How to select a niche when engaging in affiliate marketing

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Picking a niche for an affiliate marketing website requires a lot of skill, intellect, and research. I have built a few affiliate sites and have learned a lot in this domain. 

I want to share these insights with you. But first, some more background on the affiliate space. 

Starting an affiliate site is a very common way in which people try to quickly earn money. It’s a very easy business to enter. Anyone from the comfort of their couch with a few hundred dollars can create a website, host it, and add content to it. 

But although it is incredibly easy to start a website, it is much more difficult to succeed in making it a highly profitable business. If making a lot of money on an affiliate site was easy, everyone would do it. 

There is one core principle that I strongly believe in when it comes to business: A free market does not allow for get-rich-quick schemes. 

With that in mind, you will put in the same level of effort and work to build a website regardless of its profit potential. So picking the right niche is how you mitigate risk and ensure that you are on the right path. 

You must be passionate about it

Not all niches are created equal. Given this reality, you should pick niches you care about. What are you interested in? What are your hobbies and pastimes?

I am passionate about remote work because I work and do long-distance telecommuting. As such, I started a website that helps people work from home. There are many niches – like balding, mom blogs, or golf equipment – that I know little about and don’t find well aligned with my lifestyle.

You are going to become a subject matter in whatever niche you pick. You will spend time learning about the market, the companies in the market, and the affiliate sites you can partner with. 

So the first step to affiliating marketing is to engage in topics you either know a decent amount about or that you will want to dive deeper into. 

Affiliate markets start with the customer and work backwards. They work vigorously to earn and keep customer trust by producing high quality and relevant content. Although affiliate sites pay attention to competitors, they obsess over customers. 

You can’t obsess over customers – and their needs and buying behaviours – if you do not empathize with who your users are.

If you want to build a relevant affiliate website that generates predictable free cash flows, you need to think like a leader. And leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire client base and never say “that’s not my job.”

That’s why picking a niche you can “own” is so important.

Margins matter

Affiliate payouts vary profoundly by the vertical. For example, Albertsons pays 1% for food affiliate payouts. In comparison, many CBD sites pay upwards of 40%. Which one sounds better to you?

This is why niche picking is so important. Holding all else constant, your growth and business success will depend on the margins that affiliates in your space payout. So do research and learn which verticals and domains have attractive margins. 

In general, areas that do not allow advertising online (or are very expensive, like lead generation apps) have higher margins because the firms in these spaces still need to acquire clients.

When starting an affiliate website you need to have relentlessly high standards — many people may think your standards are unreasonably high. That is why many affiliate sites do poorly. They are filled with low quality and outdated content. 

If your goal is sustained success you need to strive to continuously raise the bar and drive your site to deliver high-quality products, services, processes and insights. You will need to work hard to ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.

Given that you will need to put in a lot of effort upfront, you should pick a niche that will reward you. In general, higher-margin niches are far more interesting in the short and long terms.

Is it a fad? Or is it here to stay?

Thinking small is a self-fulfilling prophecy. Fads are things that come and go – like diet trends or fashion staples. Fads are hard to monetize in the affiliate space because by the time you get credibility in the search engine, the affiliate companies you are working with will be on to the next thing. You know what is not a fad? Sleep, medical health, time management, or holiday presents. These topics are here to stay. You likely know about these fields as they impact your life.

Sure, demand might fluctuate but in general, people will want to consume these goods tomorrow. For other niches, the future is less clear. The durability of a field is your niche picking friend.

When the future cash flows of a business are less clear, stay away. Things that seem great today but have a truncated shelf-life are topics you should avoid. As an affiliate leader, you will create and communicate a bold direction that inspires results – within search algorithms and for your users. You need to think differently and look around corners for ways to serve customers.

One way to do this is to earn sustained trust. Building a site that aligns with fads hurts your credibility from an SEO and customer perspective.

If you can’t identify if a product or niche is a fad or sustained trend, speak with your family and friends about it. Be self-critical, even when doing so is awkward or embarrassing. Benchmark your ideas and vision against the best.

Know what success looks like and how to measure it

Anybody who enters the affiliate marketing space needs to operate at all levels, stay connected to the details, and spend time on their site frequently. You must be sceptical when metrics and anecdotes differ and embody a mindset that says “No task is beneath me.” 

Why?

Because selecting the right niche is a labour of love. You will need to track how many people are coming to your website, how long they are staying, how these people are hearing about you, and what they are buying.

In addition you will need to set up affiliate relationships, track your earnings progress, and set goals. Selecting the right niche will enable you to focus on the key inputs for your business and deliver them with the right quality and in a timely fashion. Despite setbacks, you will be forced to rise to the occasion and never settle if you want to sustain or grow your traffic.

Conclusion

You can do niche picking by hand, through quantitative research, or you can leverage a list of seo tools.

Picking the right niche is the most important step to getting affiliate marketing right. It sets your pricing floor and, most importantly, your ceiling. If you pick well, you can make large margins in spaces that are growing rapidly. If you pick poorly, you can work tirelessly to drive results and see the limited upside.

Remember: the amount of work is the same to build a small or large affiliate website. Both require content, links, and traffic. But if you pick wisely – and select a niche that has high-profit potential, that you personally enjoy, and that is here to stay – you will be increasing your odds of success. 

And that is the most worthwhile investment of all.


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