How to Start an Online Business


Note: The rest of this guide will provide an overview of how to start an affiliate marketing business. So if you like to learn through reading, then please continue with this guide, below. However, if you prefer to learn through videos, then sign up for the free Affiliate Bootcamp from our friends at Wealthy Affiliate. That video training is truly the best affiliate marketing training you can get.


Step 1: Choose Your Niche

It’s time to choose your niche market. You may already have a niche in mind, but even if you do it would be a good idea to research it thoroughly. Research will help you ensure it’s a profitable niche.

There are many different types of niches, and the methodology for niche research can be significantly different based on the type of niche you choose.

Here are the different types of niche markets.

Desperate Niches – These niches are for customers who are desperately trying to solve a problem of some sort.

Passionate Niches – These niches are for customers who are involved in a hobby or sport or art (etc) for which they are very passionate.

Desperate niches are usually the most profitable, but they are also typically very competitive. They will require a bit more work because you’ll need to prove yourself to be an authority by delivering killer content that they can’t find anywhere else.

Passionate niches are also typically very profitable, but as with desperate niches, they are extremely competitive. The great thing about passionate niche markets is that half your market research has been done for you because you already know what your target audience is most interested in and is willing to pay for.


Pro Tip: If you are passionate about a certain niche, yourself, then this niche is a very good candidate for your affiliate marketing business. There are two reasons for this. First, you already know about the niche, so you won’t come across as a dilettante/poseur/newbie when you present yourself as an authority. Second, it’s fun to participate in a niche that you actually enjoy, yourself.


The next factor to consider: Is the niche “evergreen”? You want something that will always be around. For example, consider the Weight Loss niche. There will always be a demand for weight loss products. Don’t pick a faddish niche (like fidget spinners) that will die out in a year or two. You want all your effort to go into a niche that will still be around in five or ten years.

You can further divide niches into:

Information Niches – Information niches are those that involve digital products rather than physical products. An example of such a niche would be the “how to make money online” niche.

Physical Product Niches – Physical product niches are those that involve the buying and selling of actual, physical goods.

An important distinction, though, between digital products and physical products is this: affiliate marketers tend to make a MUCH larger commission promoting digital products than they do when promoting physical products. This is because digital products have virtually no overhead, and are available in unlimited supply.

Yes, digital products cost money/effort/time up front, but once they’re complete, and published, they have a VERY high profit margin.

When a vendor sells a copy of a digital product (an ebook for example) for, say, $40, that vendor just made a profit of $40. The vendor has no warehouse fees. There are no transportation/delivery fees. The product will never expire. And when the vendor sells one copy, another is instantly available; stocks do not have to be replenished. For these reasons, digital products have a very high profit margin; this means that the vendor can offer a 50% commission to affiliates and still make a lot of money. So when that $40 ebook sells, the affiliate and the vendor each make $20, and both are happy.

Physical products usually have much smaller profit margins. Online retailers have – on average – a 5% or 6% profit margin for physical products. So, they can’t offer affiliates more than that, or they would lose money. For example, the Amazon Associates Program offers 2% to 5% commission on most physical products (with a few exceptions).

So, keep that in mind when picking between an information niche and a physical product niche.


Pro Tip: Not sure which niche to choose? Check out the free video training at Affiliate Bootcamp; their training will show you exactly how to choose a niche.


In the next section, I’ll show you how to choose an affiliate network. Click the “NEXT” button below to continue.

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