What is niche site? – Niche site is a site dedicated to one topic that has around 10000 search requests monthly. Domain name for website is chosen using exact keywords without hyphen. For example if you want to create a site about “Glass table designs” you would check google keyword tool for monthly search requests (results with 50,000 to 10,000 are good), competition (middle scale) and average CPC (cost per click. 1-2 $ is good enough). Then search for that keyword and check for competition on google. If on first page you get very few niche sites two or less then it is good. Then check if domain name preferable Glasstabledesigns.com is available and create content for your niche site.
There are 2 type of business ideas around niche sites.
First method: create hundreds niche sites
Create many niche sites periodically, generally 50-100 websites per month and grow them to 20-50$ per month income level. Reaching to 20$ level is normally 3-4 month. Then sell website or keep and continue earning. This type of sites has about 5 page content and not updated. If you have built say 1000 niche sites earning 20$ per month then you will have 20,000$ per month . To reach this point will take you 15 month on average. Also selling several good performing sites for 1,500-2000$ will bring you additional 5,000-10,000$ per month. An example for this business can be adsenseflippers.com, view October income report. Also check monthly reports by Spancer from nichepursuits.com may 2011 report. Spancer also built some software for keyword research.
Update: this method is no longer valid because google considers more than 100 small sites are not good for visitors and can cause to an invalid activity and results in adsense account banning.
Update 2 (17.10.2012): because this method provides small sites some with low quality google keeps updating their algorithm to punish them. Panda, penguin and Exact match domain (EMD) updates are mostly hitting on this type of niche sites. Some see 69% decrease in traffic and income after google algorithm updates, which will continue and evolve as publishers adapt to them.
Second method: continue building your niche site periodically
By adding relevant content to site monthly or weekly powering your niche topic will bring you additional traffic and grow your adsense income from 20$ per month to 2,000$ and more. To earn this amount it requires 150-300 articles. Articles should be at least 2000 words and relevant your niche. Also sell some affiliate products to your niche. Market content with newsletter subscription, blog content, webinars. Traffic to this type of niche site will grow steady because of additional content. Site will get more not exact targeted keyword traffic as well. Also you can get buyout offer in range of 25,000 or more after a year. An example for this niche site business can be smartpassiveincome.com, view October earnings report of their sites. Also read how one site built and sold for 200.000$.
I prefer second method because it requires less time and effort to grow 10 niche sites than building and managing 1000. And from security of your income second method is more secure than first because it offers more content to readers and keeps site focused and growing. Third thing I like about second business model it earns lot more from affiliate sales, 6,000$ from adsense ads compared to 30,000$ from affiliate sales in October 2011. Also second model will get you more search engine traffic. If you rank #1 on google for your keyword then you get 40% click through, if you have more content then you can get as much or more search engine traffic from other related keywords found on your niche site.
I really like both sites that they share their tactics and experience on how they build niche sites, grow traffic, increase click through rate, ad placements and other tips to increase their income. Niche site building can be considered as lifetime business that can support you and your family leaving you plenty of time enjoy living and earning money without having day job.
More resources that I find useful to get sense of income potential of niche website business: napincome august 2011 income report. I will keep adding to this list as I come across to new income reports. If you want to share your income report from niche site then leave a comment to this post.
In most cases niche websites make %90 income from affiliate sales, and 10% from adsense. So far I am earning from adsense but will experiment with affiliates soon.Related terms: niche topic ideas, website business ideas, niche website earnings