how to find a profitable niche

How to Find a Profitable Niche [The Definitive Guide]

by Alessandro Perta

Today, I’m going to share with you how to find a profitable niche.

This is the 11-step process I use every time I coach a client to validate their idea before they go all-in.

And because time is precious, you don’t want to pick a niche and create content for it for months… only to find out you can’t monetize it.

No niche research tool needed – just go through every step and find a profitable niche today. Here we go!

  1. Start with an audience or a problem – not a product
  2. Stay away from touchy topics
  3. Avoid content made for kids
  4. Pick a niche with a consistent interest
  5. Avoid seasonal niches
  6. Target a more specific audience (or topic)
  7. Pick an audience that buys
  8. Competition: not too much, not too little
  9. Check if affiliate products are profitable
  10. Pick a niche full future monetization opportunities
  11. Pick a niche you can stick to

1. Start with an audience or a problem – not a product

When your niche is all about a product or product category, your online business is already at risk.

Why?

The main reason is that you don’t know who you’re talking to.

In turn, you don’t know what the pain (or problem) of your audience is, and how the product category can help them.

Let’s say your niche is all about wireless headphones.

What about them?

You’ll have a harder time creating useful, targeted content if you have no idea who you’re talking to.

If you don’t know your audience and their pains, you basically have no niche.

Let’s consider a few audiences and the angle you could use to create content for them:

  • frequent travelers: they like small, lightweight, noise-canceling headphones to make flying more enjoyable
  • music fans: they like good sound quality and loudness above all, maybe some branding too
  • sportsmen: they like sturdy, noise-canceling headphones that can take a beating and isolate them to focus before a game

… and so on.

Now, notice how all these audiences have problems you can solve:

  • frequent travelers: how to travel light, how to rest and be fresh when landing, how to spend less time at the airport, …
  • music fans: what are the best streaming platforms, what music is trending right now, what are the best headphones for future bass (or trap, or hip hop, … you name it), …
  • sportsmen: how to stay healthy during the offseason, how to perform at their best when competing, …

Now, these are audiences that have “problems”.

You can see how creating content for such audiences is so much easier for you, and so much more helpful for them.

By the way: what happens the day people don’t care about wireless headphones anymore?

If your project focuses on a product alone, the day it goes away, so does your project.

While products come and go, audiences are here to stay.

Takeaway

  • Start by picking an audience or a problem, not a product
  • If your niche idea is a product, ask yourself: who am I talking to? What are their goals, concerns and pains? How does the product category help them?
  • Make that audience or problem your niche idea (for now)

By the way, here is what to do if you can’t define an audience yet.

Focus on a topic – like personal finance, cooking, home automation, yoga, personal development, … It’s way better than focusing on a product.

2. Stay away from touchy topics

Do you have the right to create content about any topic you want?

Technically, you can.

But strategically, some topics are more profitable than others.

And that’s because to make money with your content, you need:

  • a platform (like YouTube or Google) to rank or promote your content
  • an ad network and advertisers that pay to display ads your on content (if you want to monetize your content that way)

As such:

To generate the most revenue and appeal to a wide range of people and advertisers, you’ll have to let go of touchy topics.

The reason is simple:

  • most advertisers don’t want to be associated with touchy topics
  • most content creators want to keep their ads safe and family-friendly

Now, let’s focus on content creators for the rest of this guide.

Fewer advertisers willing to put their ads next to your touchy content means less revenue.

It’s that simple.

(And if you don’t want to make money from ads, bear in mind that platforms Google or YouTube may still not rank or promote your touchy content.)

Touchy topics that reduce ad revenue

To make sure you maximize your ad revenue, you probably want to stay away from:

  • Violence
  • Harmful or dangerous acts
  • Hateful content
  • Incendiary and demeaning
  • Tobacco-related content
  • Recreational drugs and drug-related content
  • Firearms-related content
  • Adult content
  • Adult themes in family content
  • Controversial issues and sensitive events

(The YouTube advertiser-friendly content guidelines are a good read if you want more details.)

And to be extra cautious, you should probably let go of anything related to:

Sure, you’ll always find advertisers that advertise about a touchy topic. Or brands that sell items related to touchy topics.

And you can definitely make money by creating a YouTube channel or website about – for example – guns or alcohol.

But if you don’t know exactly what you’re doing, it’s probably a good idea to find a niche that is advertiser-friendly.

Takeaway

If you want your content to be appealing to most advertisers – and thus maximize your revenue – it’s best to stay away from touchy topics entirely. Especially for your first project.

3. Avoid content made for kids

Most countries and platforms want to protect kids from everything wrong happening in the world.

As such, if you want to make content for kids, it has to be 100% family-friendly: no touchy topic, profanity, violence, hate, adult content… you name it.

But creating the perfect content made for kids (like music for kids, stories for kids, cartoons, …) might still not be enough!

In fact, with rules like COPPA (Children’s Online Privacy Protection Rule), you might earn (a lot) less money from ads.

As stated on the official YouTube blog:

We will also stop serving personalized ads on this content entirely, and some features will no longer be available on this type of content, like comments and notifications.

Source

No targeted ads means lower ad revenue – period.

The problem with content made for kids

Brands and advertisers are willing to pay (a lot) more to put ads in from of the perfect prospect. Because when they do, they know their ads perform a lot better – and thus their sales too.

And the way to do that is to target people based on their age, interests, household income, prior browsing history, …

If brands and advertisers can’t target people on your content, they might still want to pay to put ads on it… just for a lot less money.

And that’s because they don’t know who they’re talking to.

So the right prospect is now lost in the flow of people not interested in what they have to sell.

As a result, the cost of non-targeted ads is lower than targeted ads. And because the cost (or CPM) is down, so is your revenue (or RPM).

By the way, don’t think the USA or YouTube are the only ones.

You can expect more countries to create such laws for kids, and more platforms to follow YouTube’s lead.

And sure, ads are not the only way to monetize a niche website or YouTube channel. But it’s a pretty fast and straightforward one – and you shouldn’t dismiss it.

Takeaway

Unless you have no other niche idea, it’s wise to pick a niche with no content made for kids.

4. Pick a niche with a consistent interest

Let’s say you wanted to start a blog about virtual reality.

If you’re a newbie in this product category, you might think it makes for a great niche.

Well, think again.

If you were to search “virtual reality” in Google Trends for the last 5 years, you would see this rather scary curve:

virtual reality google trends 2015 2020
A graph of the interest for virtual reality on Google Trend between 2015 and 2020

It’s hard to say if the spike we see in March 2020 will kick off a new upward trend. I still see a topic that doesn’t recover from its December 2016 all-time-high interest.

If you wonder, the two side-by-side spikes you can see every year are:

  • Spike #1: Black Friday
  • Spike #2: Christmas

(By the way, you’ll see those for many, many topics.)

Sure, some industries use virtual reality big time, like healthcare, training, engineering, military… but it doesn’t seem to capture the general public’s interest.

And virtual reality might interest more people in the future, but I wouldn’t bet on it just yet.

Here is another example – the trend for Facebook for the past 5 years:

google trends facebook 5 years

You want to avoid this kind of graph at all costs.

Of course, Facebook is not a niche – it’s not an audience nor a problem. I just wanted to show you what a declining trend looks like.

If you come across such a downward trend in a niche, let it go and find something else.

Because remember: a declining interest means a declining traffic, thus a declining revenue overall.

And you don’t want to create content for a niche that is being abandoned, do you?

Stay away from topics with declining interest.

The problem with spiking / trending topics

Creating content for a topic that gained a lot of interest quickly is also a bad idea.

It’s probably even worse than a declining topic: at least with a declining topic, you know whats going on.

Let’s see what a rapidly spiking niche looks like when it blows up:

widget spinner google trend may 2017
Google Trends for widget spinners in May 2017

I know what you’re thinking when seeing something like this: “this is the best niche ever, look at that growth!”.

Let me tell you: when you see this kind of spikes in the span of just a few weeks, RUN FOR YOUR LIFE!

Seriously – the spikier the trend, the less likely it is here to stay in the long run.

Don’t believe me?

Well, people don’t seem to talk about widget spinner anymore, right?

But don’t take my word for it, just trust the trends:

widget spinner google trend last 5 years
Google Trends for widget spinner in March 2020

Ouch!

Okay, a widget spinner is a product (booooo! we want audiences!) – but you can see how QUICKLY they vanished.

What a good interest for a topic looks like

A good interest is a consistent interest.

And when I say consistent, I don’t mean consistent consistent, like a flat line. I mean consistent because they don’t variate much over time.

What you’re looking for is a constant, slightly upward or slightly downward trend.

For example, here are the trends for yoga for the past 5 years:

yoga google trend last 5 years

This is a niche with a consistent interest – great!

Notice the spikes: you’ll find them in every niche, this is normal.

Here, you have:

  • one in January for the new year’s resolutions, yay! and
  • one in June for the international yoga day

Now, there’s still a problem with yoga, and we’ll address it later in this article.

Here is the trend for wearable technology for the past 5 years:

wearables google trend last 5 years

Here you can see the slightest downward trend – this is still all good.

There are no crazy spikes in the last few weeks, nor a consistent decline. (Pay attention tough, wearable technology is veeeery close to a product!)

And obviously, a slow and consistent growth is great too.

instagram google trend last 5 years

Again, Instagram is not a niche. But if you find a topic that has such a trend, you can safely go for it.

Slow and steady wins the race!

Takeaway

If you see:

  • a very rapid spike in growth or a consistent downward trend, switch to another niche
  • a stable trend, or a gentle increase or decrease in interest, you’re good to go – gentle is the important word here

5. Avoid seasonal niches

Let’s say you want to create content about fishing. No problem per se: fishing is a niche with a consistent interest over time.

BUT – and this is a big but – it’s a seasonal niche.

Look:

google trends fishing 5 years
Google Trends for fishing for the past 5 years

See how the interest for fishing goes up and down every year?

This is a seasonal niche.

Obviously, people are more interested about fishing in the summer than in the winter.

Same goes for niches like:

  • camping
  • motorcycling
  • skiing

You get the idea.

Now, because the interest in a seasonal topic is not steady during the year, so is the traffic to your content. And in turn, so is your revenue.

Make sure you pick a profitable niche with a steady stream of income throughout the year.

Now, you could offset the loss of interest of one niche by creating a second project which as an opposite seasonality.

Like, for example, motorcycle and skiing:

google trends seasonal niches motorcycle skiing

In theory, this looks great.

But here are a few problems with having 2 projects with opposite seasonalities:

  • if you’re just getting started, Google might not index your content in time for the high season
  • you don’t know if the interest level of one niche will match the other – see how skiing gets less interest than motorcycle
  • the shape of the seasonality is not the same in both niches – see how motorcycle has a wave shape, whereas skiing has spikes
  • you’ll need more time to create content for both projects
  • maintenance time and associated costs will double as well

Takeaway

Unless you already have another project with a substantial amount of content and want to diversify, don’t pick a seasonal niche.

Just pick a niche with a consistent interest during the year – check on Google Trends before going on.

6. Target a more specific audience (or topic)

As we saw at the beginning, picking an audience is the key to having a successful niche website or YouTube channel.

But that’s not enough: you want to target a small, specific audience. At least when you start.

The reason is simple:

If you try to please everybody, you’re basically appealing to nobody.

Now, here is the trick:

An audience is not a group of people sharing the same age, or location, or gender. It’s a group of people sharing the same interests or having the same aspirations, concerns or pains.

Let’s see how we can go from a broad audience to a specific audience:

  • pregnant moms => pregnant moms who are C-level managers: they typically have a busier life and a lot of work commitments. Here, content around productivity tricks and relaxation methods would be great.
  • tennis players => tennis players over 65: the elderly have a harder time running and hitting the ball. They need specialized techniques and moves. They certainly need dedicated content, too.
  • physiotherapists => physiotherapists for soccer players: they will need to learn which are the most common pains and injuries in soccer, and provide care accordingly. They could use a closed community or network, too.

I could go on and on, but you get the idea.

Once you’ve established yourself in a very specific niche (talking to a very specific audience), you can think of expanding your audience and topics.

In the meantime, you’ll have better and faster results by targeting a more specific group of people with a unique set of problems.

Now here is the trick with choosing a specific audience:

  • Too broad, and your content will try to appeal to everyone, thus helping no one.
  • Too narrow, and you’ll talk to a handful of people. Very limited traffic often means very limited revenue.

But here is what I learned from my coaching sessions: most of the time, people tend to pick too broad a niche.

So, be more specific – target a smaller audience!

Takeaway

The more targeted the audience, the more precise their goals, concerns and pains.

Once you target a very specific audience, you can start helping them in a way that no other broad business can.

You want them to see your content and think:

“HELL YEAH! This is exactly what I’m going through! This information is priceless!”

Now, don’t invent target audiences with made-up interests or problems that make no sense:

  • pregnant moms => tattooed pregnant moms: what does having tattoos change to being pregnant?
  • tennis players => tennis players who play twice a month: what do they need that is so different from a player playing once (or 4 times) a month?
  • physiotherapists => vegan physiotherapists: what does eating preferences have anything to do with physiotherapists?

You can see how these targeted audiences make absolutely no sense.

These people don’t have specific needs compared to the broader audiences.

7. Pick an audience that buys

You might have chosen the perfect niche up until now – that is to say:

  • an audience or a topic (not a product)
  • staying away from touchy topics
  • with content not made for kids
  • with a consistent interest over time
  • that people search for all year long
  • talking to a specific audience

But if the audience you pick doesn’t buy, your project is doomed to fail before you even start.

Now let’s be clear:

You can monetize every content, granted you address your audience’s problems like no other does.

But you really have to think long and hard about the typical person in your audience.

If you don’t, you run the risk of creating content for a long period of time, and never make any significant amount of money.

Takeaway

Take into consideration these 3 points:

  • age: people tend to spend the most when they are between 25 and 54 years old
  • niche usefulness: the greater the impact your topic has on your audience’s life, the more money you’ll make
  • typical product price: not too cheap and not too expensive (more on this later in this article)

Of course, more things come into play when picking the “perfect” audience.

(Spoiler alert: it doesn’t exist.)

But if you nail these 3 points, your niche idea is already ahead of the game.

8. Competition: not too much, not too little

There’s one misleading idea you may already have come across:

You should pick a niche without competition.

A clueless business coach

Well, first: good luck with that.

Pretty much anything you can think of already has content created for.

Second, competition is a good thing.

Competition shows that there is a demand from a certain audience and that people make money from it.

So how do you gauge competition?

Go to Google and search for typical questions that people ask in your niche.

If most Google search results are:

  • community-driven forums: you may have found too small of a niche
  • big, established publishers: you may have found too large of a niche

You can apply the same method on YouTube, if you want to start a channel.

Takeaway

  • Search for typical questions and common search queries in your niche and check the search results
  • Aim for a niche with search results having a good balance of established publishers and community-driven forums
  • Too many established publishers in the search results? Pick a more specific audience or topic
  • Too many forums? Pick a broader audience or topic
  • Unless you have no other idea, stay away from fitness, weight loss and personal finance – these are notably difficult niches to break through

Sure, if you find only community-driven forums in the search results, you might be the first one to stumble upon a niche.

But 95% of the time, it’s a good sign you should go for a broader niche.

9. Check if affiliate products are profitable

Affiliate marketing is a great way for brands and businesses to make money: content creators bring targeted prospects to their product or service, so they make more money.

But it’s a great way for content creators to make money, too.

When someone buys a product or service coming from one of your affiliate links, you get a commission.

And while it’s possible to find affiliate products or services in almost every niche, not every niche generates the same amount per prospect.

Here is why – consider the typical item in your niche:

  • If it’s cheap, your commissions will be very small. You’ll need a lot of traffic to generate even a small amount of money.
  • If it’s expensive, people will want to think before purchasing (if ever). You’ll need a lot of traffic to compensate for the very low conversion rate.

You also want to check your commission rates.

For example with the Amazon Associates Program, physical books get you a 4.5% commission while televisions gets you 2% (source).

Also, Amazon cuts their commission rates over time so… always check the rates.

Takeaway

  • Target niches with affiliate products that sell between $50 and $300. Less than 50$, and you’ll need a lot of traffic. More than $300, and people won’t impulse buy.
  • Check out the commissions rates and run the math. Is it worth it?
  • If you want to monetize your project with the Amazon Associates Program, use my Amazon Affiliate Commission Calculator to know how much traffic you need and how high your conversion rate should be.

10. Pick a niche full monetization opportunities

The quickest way to start making money online with your content is to run ads on it and feature affiliate links.

But ads and affiliate links are not the only ways to make money, nor the most profitable ones.

Actually, the other ways to monetize your niche will probably make up the majority of your income (eventually).

Takeaway

Pick a niche that you can also monetize with:

  • Digital products: think ebooks, downloadable spreadsheets, …
  • Physical products: your own products but also merchandising
  • Membership community: sell monthly memberships to a closed community where you answer questions and insiders can hare their tips
  • Online courses: package your knowledge in a course people can take online
  • Coaching: give specific instructions to people about how to achieve their goals in one-on-one sessions
  • Workshops: teach a new skill to a group of people in real life
  • Keynote speeches: share your thoughts and knowledge in front of an audience
  • Brand deals: get paid to promote a brand on your content

The more monetization opportunities, the better.

Think in advance how you can take advantage of the monetization opportunities above, and pick a niche with plenty of them.

11. Pick a niche you can stick too

Believe it or not, this is probably the most important point of them all.

You don’t need to be an expert to start a blog or YouTube channel. Just being an enthusiast with some knowledge is plenty enough.

You don’t even need to be passionate about the niche you have chosen.

The single most important factor when it comes to generating a revenue is to be able to put out content regularly for a long period of time.

Being able to write an article or publish a video consistently for years is what will make your project successful.

Creating more content is the defining factor behind any success.

I’ve seen it time and time again with my own projects or my clients’ projects. It’s also true for successful YouTube creators.

And I want to bring this home especially if you want to create a passive income with your niche website or YouTube channel.

Creating content is:

  • time-consuming: a great blog post or video takes hours to create. Sometimes days, sometimes weeks.
  • frustrating: it can take months before Google or YouTube decides to properly rank / promote your content (even if you master SEO and copywriting).
  • never-ending: even if you write evergreen(-ish) content, you can’t expect to make money after just a few blog posts or videos. It’s a non-stop process.

If you know what’s coming and you’re willing to endure it for years, you’re off a good start.

Takeaway

Let’s imagine these projects:

  • Niche A is a perfect niche: perfect audience, interest, seasonality, and plenty of monetization opportunities. But you don’t think you can create a lot of content for (for whatever reason).
  • Niche B is missing some marks: the udience might be too broad, or the interest is slowly declining, or not all monetization opportunities are a great fit. But you’re prepared to create content for that niche for years.

Niche B will have a way better chance of succeeding than niche A.

Consistency really is the name of the game.

That’s the “secret”.

One last thing…

All the content on Misfit Hustler takes me a lot of time to create.

And what I shared with you here is basically what I share with my private coaching clients – for free.

So if you enjoyed this guide, please share this page with a friend or a community that may find it useful.

It would mean the world to me if you could spread the word.

Much love,
– Alessandro