If you spend time in Internet marketing communities online, you’ve probably heard of niche sites. If you haven’t, let me enlighten you.
Niche sites are websites that were created solely for the purpose of monetization. Some people also call them authority websites. Some people differentiate between niche sites and authority sites. None of that matters.
What does matter, is the business model. It really only has four simple steps:
- Choose a topic or niche (often based on keyword research).
- Create a website about that topic (and fill it with useful content).
- Drive traffic to the website (typically through search engine optimization).
- Monetize that traffic (typically through ads or affiliate links).
If you’re not familiar with the term, an affiliate link is just a personalized link to another website that can track how many leads or sales you drove so you can collect a commission. For example, if you clicked on this affiliate link and bought this rubber ducky I would get a small commission on that sale. (But you probably wouldn’t do that unless you were looking for a rubber ducky and I had done some research to write about the best one).
Now there are typically two schools of thought around niche websites.
- Niche sites are amazing (that’s where I fall).
- Niche sites are a scam (as in, it’s all a big lie).
I definitely fell into the second way of thinking for a long time. They seemed too good to be true. Making money can’t be that easy I thought. It’s too risky. Don’t they all get hit with Google penalties?
After successfully launching and growing many niche websites, I’ve learned my skepticism was unfounded. Instead, I think building niche sites was one of the best decisions I’ve made. Here’s why I think you should do it too.
(By the way, if you’re familiar with Wirecutter, it follows the same business model as niche sites. The only difference is that most niche sites focus on only one niche or topic while Wirecutter creates content with affiliate links about many topics).
1. Niche sites are a great investment
In fact, they’re the best investment I’ve ever made. Here’s an example:
For one site, I spent about two hours doing keyword research until I found a keyword that matched my criteria. I then spent about an hour creating a logo, buying the domain, and setting a simple WordPress website. Finally, I spent about $300 on content for the website.
Then I got busy with client work and starting a brewing company and forget about it for a while.
Three months later, the website earned its first $5/month. Another three months later it was up to $100/month. A year later, it was up to $500/month and I didn’t spend any time on the website during this time.
Three years later this website had already earned me $22,146.57. While I had spent another $500 on content during that time (and invested a few more hours in optimization), that’s still more than 20X my investment. But here’s the great part. That’s not theoretical money, that’s cash in hand. Think of it as a dividend-paying stock. As long as I hold on to the website, I get a check in the mail every month.
On top of that, if I decided to sell my “stock”, I could have earned another $20K+ right away. (Niches sites typically sell for 20x monthly earnings). I would have ended up with more 40X my investment when you include all the money I had already earned.
Those kinds of returns are hard to find without incurring a lot of risks.
And remember, this was only from one niche site. You can make as many as you want.
2. Niche sites are a savings plan
Saving accounts are an important safety net. If you need (or want) to spend a lot of cash quickly, your savings account is often the best way to do it. We all know savings are a better way to make purchases than going into debt, but not everyone is in a position to save. If you already have a lot of debt, it’s more profitable to pay that off than to save. And if you’re trying to get a business off the ground, you’ll likely be investing most of your extra cash into that.
But a niche site is a great way to hold money. Since they’re inexpensive to startup, niche sites don’t require ongoing financial contributions like savings accounts do. But if you’re ever in a position where you need a lot of cash all at once, you can sell your site for a lump sum.
3. Niche sites improve your cash flow
By the way, have you thought about how great it would be to get an extra $500/month? That’s because you’re improving your personal cash flow. That is, the amount of money you have available to pay for stuff every month. This is different from your net worth. You can be “house poor” and have a lot of wealth tied in your property with no way to pay the electricity. As long as you hold onto your niche site, you’ve got a nice ongoing source of supplemental cash flow.
4. Niche sites provide passive income
Cash flow from niche sites is typically known as passive income. That’s because, once you’ve made your original investment of time or money into the site, you don’t need to do anything to keep earning money. There are no products to manufacture, orders to ship, or services to provide. Organic search traffic comes in month after month and each link click makes you a little bit more money.
5. Niche sites are a great lifestyle business
Not surprisingly, all this passive income makes niches sites a great lifestyle business. It doesn’t matter where you are in the world or how you spend your time. Niche sites can follow you through life, providing a steady income. It’s up to you how much you want to scale it. Remember, in the example above, I only mentioned one website that I have been particularly lazy about.
6. Niche sites give you digital leverage
Aside from the financial value in niche sites, they can also provide value through their digital leverage. You can use your site to get in front of a targeted audience any time you want. You could choose to offer products, build backlinks to a new project you’re trying to get off the ground, sell sponsored posts, or even use it as a testing ground to experiment with new tactics and ideas.
7. Niche sites look great in a portfolio
Speaking of which, do you want to get hired as a marketer? Niche sites make for a great marketing portfolio. Few marketers actually know how to drive traffic and move the needle. It’s easy to demonstrate you have valuable skills and expertise required to make a business impact when you’ve built, grown, and monetized your own website.
8. Niches sites are a great way to learn
And finally, even if you’re not successful in making money with your niche site, you’ll still be successful. There’s really no better way to learn online marketing. You’ll have developed many valuable skills you can carry with you into the future, whether it’s for other projects, client work, or a job.
Interested in learning more about how to start your own niche sites? Leave me a comment below. If there’s enough interest, I’ll break down my step-by-step process in a future post.