Today, we look at what types of niche internet businesses to potentially consider setting up for the coming year. Hopefully, over 2008 you’ve managed to set-up a handful of quality niche sites and are starting to see good returns from them. Certainly, over the past 18 months I’ve handed you some gems that should now be coming home to roost – the debt help and credit repair one (first highlighted in 2007) is beginning to gather pace, as is the foreclosures niche to name but a couple.

It’s certainly been an eventful 2008. The economic disaster that had been looming for years, threatening to cut short the credit fuelled boom in many global economies finally did – and did so pretty convincingly. Some huge Fortune 500 companies (and their UK equivalents) that many thought to be unsinkable went into liquidation. And that process is still going on, as market forces put fundamentally weak businesses with flawed business models or over-geared balance sheets to the sword. Who can forget the sad image of a cringing Dick Fuld (CEO of Lehman Brothers) in front of a panel of US Congress, trying desperately to explain how his mighty financial empire, which reported a record year only some months ago, could now be in the position of going bust.

And it doesn’t stop at just the banks. Throw a dart at the stock pages of the Financial Times and there’s a probability that you’ll strike a company that’s struggling to survive. The huge auto industry, once the very backbone of the U.S. economy has taken a seriously bloody nose – the big 3 have experienced such a downturn that they simply cannot survive (at least not without a huge blank check courtesy of the U.S. taxpayer).

So, aside from maintaining and growing your existing niche businesses, will you still be able to set up thriving sites and blogs in 2009 and enjoy the same level of profits? Surprisingly, the answer is actually “yes”. Whatever the economy is doing, some businesses and some industries always prosper. There is often a “transfer of wealth” during times of economic uncertainty, which means that there is always an opportunity to set-up niche online businesses that have outstanding potentials for revenues. But, make no mistake over the next 2 years it will become more crucial than ever before to identify and penetrate only the strongest niches with the biggest financial muscle. It will be more important than ever to follow the correct advice, and steer clear of the insidious “1000 niches in a box” type junk that’s floating around. And, now more than ever it has become crucial to select only the pedigree niches to set-up shop in, and back them all the way. Luckily, that’s what I’m here for…

How To Pick Your Online Niches In 2009? Time To Get Defensive…

In 2009, our online-niche-business set-up strategy should be to get into defensive industries that are more resilient to economic downturns. Niches for which online business is on the grow, where advertising spends (be that via pay per lead and Adsense or pay per sale) continue to be strong.

Often, these are niches where the underlying products/services are a “need” rather than a “luxury”. Because, this is what people look for when times are tough. This is why (in the UK), luxury supermarkets like Marks & Spencer and Waitrose have experienced downturns while the budget supermarkets like Aldi have actually increased their market share and profits. And, this is also why the car industry has all but collapsed – the sudden unavailability of cheap loans coupled with people scaling back on luxuries (of which a new car is certainly one) is responsible for the deep plight of this industry.

That’s the bad news – now here’s the good news. The internet as an economy within it’s own right is STILL growing. Businesses from far and wide, across countless niches are continuing to report that a greater percentage of their sales are being generated online. The number of global online browsers and shoppers also continues it’s march north. So, now is still a very good time to set-up new online blogs and websites in the RIGHT niches. In fact, get in the correct niches, and get the delivery right and I can all but guarantee you won’t even know there’s a slowdown. Amazing things are happening online.

If you’d like to know about a new niche that ticks all the boxes then check out these niches below which should perform well in an up, down or sideways economy:

Debt Help & Credit Repair

Health Insurance

Internet Business & Marketing

Diet & Weight Loss

Blogging

Today, we’ll take a very stark look at how your choice of niche can have a profound effect on what type of returns you can achieve from your niche site portfolio. If you’re a seasoned internet business entrepreneur, perhaps you know these niche picking truths…but if you’re a newbie who’s mind is continually flip-flopping on whether to set-up in this niche, or that…then could well be an eye opener.

Because, 95% of newbies venturing into the world of online business tragically choose poor, low potential niches. The fact is, the industry you choose to enter is one of the most important decisions you’ll ever make.

Despite what else you may hear, the amount of time and effort involved with marketing a rubbish site in a penniless niche is equal to the time you’ll spend on a good one. The results however would of course be remarkably different, so it’s crucial to pick wisely. You only reap what you sow, as the old saying goes.

So, how can you make sure you only choose niches that are bursting with opportunity and potent financial rewards for website owners? Start by checking the following are in place:

1. What’s The Financial Power Of The Niche?

Ultimately, the amount of money swirling about withinin any industry determines an awful lot. The financial muscle impacts how much the companies and advertisers spend on things like adsense & pay per lead. This trickles down at every level, and a blog or site in a ferociously wealthy niche will fare MUCH better than that of a mediocre one.

Take the health insurance industry itself. This is an industry that has about $2,873 billion of trade per year. That should TELL you something about what the potential is for everyone involved with this market – that, if you get it right, you can take a little piece of that pie. Compare it to some of the other niches, and it’s a GIANT by comparison. Ultimately, to get paid the big bucks from your blog/site you need to be in the big niches.

Always do your research – read some reports – talk to insiders or people of authority within any niche you’re planning to penetrate. Make sure the money’s really there, or it’s just not worth your while to get involved. Then, once you make an informed decision back yourself and go all out to make it work.

2. Is The Industry Growing, Shrinking Or Stable? Is There A Trend Change To Take Advantage Of Or Be Wary Of?

A while back, I wrote in my newsletter about the importance of getting into a growing, or at least stable niche if you’re building for the long term (which everyone should be). Take online travel as an example – the emergence of the internet has had a seismic effect on the travel bookings and research industry…with millions of people transferring the research process and booking of their holiday and travels from offline to online. This is why a number of online travel agents have grown so powerfully, and wiped the floor with the more traditional high-street travel agents (many of whom have gone bust, or moved online to survive).

Online travel is a living, breathing example of an industry that has boomed in a big way from a trend change.

3. “It’s The Economy Stupid” – Understanding The Local & Global Economy Before Setting Up Shop

If there’s one thing my financial background has taught me, it’s that you just can’t ignore market forces. So, anytime you’re choosing your next (or first) niche site to open, keep your finger on the pulse as to what’s going on out there.

In a boom, you can practically open any site and (assuming you’re able to draw traffic) it will probably do fine. Ask someone who runs any type of luxury site in today’s choppy economy, and they’ll tell you that sales are down in a big way. People are more reluctant to spend on the frivolous items that in a better climate, they would have purchased without a second thought.

Not all businesses struggle in a downturn – in fact, I read a report some days ago on how the infamous “one pound shops” are doing a roaring trade in the streets of London since the economic downturn. As are the pawnbrokers, due to the lack of affordable credit. And the budget supermarkets. Some places do well, or are unaffected by downturns – typically, these niche tend to be in essential industries where the product or service is a need rather than a want. This brings me back to the health insurance niche – people need health coverage in bad times as much as good times, which is why this niche will not be affected by the savage global downturn that has already crushed entire market sectors beneath it’s foot.

Usually, a little common sense is all it takes to make sure you pick a niche that will not vent spleen everytime the economy slows down, and spit you out in the process. This is not the first global slowdown, it wont be the last – so use it as a way of setting up a niche that’s good for all seasons. After all, your website portfolio should be as balanced and resilient as your stock portfolio – there should be a good mix of defensive and aggressive blogs/sites that will keep your income growing no matter what the economy is up to.

4. How Many Buyers Are In The Niche? What’s The Average Price Of The Product? Is It Residual?

Different people will tell you different things about whether the number of people in a niche matter. From experience, I can tell you that it does. Having a blog in a niche that is crawling with millions of cash rich buyers is far better than being in a niche with a few thousands where people don’t have the resources or mindset to spend. That should be from the textbook of 101 frikin obvious niche marketing strategies, yet some gurus keep bleating on that the number of people in a niche don’t matter. Sorry, it does – and if they owned a site for one of the Halloween costume niche PLRs (or whatever) they’re trying to peddle, they’d find that out pretty quickly.

5. How Will YOU Get Paid? Strength Of Affiliate Sale Commissions, Pay Per Lead, Adsense And So On

If you want to get a little hint at how strong a niche is take a look at the sort of payments that leading companies offer their affiliates. Again, this ties in directly with many things we’ve seen above like the financial muscle of the niche, the price of the product, the number of buyers and competing firms. Rich niches have money to pay handsomely for their leads. Poor niches don’t. Despite this fact, I see more newbies choosing to enter useless, impotent niches instead of the true paymaster industries. It really astounds me. Because, why would anyone want to settle for a niche with a few thousand prospects where you can only earn a pittance, when for the same effort and investment they could get involved with a niche crawling with millions of cash rich buyers and where the returns are countless multiples bigger.

See, when trade is measured in terms of billions of dollars, that acts as the engine that drives online companies to pay you (the blog/site owner) bigger and better affiliate commissions, and pay per leads, and Adsense. Because the managers of these companies know exactly what the worth is for each lead that they get through your blog /site – and a lead from a health insurance blog to a company selling health insurance is worth MUCH more than the lead a Halloween costumes company gets from a Halloween blog. The Halloween costume lead may get a $40 sale for the company. The health insurance company lead may result in a $5,000 per year revenue.

That’s exactly why the Halloween company can only offer a few cents per Adsense click. And why the health insurance firm is willing to pay upto $60 per lead, and bid upto twenty bucks on some Adsense keywords.

Yet, even as we speak countless of eager entrepreneurs will be downloading a box of 100 niche site type package, and excitedly setting up their “make your own chocolate” sites, and “peacock grooming” and “lice remedy” type sites…not knowing that, because of the very reasons above, they are doomed to failure. It’s really quite unfortunate.

But, you know much better. So, make sure you set up shop in only the very best online niches that will give you a real chance of getting good revenues.