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When you are selecting a niche – you should always be concerned both with potential profitability and with the difficulty of competing against established entrants to that niche. The ideal niche strikes a balance – enough of a profit potential to make investment worthwhile without the massive competition that floods some of the more popular niches. While this list is not intended to be a definitive pronouncement that the following niches are no longer possible for newcomers to compete in, it will take a far higher marketing budget to establish a foothold in these industries.
Auto Insurance / Loans
Some of the most successful internet marketers of the last decade got into this market when it was still relatively open, creating high quality landing pages that singed people up for various loan comparisons and mailing lists, and gave them an enormous amount of money per conversion. These financial instruments are ideally suited to internet marketing because they can be sold and traded entirely online, but the level of competition is fierce. It will be very difficult to rank for organic traffic in this niche (since the competition from large firms is astronomical) and paid traffic will be so expensive that it will erode the entire margin you could be making with an affiliate partnership with a lender/insurer.
Penny Stocks and Financial Instruments
The investing niche is profitable because people who purchase investment-related products do so with the expectation of future windfall, so they are willing to spend more money than they would in other niches. Of course, this also means that the niche is packed with competition, and many of the established players (like Motley Fool) are so large and so well-funded that they can block out potential competition from newcomers. There are a few niches in investment that are still wide open, like market specific stock tips or unconventional investments/speculation (e.g. BitCoin) but be wary of the FCC and any requirements that governmental regulators place on disclosure of advertisement revenue and sponsorship. For example, intentionally using false or misleading media reports to drive up the price of a stock (looking at you guys, penny stock sites) can land you in federal prison if the government suspects collusion.
If you are quick, and you are good at writing content, it is actually relatively easy to find a niche in the online education industry. You can create industry specific training sites, sell courses, or sign students up for test-prep software… but the margins are relatively slim. Except for a select few training courses that are typically employer financed, most college courses and online education facilities offer slim returns on their affiliate programs even though the marginal value of their customers is so high. This is mostly because third-party sites provide little in the way of secondary value to the sites of the actual educational providers themselves.
The one niche that is probably the single-most competitive industry on the face of the planet is dietary products. Everyone has their own “miracle” diet or products to support those diets, and the internet is absolutely full of affiliate programs and landing pages that sell everything from magic berries to workout videos. The biggest problem with this niche is the transitory nature of audiences. By the time you spend the money to produce a good landing page and to start generating traffic, your product is already on the wrong side of obsolescence. Not only this, but some dietary products can land you in actual legal hot-water, especially if you produce the products yourself and make unsubstantiated claims. With that being said, if you can catch the early adopters of a diet or a workout plan, you can potentially make millions. Just look at the success of P90X and some of its successors.