When you refer to niche sites, are you refering to scraped niche sites like the Redsteel niche site that Matt was developing in his "How to Develop a Niche Site" thread?
I'd see that a well thought out niche site like the type he develops could generate anywhere from $10 (mainly low cost CTR traffic) to $500 (if you get affiliate sales for products) per month.
---
Then again, how do you define a niche site?
If it's themed to one topic, and you have a high ticket item, there's no reason why you can't make a couple of thousand dollars of sales every month.
In good times, you could be look at a couple of tens of thousand of dollars of sales.
During the World Cup soccer tournament, I know of guys who had soccer sites and racked up about $10,000 of profit during that period (affiliate marketing for CDs and football memorabilia).
If you had a Superbowl site with good content, and either a solid PPC or BH traffic strategy going, there shouldn't be any reason why you wouldn't be able to generate a couple of thousand in sales.
---
If you're looking for long tail niche sites, I'd see themes like ipod, weight loss, hair loss/growth, low back pain, diabetes as niche sites which can continue to generate steady monthly income.
In cases where you have your own product (such as an ebook), I know of online marketers who can generate $5,000 - $10,000 from a single site.
And once you have a system in place, it's merely a matter of replicating the system.
Once you have 2-3 solid niche websites in place, it gives most marketers financial freedom to do projects they enjoy.
---
IMO more important than doing keyword and niche research, would be to talk to people IRL and get their feedback on the problems you plan to address.
Is the need severe?
Would they be willing to pay
crazy prices to get their problems solved?
If you have a
large, rabid, hungry, price insentive market, I'd go for it.
----
A case in point: In many cities outside the US where there are casinos, you frequently see fleets of taxis waiting outside the casinos. They'd typically charge up to 10 times the regular metered fare. Which is ok for the big winners because they have lotsa cash to throw around.
This also means that if you're a taxi driver you might earn $10k or more a month.
But obviously the taxi syndicates might be rolling in a million bucks or more of net profit a month...
Bottomline: Research is the area you need to spend the most time on, and real world data+online data will always trump just looking at keywords alone.
I've been doing a lot of research on niche websites lately, and I have a few ideas I've come up with that I'm about to try.
But, in all honesty, how profitable can niche sites really be? I figure I throw down $20 on a domain + hosting, get an adsense account, and then hope for some traffic. If it doesn't work, no big deal... I lost like $20. If it does work, $3 or $4 a day profit... which isn't much, but it's still a profit.
To those of you with niche site experience... I want to hear your stories. Whether success or failure. I'm curious as to how niche sites have played out for you, and are they really worth the hype they've been causing?
Thanks in advance.