I personally believe that building niche websites is one of the greatest internet marketing business models out there. When it comes to internet marketing, there are literally hundreds of different ways to go about making money. As you are probably aware, these can often be very exiting and enticing; however, they can often be difficult to implement as well. Unfortunately, niche websites are no different. There is a big learning curve to building niche websites that get free traffic from the search engines; however, once learned the process can be replicated over and over again. This is why I feel like its an excellent business model. In fact, I like this model so much, I will be blogging about how you can build niche websites step by step – you can follow along on the niche websites hub.
As you are aware, I have been building niche websites for a couple of years now and in fact support my family full-time on the income I generate through this business model. So, I can tell you from my first hand experience that the potential of niche websites is HUGE. Its a scalable business that really can be built into a multi-million dollar business. So here are the 3 main reasons why niche websites are an excellent business model to pursue:
- Its a growing market
- Its scalable
- It generates passive income
A Growing Market
If we want to analyze the niche websites market, we need to consider a couple of factors. First, are more people using websites? And secondly, is there growth in the spending for online advertising? The answer to both of these questions is a resounding YES! Here a cool little chart from Internet World Stats, that shows the increase in number of internet users over the years:
The amazing thing about this growth is that still only 30% of the world's population is using the internet. There is still huge growth potential. However, the real way that niche websites make money is typically through selling some sort of product or displaying advertising on your websites. So, what we really need to know is if online advertising is increasing. Here is a recent article that discusses how Google believes the online display advertising market will be expanding from its current $24 Billion market size to over $200 Billion annually. I can live with a 10 times growth rate! Anyway, I don't think I need to go any further here – more and more people are using the internet, and companies are spending more on online advertising. The market is awesome!
A Scalable Business Model
Being scalable simply means that you are able to replicate the process of building niche websites over and over again. There are actually a couple of different ways that you can scale niche websites into a much larger business. The first is to take the approach of Demand Media, Inc. (DMD) – well known for owning eHow.com. They simply have a few large websites such as ehow and produce TONS of content and generate income from advertisers on their site (including Google Adsense). As you can see from their income statement here, they produced over $250 million in revenues last year.
I run a similar model with a slight twist. Instead of maintaining one large website with various topics covered on it; I product lots of “niche” websites that focus on one exclusive topic for each website. I still get traffic from the search engines just like Demand Media does; however, my websites are more tightly focused on individual topics or keywords. My model is also scalable in the sense that once I have built one site, I can move onto the next and the first website continues to make me money even without much attention.
Then to really scale this business you can hire others to write content for you, build websites for you, promote your site, build links, or many other tasks. So, once you have learned the ins and outs of developing niche websites, you can begin to hire others and really build this business on a large scale (if you want).
Passive Income Potential
To be honest, I usually hate talking about passive income because its usually associated with a bunch of hype/snake oil and someone trying to sell you something. You all know what I mean, its about half the make money online products out there. However, I only talk about passive income here because I am living proof that its possible. I have websites that I have built over 2 years ago and have put almost no effort into since that time, that are still making me money every day.
In fact, I could literally do nothing for a month and my income would be basically what it was last month. Now I don't expect that this would go on forever; however, overall, the maintenance of niche websites is very small. You build them once and get them ranking in Google, and then the traffic starts coming in day after day whether you do anything or not. I will discuss what is needed to maintain your websites in the future; however, for now I just wanted to point out that there truly is passive income here.
Obviously some websites will require ongoing attention and the search engines will change over time; but there is a much larger passive element to this business model than a traditional brick and mortar business for example.
Don't Be Deceived – This Business is NOT Easy!
Overall, building niche websites that target a specific topic and that rank well in the search engines are a great business model because internet advertising is increasing, its a scalable business, and it holds a lot of passive income potential. I will be discussing in the coming weeks and months how to go about building a niche websites business – such as I have done for myself. However, I have to give you fair warning that this is NOT an easy business! Yes, it has great potential, but there is a tremendous learning curve and you are likely to see a lot of failure before you see any success. In fact, I had years of failed websites before I saw any real income (read my recent guest post for some of my failures).
The ability to judge your potential competition is extremely difficult and most people will just never “get it.” I hate to say that, but from what I've seen, despite even my own coaching, some people are just never able to put all the pieces together. In addition, there is a certain element of luck involved. Some websites will just do better than you ever expected. I have been lucky and found a few over-performing keywords (but I have also had many more failing websites).
Anyway, if you get involved in niche websites, you need to view this as a business venture with risk. I make no guarantees of your success. You may find that passive income you are looking for; or you might find lots of hard work with no monetary rewards. This is true of any business, and anyone that tries to convince you otherwise is probably selling a junkie course or ebook.
So, there you have it – there are some great reasons why niche websites are an excellent business model, but you need to be aware of the risks as well. What do you think??? I would love to hear your thoughts below.