Once you have a list of possible niche ideas, it’s time to take a cursory look and see if any of them hold promise. This can be done online for free, using these sites -

google.com/trends/hottrends: This site will give you statistical charts about search trends. You’ll be able to tell at a glance if interest in a particular niche is growing or declining. Obviously, you’d want to find a niche that’s showing increasing interest.

buzz.yahoo.com: This site will show you the most popular search terms currently being entered. This is also a good place to build your list of more possible niche ideas.

pulse.ebay.com: This site will show you the most popular current product categories on Ebay. You can click on the categories shown and see sub-categories that will give you even more niche ideas. Ebay also provides a monthly report of their hot products at pages.ebay.com/sellercentral/hotitems.pdf

Finding the good niches -

Now that you’ve compiled a list of niche ideas, it’s time to see which ones are worth pursuing. You can download a free tool from good keywords.com to see what the market looks like for these different niche ideas. This tool will take your product idea and show you the most common related terms people are searching for. It also shows how many searches were done for that term in the last month. What this does for you is to give you a very good indication of how big of a market exists in this niche. As a side benefit, you’ll also see lots of closely related terms you can use for SEO on your website to get that much needed traffic.

The trick here is to find keywords that are closely related to your potential niche product and have a fair number of searches every month, but they don’t have a lot of competition. This is easy to do – just go to Google or your favorite search engine and search for each of your potential niche key phrases. This will tell you how many web pages are competing for that particular term. You’ll want to narrow your niche key phrase list down to the ones that have a fair number of searches as shown in the good keywords tool, but don’t have a lot of competition as indicated by the search engines.

When you are able to isolate the niches that have a good quantity of searches, low competition and they’re showing a trend of growth, you’ve found a very likely winner!

It’s a tedious process, but it pays off. Let’s say that you investigate an idea and it looks good. You put up a website, do a little promotion to generate traffic. That niche product might only make a profit of $1,000 a month, which may not seem like much. But consider this – you only need to do the research one time and then you’ll be making your profit month after month. There’s nothing to stop you from building upon 20 niche ideas. And even if they only make $1,000 each per month, that works out to $240,000 a year. Not too shabby!