By definition a niche website is a site that’s focused on a very specific topic. If you think about it though this definition covers pretty much any single site on the internet. A surf website is a niche site, a technology website is a niche site… although a site about surfing in Bali or wireless keyboards are even “nichier” sites if that makes any sense.
Now what do people really talk about when they talk about a niche site or a niche website?
In the internet/passive income world a niche site is a site that’s built around a very specific topic which has a high search volume (number of searches per month involving a particular keyword or keywords) compared to the ranking competition (how many sites are competing to rank first in Google for those keywords). The strategy behind a niche site is that by specializing in such a concrete topic the site will quickly be seen as an “authority site” in that topic by search engines and therefore will get to the first positions in the search results relatively fast.
Niche sites don’t try to go after very large audiences but instead target smaller, very specific groups of people. The target audience of a niche site is so small that big brands usually don’t even bother going after them, making the race to Google’s number one position in the search results much easier.
Once a niche site makes it to the first page in the Google results for a particular keyword or set of keyword the idea is that this traffic can be monetized by offering people who land on the site products or services that are related to the search they just made.
This is cool, but do you have an example?
Let take for example a big category such as “music instruments”, inside this broad category we could find a smaller category called “string instruments” and inside this an even smaller category called “guitars”. But a niche site will go even further and create a brand new category inside “guitars” called “guitar picks”.
- Music Instruments
- String Instruments
- Guitar Picks
- String Instruments
The further along you go in the category tree the lower the potential reader number will be, but also the easiest it will be to rank first on Google and other search engines.
If you think about it most big brands won’t have a “guitar picks” category on their site, even though they might sell guitar picks, so there is a very good chance for a site that only specializes in guitar picks to reach Google’s first page relatively fast for keywords such as “best guitar pick”, “professional guitar picks”, “metal guitar picks”, etc. and gain traffic.
Traffic is nice, but how does a niche site make money?
Once you have the traffic there are many different ways to monetize it.
Because the niche “guitar picks” is so narrow even if the niche site manages to capture a high percentage of the people searching for that term it still won’t have crazy traffic numbers, so monetization strategies such as CPC or CPM advertisement probably won’t be very effective.
Affiliate marketing on the other hand is the way most niche sites tend to go. By becoming an affiliate of a brand that sells guitar picks you can review and recommend guitar picks and get a commission if people end up buying those products through your site. This tends to work well because even though the traffic figures of a niche site usually aren’t extraordinary they do have very high quality visits. After all, if you ended up in a site that talks just about guitar picks you probably were not searching for skateboards…
Another good way to monetize traffic to a niche site is by building a product such an ebook or a course targeted to that specific audience and sell it directly through your site keeping 100% of the profits.
A different approach, which does not fit into the passive income definition so much but can still be highly profitable is to sell your services through your niche site. Sticking to the guitar picks site example if you were a guitar teacher you could offer your services to people who visit your site, as it is very likely that someone looking to get a guitar pick is in the process of learning how to play the guitar.
There is no formula that will tell what is and what isn’t a niche site. It’ up to each of us to find the perfect space were we can jump in with very little budget and quickly gain popularity so that Google and other search engines start ranking us high enough to gain traffic. Once we get the traffic we need to find a monetization strategy that makes sense for our niche and traffic numbers.