How to Find a Profitable Niche in Affiliate Marketing

Quite often, you might hear people talk about affiliate marketing and think that it’s easy, passive income.

“I can sit there all day on my couch while I watch the affiliate revenue pour in!”

It’s every marketer’s dream:

Make money while you sleep like Bill Gates.

Who wouldn’t want to do that?

Many marketers who get into affiliate marketing are hoping to make easy income without actually owning and operating the business that sells the product.

It seems incredible, right? You can just mention a few products and provide affiliate links.

Next, you simply use your current inbound tactics to drive more visitors and sales.

But the truth is that it’s not easy.

Most affiliate programs don’t produce enough profit for a marketer to sit back and relax.

And most CMOs feel that affiliate marketing is one of their least-mastered skills.

On top of that, fewer than 10% of affiliates drive 90% of total conversions and sales.

This means that there are only a select few in the affiliate industry who produce the majority of the profits.

So making a living on affiliate marketing is tough.

Thankfully, there are still niche-affiliate industries out there that you can tap into for unparalleled success.

I’ve found a few of them myself. And I’m going to teach you how to do the same.

Here’s a little bit about what affiliate marketing is and how you can find a profitable niche.

What is affiliate marketing?

One of my favorite definitions of affiliate marketing is by Pat Flynn. Here’s how he describes it:

“Affiliate marketing is the process of earning a commission by promoting other people’s (or companies’) products. You find a product you like, promote it to others, and earn a piece of the profit for each sale that you make.”

Affiliate marketing usually focuses on multiple parts: The advertiser, publisher, and consumer.

But when we break it down into simpler terms, it usually just focuses on the product’s creator or seller and the affiliate marketer.

Generally, you can think of affiliate marketing as the idea of a company selling products or services and then seeking out others to help sell those products or services in exchange for profit-sharing.

Here’s an example:

A company puts their products on Amazon. Amazon wants to sell more of those products. So they ask people (like you and me) to advertise them on our sites and drive sales.

In exchange for advertising those products, you get a certain amount of the sale. You take a commission.

That’s still kind of confusing.

So let’s break it down even further into a few sections that will help you better understand how affiliate marketing works.

First, you have the merchant.

The merchant can take multiple different forms. The merchant could be the product creator, seller, or brand.

Most consider it to be the company that produced the product.

For example, take Apple. We all know them, right?

They produce and sell electronic goods.

You can file nearly any company under the merchant category: small businesses, SaaS companies, and more.

They simply need to be the creator and seller of their own product.

Next, you have the affiliate.

You can also refer to the affiliate as the publisher or advertiser.

And it doesn’t have to be a huge company either. It can be anyone!

Affiliate marketing businesses can produce revenue all over the board depending on the products sold and how much traffic you can drive.

The affiliate will promote their selected industry’s products in an attempt to convert and sell to as many customers as they can.

This way, they can earn tons of affiliate revenue from the profit-sharing method of affiliate marketing.

You can easily achieve this if you have a popular blog that drives traffic.

For example, check out Primer Magazine and how they use affiliate marketing as a tool that goes hand-in-hand with their blog:

They use style guides and fashion blog posts to sell outfits and affiliate products for sites like Amazon and more.

Each of those pieces has an affiliate link.

They even take it one step further and add a few alternatives in case you want a T-shirt that’s a little bit cheaper than the one pictured.

And beyond just being utilized on blogs, affiliate marketing could be the base for your entire business.

There are even sites solely dedicated to affiliate marketing and deals:

Lastly, you have the customer.

The customer is who drives affiliate marketing. They are the only thing that keeps any business going!

Without consumers and traffic to drive sales, you aren’t getting any commissions.

And no commissions means no business.

As an affiliate, you can market the products you’re selling to customers in any way possible.

And you don’t necessarily need to disclose this type of relationship to consumers, either.

Simply put: the customer is the lifeblood of your business, even in affiliate marketing.

That said, if being transparent helps you, then be transparent and use a disclaimer to let visitors know that you are using affiliate links.

But you don’t have to.

And now, since you know how affiliate marketing works, let’s dive right into finding a profitable niche!

Step 1. Research and brainstorm

Finding a niche can be one of the most dreaded aspects of business research for most marketers.

Everybody preaches, “find your niche,” but what does that actually mean? How do you really find a niche? What even is a niche?

Let’s ask Google:

A niche is a highly-specialized market. For example, a niche product could be something like:

An organic bath soap.

Normal bath soap is mass-produced and bought in large quantities. It’s almost overlooked as a real purchase and typically falls under a habit purchase.

But, organic bath soap is a smaller market. Companies in this soap segment aren’t as large, and there is a smaller group of people buying it.

This means it’s a niche easier to compete in than going against a soap titan like Dove.

To get started brainstorming, head over to audience-insight website Quantcast.

Click on the explore button in the top right corner:

Next, click the “Top 100” button:

This will give you a list of the top 100 sites on the Internet at a given time.

The goal here is not to copy these sites and emulate their industry.

That would be futile, as these sites are the biggest on the Internet right now!

The point is to scroll to the second or third page and start to notice niches and trends in the companies you see.

For example, this is what I noticed on the 3rd page:

Now, I quickly noticed that travel was pretty popular.

But, that’s way too broad for an affiliate-marketing niche, right?

Of course.

So, we’re going to take that broad category and head over to Quora.

Quora is a site where people can post questions about nearly any topic and get detailed community-based responses.

I even use it in my marketing strategy!

But, I digress.

Once you arrive on Quora, simply type that broad term into the search bar:

Next, you’ll get a list of the top questions that show up in the Quora search results.

The key here is to take the broad category that you’ve researched and use it to develop smaller niches within that industry or sector.

For example, travel hacks was a common theme on the Quora search!

Now we’ve refined from basic travel to travel hacks.

If you don’t find anything good, go back to Quantcast and try a new category! Or you could check out this list of 1,452 niches.

Step 2. Check it’s monetization on ClickBank

The next step in the process is to take that niche topic, like travel hacks, and test its worth.

There’s no point in getting into affiliate marketing if you can’t monetize it, and you can’t drive traffic and sales.

You’d just be spinning your wheels.

While there are other options other than affiliate retailer ClickBank, it’s a good site to start with because of how many users are on the platform.

To get started checking out your new niche industry, click on the affiliate marketplace button in the top menu:

First, you can begin by searching for your category on the search bar at the top:

This will help you narrow down your niche.

But, be sure to look at the left-hand side menu, as they already have curated topic lists:

Next, select your category or search for your niche in the search bar and take a look at the results:

Now, this page might be a little bit confusing to someone who has never used ClickBank before.

So let’s break it down a bit.

The left-hand side is where you can filter the search results, and the right-hand side is all the product results for any given topic.

Essentially, each result under this search is giving me products that I could sell for my niche!

The first thing I recommend doing is sorting your results by “Gravity:”

This metric essentially highlights how well the affiliate product sells for a given niche.

Now, take a look at the search results and investigate to see if any products look like they’ll be easy to sell in your researched niche.

I typed in our sample niche of travel hacks, and noticed the second result, immediately:

This product has a pretty high Gravity score and a great average income per sale, too!

This is a useful way to scout out your potential affiliate-marketing niches to see if there are products and services that people will actually pay money for.

If you aren’t finding anything good, simply repeat the process.

The goal here is to find natural products that wouldn’t be hard to sell.

For example, the travel hack package would be easy to sell on a popular blog about travel hacks.

But, selling something more general like luggage might not be (unless it’s really innovative).

Step 3. Double check your niche on AdWords

Another crucial step that I make sure to take when finding an affiliate niche is double-checking the typical cost per click of keywords in that niche.

Since your focus will be driving traffic and sales, you need to know what the competition is like.

This means figuring out how much clicks cost, who is bidding, and how you can compete.

To get started, head to Google AdWords’ Keyword Planner.

Here, you want to click on the first option to search for keywords based on phrase or category:

Next, type in your keywords for your niche. Focus on related words that will bring up diverse results.

For example, with our example of niche travel hacks, I typed in the following keywords:

• Travel
• Travel deals
• Travel hacks

Then, hit “Get ideas!”

The key here is to look at average monthly searches, competition, and the suggested bids:

The monthly searches will show you how much traffic these niche keywords get.

The competition will highlight how difficult it will be to rank for them.

For example, travel and travel deals are going to be tough to rank for with higher search amounts and high competition.

The suggested bid will help you understand if a keyword niche is worth spending time on.

Next, click on the “Suggested bid” column to sort your results by bid amount:

We do this to see which niche searches have marketers willing to pay high amounts for a single click.

This usually indicates that there are high-value affiliate products to sell for these searches if someone is willing to pay big money for a single click.

Next, inspect the results:

Here, I noticed that travel credit cards and travel packages were huge.

People are willing to spend over $20 per click (without a guaranteed conversion) for that niche.

This shows me that it’s popular and has the ability to produce significant returns.

Think about it:

If marketers were only generating $10 per sale on the credit card deals, they wouldn’t be bidding over $20!

And that means they are bidding $20 because they know that there is big money involved in closing a sale.

Next, I recommend going back to ClickBank and trying to search again to narrow your search further.

For example, travel credit cards:

Once you’ve got this down, you’ve found yourself a profitable niche.

Step 4. Start selling products

Now that you’ve found a profitable affiliate-marketing niche, it’s time to start selling.

The success of an affiliate business rests on its ability to sell products.

If you don’t sell, you don’t make money!

A few of my favorite affiliate programs, as you may have noticed, are Amazon and ClickBank.

Amazon is great for ecommerce-based businesses. If you run a blog that focuses on fashion or consumer goods, Amazon is the place to be:

You can join for free and get started instantly! It’s one of the easiest ways to start your affiliate-marketing program.

You can also choose from millions of products to sell, meaning you aren’t going to be limited anytime soon.

Plus, the commissions are pretty solid, and Amazon is king when it comes to selling B2C goods:

The products are abundant, and the process is one of the easiest available.

If you don’t find anything on Amazon, I recommend trying ClickBank:

Since you’ve already run through the process of building an affiliate niche or finding your first niche, you can use their website to find products that you know will fit!

Simply sign up for your free account and start selling products through your blog or site.

Conclusion

The idea of a 4-Hour Work Week is great.

But it doesn’t just happen overnight. You don’t just wake up one day having made money in your sleep like Bill Gates.

To get to that passive income, you first have to be a little active.

You can do that by creating an affiliate-marketing strategy that will bring in additional money through affiliate links.

Using your already robust site traffic, you can send affiliates some extra business and cushion your pockets even more.

When done right, you can essentially close sales, and watch the money roll in while you sleep.

But the key phrase here is “when done right.”

Affiliate marketing is a pretty saturated industry, and many marketers don’t even think they are good at it.

What’s more is that less than 10% of affiliates drive more than 90% of the conversions.

This means making a profit-booming living off of affiliate marketing can be a little tricky.

Thankfully, you can find niches that will boost your revenue.

Start by researching and brainstorming topics for a niche.

Then, narrow down that list using Quora to find niche topics that are trending.

Check if you can monetize these trending topics on ClickBank.

Use further research on AdWords to find keywords in your new niche that are exploding with growth and high bids.

Lastly, start selling your products fast through sites like Amazon and ClickBank!

Find and develop your affiliate niche to find real success in affiliate marketing.

What strategies have you used to be a profitable niche in affiliate marketing?