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That statement is not entirely true. All niches are profitable. However, some very popular niches are so competitive that it becomes hugely time consuming and expensive to make a mark as an internet marketer.

A great example is the recent introduction of Bing, the new Microsoft developed search engine. This is a competitor against Google, Yahoo and others. For the average business person, developing another search engine that can take on Google head-on is totally out of the question. It’s just too expensive to bring in a competing product against a huge brand such as Google.

It takes another huge brand to tackle a Google. Besides Microsoft one could imagine that Apple might be able to compete as well, not that they would necessarily want to do that. Their main market is cool gadgets.

There are therefore a fair number of niche markets that would be too expensive for the average internet marketer to compete in. But how do you find out which are the ones you need to avoid?

This is where further market research will be most useful. Before deciding on your niche have a look at what and who your competition is. First step is to try a Google, or Bing of course, search. See how many websites come up on your search.

You will be able to determine this by checking the final results on the right hand side of the Google page once your search results have come up. These are the number of sites that have your search term on a page or pages.

As an example search for health and your results will be around 1.060 million sites. Now search for the keywords natural hayfever remedies and your results are just close on 300 000 sites. If you are going for a niche in the health environment you would want to select something like hayfever remedies as your specific area.

As a yard stick be aware that if your search comes up with less than one million results then you have a good chance of making a go of this particular niche topic.

If you want to start a successful Internet business and not just a vanity site, you’ll need to identify a profitable business niche. Finding a niche lets you can tap into buyers who have an identifiable need that you can solve for them.

This involves doing more than just guessing! It involves more than just saying, “I think it would be fun to sell…” and then putting time and money into creating a business that either has no market or that gives you no possibility of breaking into a field glutted with well-established competitors.

Your next step is to look at the first few pages of results and see whether the list is packed with big company names or if there are names of blogs and general low-key information sites. Going back to the above health search let’s see what we get.

The search result for health brings up such big players as Yahoo, BBC, WHO, CNN, Men’s Health, a fair sized portal for a magazine called Health and WebMD a huge site on general health issues.

Let’s have a look at natural hayfever remedies and the first search results on the list are small blogs/sites. There’s also an article on Times Online, an article on an article directory and a five year old article on the Guardian newspaper site amongst others. In other words, not too much competition here.

Once you have determined your main competitors in the niche you would like to operate in you will also need to see their traffic results. For this you may use Alexa.com, Compete.com or Quantcast.com.

These results will provide you with information on traffic patterns as well as the average number of visitors. Besides providing an idea on general popularity these statistics would allow you to see the curve in the search traffic for hayfever remedies without you needing to know that hayfever is a health problem people suffer from in the summer months.

Hayfever remedies might not be such a great niche after all if there is only interest in remedies for six months in a year. Any product you might wish to sell would have a down time of six months. You would have to sell many products to make up for a short trading year. That’s similar to the cycle ice cream sellers face!

It’s good to know that there are tools readily available that make it easier to find a niche that will be profitable for you as an internet marketer. You might find some niches are just not the right option for you before you spend time, effort and money on developing a market.