Recently, Jay at Wealthy Affiliate did a live training session all about how to research a new niche. Although Jay’s training videos are usually helpful, this one was particularly good because he came up with a formula for calculating how profitable a niche is likely to be.
If you are a premium member of Wealthy Affiliate, you can watch the video by clicking the image below. If you are not, you can read my article about the video beneath it.
Defining the actual outcome
The mistake many beginners make when they are doing niche research is that they are too optimistic. This means they will look at the stats and see great potential and probably dive straight in. A better approach is to look deep into the numbers and be realistic about what the potential might be.
Here is a comparison between an optimistic way of look at a niche and a realistic outlook:
- High valued niche (expensive products, big commissions)
- Monthly search volume: 5,000
- QSR (Quoted Search Results): 115
- .com domain available
= SWEET NICHE?
- Probably fewer sales – people take longer to make a purchasing decision for more expensive products. The purchase life cycle is longer from seeing the product on your site to actually making the purchase.
- Search volume seems too good to be true – there’s always a reason why something gets many searches. Maybe it’s not a buying keyword, more of a “kick the tires” type keyword, an information keyword. 5,000 searches doesn’t necessarily mean 5,000 people are ready to buy something.
- Maye too competitive in SERP – maybe it’s low QSR because the few websites that are ranking for that keyword are really awesome sites like Wikipedia and other huge sites, so affiliates and marketers will be deliberately avoiding it.
- Someone tried and failed – maybe someone bought the .com domain, tried the niche, but failed and gave up.
= NEED MORE RESEARCH
Actually, the best approach is to have about 70% realism and 30% optimism. You need a bit of optimism to keep you enthusiastic, but you need to be realistic to make sure you aren’t setting yourself up for disappointment later on.
Know your audience
Know your audience beyond just researching the numbers. The best niche research happens offline, so take a step back and think about the person who might buy your products.
Understand the potential buyer:
- Who are they?
- What type of person are they?
- What are their needs?
- What do they buy?
- Where do they buy?
- When do they buy? Is it a seasonal niche?
- Why do they buy?
What is being promoted to you?
Stuff is being promoted to you everywhere, directly and indirectly. Look around at what products you are being exposed to.
- Look at TV commercials
- Look at what is being worn, used and consumed
- Clothes and their accessories
- Gadgets and their accessories
- Foods and the tools to make it
Accessories will bring a lot of success
- Kindle lighted covers, so people can read in bed
- Jay found this out based on his own desire to read in bed without using a separate light
- Standing desks – an accessory to having a regular desk
- Induction cookware
- Batteries for e-cigs
If you are already in a niche, look at what accessories go with it. There is a strong chance you could make a lot of sales of related products.
Knowing your numbers and metrics
In order to make an informed decision about whether a niche is worth getting into, you need to know some key numbers:
- Product cost
- Commission rate
- Keyword search volume
- Traffic volume for top SERP
- 17% of search volume for top result
- Average conversion ratio
- 2% – 10%
- Go for 2% to be realistic
= MKP (Monthly Keyword Profit)
Once you have that data, you can decide whether to proceed.
Jay’s secret point system revealed
Thankfully, Jay provided some numbers to aim for:
- Product cost = $100
- Commission rate = 10% ($10)
- Keyword search volume = 1000 searches per month
- Traffic volume for top SERP = 17% average = 170 visitors per month
- Average conversion rate (2%) = 3.4 sales per month
- Monthly Keyword Profit = $34 per month.
At this point, you might be saying, “$34 is not enough to quit my job!”
But that’s only ONE keyword! One article will actually rank for several keywords. So, as a rough guide, add a zero after it. This means you could earn $340 per month.
But results will vary. A lot depends on the quality of your content and whether it is a buying keyword.
Jay then did a live walk-through where he took a look at several niches. First, he mentioned how he has a new DSLR camera and how it would be good to look at the accessories for that. But then he got distracted by some previous keywords he had found.
Kitchen faucet parts
- 509 searches
- 87 traffic
- QSR 115
- .net available
- Products are all below $50, but Jay is interested in the kitchen faucet hoses.
- Keyword Monthly Profitability is low, but there are many possibilities.
Kitchen faucet hose
- 152 searches
- 26 traffic
- QSR 90
- .com available
- Keyword Monthly Profitability is low.
DSLR laptop backpack
- Many great products
- Lots of potential here.
Jay did not have time to go into a huge amount of detail with these niche examples, but it was still useful to see him go through the process.
Q & A
Q: How can I tell if a niche is too broad and I won’t rank for the keyword?
Your initial keyword research should show you this.
Q: What can we do to improve the traffic to our website?
- Write more content on your website
- Promote your content on social media
- Outreach to other website owners for guest posting
- Use the SiteComments tool at Wealthy Affiliate to get comments to your content.
Q: Is it okay to focus on promoting memberships with recurring commissions?
Yes, but you will find that the conversion rate will be lower because people are aware that it’s a bigger commitment.
Q: Can we promote multiple products for each article?
It is best if each article only leads to one product. If you recommend several products, people may find it more difficult to make a decision.
Q: Where can you check for the conversion rate?
It will be difficult to attain until you have sales. This is why it’s best to use the lower estimate of 2%.
Q: How many articles can you realistically write in a particular niche?
Lots of them. Perhaps 10 articles per keyword idea – for example: review, reasons why, how to properly use the product, etc.
Q: How do I see what other people would see when I do searches?
Use an incognito window in Chrome or a private window in Firefox.
Q: How do I find what other keywords Google found within my content?
You can find this in Google Search Console:
> Search Traffic
> Search Analytics
> Select all check boxes at the top
> Click on a particular URL
This will show you the keywords that particular article is ranking for.
Q: How do I find other affiliate programs other than Amazon or eBay?
Type in Product Name Affiliate Program into Google, e.g. “quad copter affiliate program”.
When Jay typed this in, he came across a website that offered drone insurance, so he took a look into that.
- QSR is too high
- Could be potential here, but would need to do more digging.
Q: If I have over 100 clicks to Amazon but no sales, is something wrong?
In that case, you need to take a step back and think about the customer life cycle. The good thing is you are getting people from your website to Amazon. But there is a reason why they are not buying on Amazon. Maybe they are getting distracted for some reason.
But you might want to contact Amazon to see if there is any problem with your cookie or something.
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Anyway, I hope you found this write-up about Jay’s training on niche research helpful. If you have any comments or questions, why not post them in the comments section below.
All the best,