example of how a niche network grows to include other niches. Lets say your initial niche site is focused on “Women’s Underwear” (as a sales site, not adult entertainment), as you build your niche network you’re going to build related mini-sites in it–like a 2nd tier for the network–and one of those may be for “Sports Bras”. That’s related to your starting niche, but also a niche in itself. Later you’re going to build more mini-sites around the mini-sites you’ve already made–sort of a 3rd tier to the network–and one of these may be for “Women’s Exercise Equipment”, which would be related to your “Sports Bras” mini-site, even though its not related at all to your initial niche site on “Women’s Underwear”. Next you may build a mini-site on “Athletic Dieting”, which is related to your “Women’s Exercise Equipment” site… and so on.

See, no matter where you start from a good niche network is ever expanding and will encompass profitable and large market niches along the way–so there is no bad niche to start with.

Picking the Starting Niche

Since no niche is a bad niche, how do you pick your starting point? Really its just a matter of picking a niche, any niche at all will do.

I will advise you to pick something that is a true niche (I’ll explain this in a moment) and that you’re passionate about, or at-least mildly interested in. I suggest you don’t pick a niche just because you think its going to be profitable. If you don’t enjoy learning and writing about the topic you’re going to have problems doing the work to actually build a solid niche network. The easiest way to avoid that is to pick a niche topic that you will enjoy working with.

Also, I mentioned that it must be a true niche. By this I mean there seems to be a lot of confusion out there about what exactly a niche is when I talk to people. The best description I know is that a niche is a narrow-focused segment of any market.

I’ll try to illustrate that for you as best I can. Lots of people collect sports memorabilia, so “Sports Memorabilia” is a market, but it isn’t a niche market because it encompasses all kinds of different types of sports and all kinds of different memorabilia.

Within the “Sports Memorabilia” market there are smaller markets like “Baseball Memorabilia”, “Football Memorabilia”, “Racing Memorabilia”, “Sports Autographs”, “Trading Cards” and so on. Any of these is a niche, but not a true niche by my standards because they’re all still too large in scope and can be easily broken down into more focused niches themselves. For example, from “Football Memorabilia” we can carve out collectibles from each individual pro-football team. As a Pittsburgher I’ll go with “Pittsburgh Steelers Memorabilia”.

Now we’ve cut down to a narrow-focused niche that would be manageable to start from, fairly easy to dominate, expandable and is probable to have a profitable buying market attached to it. In my mind this is a true niche.

Just to note, you could still break this one down further if you wanted, for example you could focus on just “Pittsburgh Steelers Autographs”, however now your niche is so narrow that it likely limits your profit potentials, so I would call that a micro-niche. Micro-niches can be useful, and depending on the market and products can be very profitable too, but that’s rare and typically if you start from a micro-niche like this its going to take you a long time to begin seeing returns from your time and money invested.

As I said, there are some micro-niches where you can do very well. I know a guy who focuses on one specific business retreat package and even though he only makes a few sales per year his commissions are so high that he’s making a killing with it, but finding such a profitable micro-niche and then being able to capitalize on it is really rare. I don’t suggest trying to start from a micro-niche unless you have some inside information on the market that will help you to dominate it fast. My friend I spoke of was a Corporate Communications Specialist for years and visited the retreat he sells packages for several times as a customer, so he had that kind of inside advantage starting out in his micro-niche.

Still, I also said that micro-niches can be useful and that applies to everyone. You can use these micro-niches in your niche network as satellite mini-sites around your hub because they are related and focused–and are great for pulling in interested traffic to which you can upsell through the rest of your niche network.

That’s it for part 1 of the Niche Network Marketing with LAMP series. I hope I’ve explained how to recognize and pick a true niche well enough for you. If not, or if you have any questions please don’t hesitate to ask them in the comments below and I’ll try to answer as fast and best as I can for you.

Part 2 of the series should be available in a day or two so please check back, or better yet, subscribe to my RSS newsfeed and be sure to get it as soon as it gets published.

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