When to Target High Paying Niches & Low Paying Niches

Oct.14, 2010 in Marketing

niche saturation

There are only a few things that are extremely important when it comes to choosing a good niche to target. Unfortunately many people do not understand that there is more to selecting a niche than figuring out how many other marketers are affiliated with the niche. Many people will think of a niche or come up with it in one way or another, only to dismiss it when they realize the market as a whole is heavily “saturated” (has alot of other marketers targeting it.)

There should be more thought put into it than that.

There are two primary things to think about when choosing a niche:

1. Is the niche in a market that has an extremely high individual sale/transaction dollar amount? Even saturated niches can be profitable when one adsense click equals a few dollars or one affiliate sale equals $100 (for example.) The more money you made per click/sale the less traffic you need in order to make money. So although the niche may be saturated, each click/sale is worth MUCH more than if you were targeting a low paying niche with less saturation.

Side note: Unless you are a mega expert or have a great deal of passion for the niche, you should NEVER target a highly saturated niche that has a low individual sale/transaction dollar amount. This does happen even with little to no marketers targeting it.)

2. Is the niche in a market that has little competition, yet large enough search volume to generate enough low dollar sales to equal a solid return of your time and monetary investment. These are often the “perfect” niches because they are ignored by so many marketers who pass them off as “not profitable.” You may only $0.50 per adsense click… $10 or $15 per affiliate sale, but when your site holds top 10 spots for those keywords (with little effort since the competition is weak) those small clicks/sales add up quick!

My Mortgage site is a good example of #1 and the review site I mentioned the other day is a great example of #2. (I’m actually working on a small report laying out the exact process, stats etc. of that review site, which I’ll be releasing sometime in the next couple weeks so stay tuned for that.)

Obviously there are a few more things you need to look at in both cases, but my intentions of this post were to attempt to shine some light on “niche saturation” since many people don’t seem to understand the pros and cons of the whole issue.

So to sum it all up, highly saturated niches CAN very well be highly profitable even if you never conquer the top 10 rankings of Google for those keywords. And at the same time, lower-paying, less saturated niches can also be extremely profitable because they are ignored by so many marketers.