Are Niche Sites Still Profitable?
Given that we constantly “preach” about the benefits of building and owning niche websites, one question that we get all the time is whether our niche site is still profitable.
The simple answer is yes, niche websites are still profitable, especially when you take a long-term view.
They’re not something that should be considered an extremely short-term investment, as it typically takes 12 to 18 months to reach the profitability tipping point.
Once you’ve reached this point, you will often see profits and revenues start to accelerate along with increased traffic growth.
Additionally, once you reach this profitability point there are a huge number of business buyers that buy these types of sites often for a 30 to 40 X multiple of your monthly net income.
This means if you create a profitable niche site that not only will you have consistent and passive monthly income, but you have the potential to sell it for a large one-time payday.
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Niche Sites Vs Micro-Niche Sites
Just to clarify a little, what we are referring to in this article are niche websites.
These types of sites have content focused around a specific niche or interest.
There’s no real upper limit to the number of pages or posts that your site may have, unlike a strategy that was popular a few years ago focused on micro niche sites.
These types of sites typically are not profitable, because they only contain a few pages or posts and then are left to sit and generate traffic.
This is not a strategy that we recommend.
If you’re considering building a niche site, you should be consistently publishing content at least for the first six months to one year and be regularly updating content after that.
What Makes a Niche Site Profitable?
Whether or not you can build a profitable niche site comes down to two simple factors.
The first factor that will determine whether or not your net site has the ability to be profitable is whether or not there are enough people interested in the topic you plan to create the site about.
At a minimum, during our niche research phase, we like to find a minimum of at least three niche sites that already exist in that niche and have a minimum of 30,000 monthly unique visits from organic search.
While these numbers are not always going to be exact, we like to use UberSuggest to give us an idea of what our competitors’ traffic might be.
When we combine this with the other factors we use in the niche research process (like how those sites are monetized), we can very quickly validate whether or not we can build a profitable site in any given niche.
Once we are sure that enough people are interested in the niche, it’s up to us to create content and generate enough traffic to make the site profitable.
We need to get enough people to the site to be able to monetize using one of the methods we’ll talk about below.
While I can’t give you an exact traffic number for a site to be profitable, it varies wildly, I will say that it will typically take about 12 to 15 months for most niche sites to reach the breakeven point.
The breakeven point is when the amount of money being spent on content creation, advertising, hosting, etc. is even with the amount of money being generated by the site.
Typically, we see what’s referred to as “hockey stick” growth and at this 12 to 15-month mark, we begin to see an exponential increase in traffic.
If we’re able to reach this breakeven point, we typically will accelerate past that within the next few months and reach overall profitability within 18-24 months.
Keep in mind, that these are rough guidelines and will vary greatly based on your niche and content-creation skills
How Niche Sites Can Make Money
Now you have a bit of an understanding of what’s needed to make a site profitable, you may be wondering how can I turn that interest and traffic into money.
We are going to cover three different ways below.
One of the most popular and most passive ways to monetize your niche website is through the use of ads.
While it’s pretty safe to say that no one loves seeing as on a website, most people are used to them by now and are unbothered by them.
They’re a great way to generate passive income on your site and depending on the size of your site and your niche can help you generate anywhere from $5 to $50+ for every 1000 people that visit your site.
You can easily see how once you start to generate traffic, this becomes a very potent potential source of revenue.
The second popular way to start to generate revenue from a niche site is through the use of affiliate links.
If you’re not familiar with affiliate links, they are essentially a way for you to get paid for simply driving traffic to another website.
If someone clicks on your link and then goes to that website and buys a product or becomes a member of their email list, you get paid a small commission, because that company does not have to spend money on advertising.
Most niches have a variety of different affiliate programs, the most commonly known and used is Amazon Associates.
If you do a little bit of research in your niche using something like ClickBank, you’re likely to find a variety of different websites that offer this opportunity for you.
Keep in mind that if you choose to use affiliate links on your site, you’ll need to include affiliate disclosure prominently on those pages.
This is very easy to do, but it’s something you do need to keep in mind.
Another common way to turn your traffic into a bit of revenue is by selling products.
These products can come in one of three different forms.
Digital Products: things like e-books that are sold and delivered online.Physical products: things that are physically shipped to people and require you to keep inventory.Hybrid products: things like print-on-demand T-shirts that are shipped but don’t require you have inventory on hand.
Essentially, if you can think of an idea for a product it can be sold via your website.
While this method of creating revenue can be extremely profitable, it’s also the most time-consuming from a customer service perspective and in the case of physical products, can also be capital-intensive because you need to keep inventory on hand.
That’s a Wrap
As you can see, when it comes to niche sites being profitable it’s a case of “if you build it, they will come”.
At the end of the day, once you’ve been able to consistently generate traffic, it’s simply a matter of sitting down to understand your options in choosing one or more to implement on your site.
If you’re curious about some of the behind-the-scenes numbers you may want to check out our ongoing series on the “1K niche properties project.”