Niche marketing on the internet is probably one of the most popular ways that people try to make money online.  The reason is that it is widely viewed as a potentially passive source of income.

The original idea behind niche marketing is that you set up a one page website offering a solution to a problem.  This might be providing a solution for training a dog, growing awesome tomatoes, or learning how to day trade.

Typically, you sold a solution in the form of an ebook.  Then, you just figured out how to get traffic to that site.  At first we used pay per click advertising, but also developed strategies to get to the top of the google rankings.

This is was what I first learned in the world of internet marketing when I attended an expensive week long course hosted by the Internet Marketing Center, which had been the business of legendary marketer Corey Rudl until he passed away in 2005.

As time went on, the strategies became a bit more sophisticated and you learned how to put up more elaborate websites very quickly, with the goal of collecting a few dollars each day from dozens of websites where the main income driver was Google Adsense.

Well, the internet has evolved quite a bit since then…Google got smarter and people are more informed.  To make a living with niche websites, you need to produce really good content that is provided on a more professional looking website.

One of the best examples of a high performing niche website is Foodtruckr, a niche website developed by Pat Flynn of Smart Passive Income fame.

As you’ll see, Pat has taken this niche website idea to another level completely, and he’s done quite well.  However, as is the case with many professionals in the internet marketing world, he is at a level where he can hire a team to develop what he needs.

This does not mean building a niche empire can no longer be done.  It will just take a lot more time, effort and some creativity.

Here are some steps you can take to get started…

Online Niche Marketing – Step 1 – What to market?

Similar to what I wrote about Authority Blogs, you need to come up with a list of topics in which you have some strong interest.  However, in this case, you can even narrow your focus considerably to something like a specific product.

Why would we want to build a website around a specific product?  Because these days, you can buy just about anything on Amazon, and Amazon offers commissions for every product a person buys on that site after clicking on a link from another website.

Now, the commissions are pretty low, from 4% to up to 8%, so you aren’t going to make a lot of money selling cheap products on Amazon, but it can be part of any income stream you offer on a website.

Since you will ultimately want to put limited effort into these types of websites once you get them up and running and full of content, you want to make sure you are only building website around products or interests that people are actually searching for, and paying money for.

A quick way to figure this out is to simply do a Google search of the interest or product you are thinking about, such as “best survival knives.”  If you see sponsored ads, you can bet that people are paying good money for such products.

Then, scroll down and see what kinds of websites you find dealing with the product.  If you find a niche type website where they are offering products sold elsewhere, chances are you’ve found a decent niche.  Here is an example of a niche website in the survival knives niche… http://survivalknifecage.com/

This website was found on the first page of my google search for “best survival knives.”

You’ll notice that website is quite simple compared to the Foodtruckr website that Pat Flynn created.  That suggests to me that if you wanted to build a niche website around this niche, you could have some success by going over and above what you see on this particular survival knife website.

Keep in mind, I have no idea how much income that site provides to its owner.  Perhaps not a lot.  However, if it is a site that can bring in a couple hundred dollars per month or more, then you may have a winner.

What you’ll want to end up doing is start out with at least ten solid ideas for niche websites.  You can make it an initial goal of building one such site per month (remember, we want to go over and above what the competition is doing.  It used to be you could build 10 of these per month, and then just build links to them.  The game has changed…quality over quantity).

Online Niche Marketing – Step 2 – Setting Up Your Niche Website

Again, similar to setting up our Authority Blog, you’ll want to get yourself a hosting account.   You can search for the right domain and set up a hosting account at Bluehost which is the hosting service I use for this blog.

Your choice of theme is up to you.  You don’t need a super fancy theme if your intent is to build many niche websites.  Simple and clean is what you want to strive for.

One difference between the authority blog and the niche site, however, is that you’ll definitely want to be sure that you have your legal pages set up and visible…these include your Privacy Policy page, Terms and Conditions, Copyright and Disclaimer page.

You’ll also want to set up a Home Page, About Page, Contact Page and a page where your blog posts will be found.

I’ve set up a sample niche site in the competitive golf simulator niche.  It will give you an idea of another way to set up a niche site…  Golf Simulator Headquarters.

You’ll notice that unlike the blog on which you are reading this post, my golf simulator website utilizes the keyword in the domain name.  For a niche site, it is more important to do that than for an authority site.  However, the importance of having an exact match domain name for a particular niche is not as important as it used to be.  At the same time, you do want your domain name to reflect what the site is about.

Online Niche Marketing – Step 3 – Getting Traffic

In the world of niche marketing, getting traffic to your niche website is tricky.  Unlike the Authority Blog, most of your traffic for a niche site will come from the search engines.  In order for that to occur, you’ve got to get your site ranked highly in Google, Bing, and Yahoo.

Ranking well in the search engines is still a function of getting links to your website.  While there are many black hat and grey hat techniques for getting traffic, I recommend staying as natural as possible.  It will take more work, but your chances of getting penalized by one of Google’s famous Panda updates will be minimized.

At one time, I had a niche website that is no longer in existence ranked number 1 on Google.  It then got penalized for one reason…I got to that ranking through the use of article marketing.  I wrote articles, spun them, then posted them in a number of different article directories.  I actually used a service that did that for me.  Google then slapped those article directories with a big penalty, and many sites like mine got hit hard.

With that said, writing an article or two of content for an article directory such as EzineArticles won’t hurt you. Just be sure that it is original content that won’t be found on your website.

Another great idea is to set up a Youtube channel around your niche and post some informative videos about your niche.  In the video description, place a link back to your website.  The more of these videos you can do, the better.  If you do them well, you’ll see your traffic take off.

Ultimately, writing great content for your website as often as possible, and then distributing that content widely, is the best way to get your niche website ranked.  So, you are going to want to write quite a few, quality articles, and then distribute them to social media sites and social bookmarking sites.

Some of the other things you can do include answering questions on Yahoo Answers, participating in forums related to your niche, and leaving helpful comments on other blogs related to your niche.

There is a lot more you can do to drive traffic, and I’ll cover that in a separate post, but in the beginning, your primary focus should be on producing quality content.

Online Niche Marketing – Step 4 – Monetizing Your Niche Site

Last, but not least, you’ll need to monetize your niche site to make any money.  Most basic niche sites simply put up Google ads through Google Adsense, or are set  up to sell products through Amazon’s affiliate program.

There are tons of affiliate programs out there though, so how you monetize your site is basically dependent upon your niche.

Let’s circle back to the Foodtruckr.com website I mentioned earlier, developed by Pat Flynn.  That website sells products developed by Pat himself.  He then also offers products as an affiliate similar to what I do with this blog.  Anyone with a food truck business may want to have a website to help with their marketing.  So Pat provides resources for helping with that, such as Bluehost, website themes, email marketing tools, etc.

Ultimately, if you can, it’s a pretty good idea to offer different products so that your website can provide you with potential multiple income sources.  However, if you do have your own product to sell, it’s not a good idea to put up Google ads, because those ads will take your visitors away from what you want to really sell them.

Final Thoughts

I like to think of niche marketing similarly to how a real estate investor may think of owning multiple properties.  The internet is simply filled with internet properties, and like in the world of real estate, new properties are created everyday.

The idea is that you want to build a nice portfolio of niche properties that will provide you with a decent income.  And, in some cases, if you want to grab a nice chunk of change all at once, you can even sell one of those niche sites as you would a piece of real estate.

Just remember, however, that do build a quality portfolio, there are no shortcuts.  So, don’t be in a hurry to build a ton of websites quickly, as they will probably end up being low quality, and as a result, won’t bring you any income.

It’s best to build a quality portfolio that is still manageable in size, because to keep them ranked well, you’ll need to continue adding decent content over time.

Ultimately, I think this is a very cool way to build an income stream away from your regular job, so I’ll be writing a lot more about this down the road!