How to Tell if a Niche is Too Crowded

Many people make the mistake of choosing a highly competitive niche and developing a business idea around it, only to find that the market segment is so inundated and crowded with competitors that it's virtually impossible for a new comer to make any money at all. Many new comers start off by choosing a niche that is far too broad and as a result far too crowded. If you're thinking of building a niche marketing website, a quick check using any online keyword research tool will tell you if this is the case.

Even if you get there first and discover a unique tight niche and create products and services to offer your customers, the existing internet marketers will notice you have discovered a profitable market segment, and you will soon find yourself having to compete with them. In no time at all when someone searches for a keyword similar to yours, they'll be amazed to find that there are so many other websites serving the same customers.

Before you start building a niche website, doing a little keyword research using an online keyword utility will return the number of web pages with a similar theme and which contain roughly the same content, this number being an indication of the competition you are facing. Bear in mind that even if the niche is narrow and tightly focused, it will start to become crowded even if only two or three new businesses start working on the same niche.

Unfortunately the plain truth is if you dominate a profitable niche market you will not be able to keep it a secret for long. No niche can be kept in absolute secrecy forever: there are too many smart people out there on the internet who all want to get their hands on a slice of the pie.

To keep your niche market profitable you need a constant stream of ready to buy customers, and one way to do this is to capitalize on search engine traffic. Use a good quality keyword research utility to uncover all the different words and phrases people use when searching for information on the internet. Next you create web pages which are optimized for these terms (known as keywords).

A point to bear in mind is some keyword research tools use the data from pay per click search engines to calculate the number of searches conducted for a given keyword, and this figure is not that realistic. Keyword research utilities such as WordTracker use data from the major metacrawlers like Dogpile to calculate very realistic keyword search statistics, and will give you the number of times any given keyword or phrase was searched for during the previous three months and a predicted count for the next 24 hours.

Each of these keyword research utilities maintains a very powerful database of raw data for your subsequent research. If the niche is starting to get too big, then the number of searches on your keywords will be in the thousands. Careful analysis will also reveal the number of websites in the niche, which will be a large number if your niche is crowded.

You can also use pay per click search engines to drive traffic to your website, but it's worth remembering that popular keywords are expensive. If the niche is profitable, your competitors will be prepared to pay hefty sums to buy those keywords. The only way you are going to get cheap pay per click traffic is by finding keywords which your competitors aren't using. Unfortunately these little known keywords won't be popular so you'll need to find a lot of them to get a reasonable amount of traffic to your niche site.

As your niche gets more and more crowded with new competitors these pay per click keywords will become progressively more expensive. There will be those new competitors who understand the value of keyword research and will discover the same keywords you are using. This will reduce the traffic to your website and so reduce the amount of money you can make.

A point will be reached when the niche becomes so competitive it is no longer profitable, and you will either have to abandon the niche or discover new methods of getting customers to your website.