Some people might argue that the days of discovering hot niches are long gone – mainly due to market saturation and fierce competition from the wannabe gurus.  What these people don’t realize is that niche marketing will never die, and new niches are born every minute of every hour of every day – you just have to know where to look!

Is it possible to generate massive profits using niche marketing and continuously discover “secret” untapped markets – all without your competition knowing?  Well to answer that question we first have to look at the many benefits of niche marketing and why it is such an effective business model.

To start things off, niche marketing is probably the easiest way to make a buck online within a reasonable amount of time.  The reason being is that niche marketing is less competitive, and often more targeted compared to a major market such as Ringtones or Weight Loss.  Less competition means easier rankings in the search engines.  Why spend three months trying to take the number one spot in a saturated market, when you can start on Friday and be at number one in Google by Monday?

Secondly, to be successful at niche marketing you only need a few solid skills:  effective keyword research and the ability to put together websites within a short amount of time.  Because niche marketing typically relies on organic traffic (natural traffic from the search engines) there are no psycho budgets required or massive pay per click campaigns needed.

Simply do your research, find the niche, put up your website, monetize it and get some links.  From that point you’re only responsibility is to keep the content fresh – and the traffic steady!

Lastly, unless you’re into trends or seasonally influenced markets, niche profits can be fairly reliable over the long run.  The trick to creating a sustainable business from niche marketing is to simply be aware of your surroundings and make sure your portfolio of hot niche sites are spread amongst various markets.  The end result should give you a rock solid Internet based business that is sustainable – as well as lucrative!

In actuality, there really isn’t a secret to discovering hot niches.  With the right resources, an eye online and an eye on the streets, you should have no problem catching every opportunity before it swims downstream.  I shall warn you though, niche marketing is not for the lazy-minded!  You have to remain sharp and focused at all times – because with millions of millions of people connected to the Internet the “I’ll do it tomorrow” attitude will ultimately lead to your failure.

In it’s most naked form, niche marketing is nothing more than targeting specific keywords and phrases and optimizing your website with these search terms.  When done successfully, a potential buyer will type any one of your researched keywords into a search engine, like Google, and see your website – or a link to your website – within the first 3 positions of the search results.  They will click the link and be directed towards the indexed page of content on your website and (hopefully) follow through to purchase your product or click your recommendation.

Now this may seem easy enough in theory, but make no mistake, optimizing for the wrong set of keywords can do you a great deal of harm.  For example, the name of a product your promoting is also the name of a popular library in New York City – and instead of receiving targeted traffic who are looking for information on the product, you are receiving hundreds of hits every week with people looking for the architectural history of this library!

So how do you find the right keywords to target?

Well the most common tool used for uncovering profitable keywords is Wordtracker.  Their keyword research tool allows webmasters to dig deep within the databases of several popular search engines and reveal the exact phrases that people type into the search engines when they’re looking for something.  Take a look at the screen shot below:

I’ve typed the word “tattoo” into Wordtracker’s Keyword Research Tool, and I am shown the results taken from the databases of Google, MSN and Yahoo.  Having this power gives you the ability to not only see how many times a certain phrase is “searched for” but also how many existing websites are competing online for the same keyword.

With relation to niche marketing, you want to optimize your website and marketing efforts towards keywords which have a good demand (searches per day) with reasonably low supply (competing websites).  Targeting these phrases which have high demand and low supply will ensure that you rank on the first page of search engines when these specific terms are typed into the search query.  And with all that free targeted traffic coming to your website, the money will soon follow!

Once you’ve mastered the process of building keyword lists and knowing which keywords to target, you will notice immediately that your niche marketing efforts will begin to translate into clicks and dollars.  With a little bit of trial and error you can be on your way to dominating any niche regardless of its size!

If you are a small business owner who provides a product or service, you absolutely need to be using niche marketing!  Whether you consider your product to reside within a “hot niche” is completely irrelevent because focusing on niche marketing will not only keep you better in tuned with what your clients want, but also give you a massive advantage over the hoards of struggling businesses who are wasting their time trying to keep up with the big timers.

What exactly do you need to succeed at niche marketing?

1. As stated before, you need a product or service to sell.  I know this may sound obvious to most, but you’d be surprised at the responses I’ve received when asking this same question.  It is important that your product is specific and caters to the unique needs of a targeted client base.  This can usually be an altered or improved version of a mainstream product, but with a more robust list of features and/or options.  Big companies like to cut corners – so you want to leave no stone unturned.

For example: The company who invented biodegradable golf tees.  They recognized a problem with plastic golf tees often getting left on the courses as well as being non-recyclable, so they came up with a solution that is not only beneficial to the player but also to the club owners and the environment – 4 birds with one stone!

2. Next you need to research your market and narrow down their needs to a specific niche.  Pay attention to all details including age, location and Geo-targeting, income level, sexual orientation and marital status.  The more accurate you can target your niche, the more effective your pitch will be.

For example:  You discover that all golfers in your local area are between the ages of 23-65, with 73% of them being married men in the upper class income bracket.  Within that 73%, more than half of them golf only on the weekends.  The value of this information is priceless!

3. Get a good grasp on the economical aspects of your niche product/service.  Whether you have a product already or are still in the developmental stages, you need to analyze certain factors such as cost, inventory, competition and required skills needed to take your product from your brain to your bank account.

For example: How much will these golf tees cost per unit?  Is outsourcing an option, or would it be more profitable to manufacture in-house?  These are all examples of economical related issues you have to face.

4. The last part is the best – how will you market your product? This step requires creativity and “outside-the-box” thinking.  The most effective way to market any product or service is on the Internet, so you have to decide on branding elements such as your logo and slogan.  You have to find a web designer who can capture the spirit of your product while maintaining the credibility of your sales pitch.

You will use your research and reach potential clients through various forms of media and technology.  How well will your married golfers react to an ad banner with a sexy girl in a bikini bending over to pick up a golf tee?  Will they react well, or will the promiscuous nature make them question the credibility of your product?

Niche marketing is all about discovering the ideal customer for your product, not the other way around.  Once you reveal the target audience, your product will sell itself because you KNOW there is a need to be filled.  Be sure to follow these four steps and you’ll be on your way to niche marketing success in no time!