A few days ago Luis and I were discussing a few different alternatives about the direction that we wanted to give to the site for the upcoming weeks.

While I was writing the post about how to build 1000 niche sites, it became evident to me that there was a lot to be told on the subject. There’re a thousand blogs out there that cover pretty much the same aspects oven and over again (with a few notable exceptions).

Luis and I agreed that we have some hard gained experience on the subject, and feel that we can help others develop their own niche site building business.

So we decided to start a whole series of posts on the subject, and try to cover everything that you need to know to get started.

You can find a quick index to the entire guide here. Posts will be added as we write them.

Let’s begin.

Why niche sites ?

Niche site building has been for us a wonderful path to enter the Internet Marketing world.
Some of the good things it has to offer are:

• You can begin building the moment you decide to
• You can start just by spending a very little amount of money
• The return on investment (ROI) could be monumental
• To build just a few sites you don’t need to halt everything else that you are doing (quit your job, leave your clients, etc.)
• If you get good at it, you can not only grow, but also increase the rate at which you grow

Nevertheless, it has some drawbacks:

• Almost every single type of niche site, depends heavily on search engines traffic. And that my friends, makes the business extremely risky. What else would you expect with such a phenomenal ROI ?
• It is extremely easy to forget that it’s actually a business, and therefore you may fail to take some key decisions to its success
• There is a learning curve to it
• You will need some tools to do it, and the market is filled with useless tools. It takes a lot of time to discern which are good and which are bad.
• It’s addictive
• There is a “blind period” where you have to make a leap of faith and keep building, even when there are still no results
• Most people fail at it. Don’t get me wrong, there are thousands of successful Niche Site Builders out there, but there are a lot more people who didn’t make it

So do the drawbacks outweigh the positives ? Is it worthwhile ?

Well that depends, are you willing to accept a few failures, as a way to learn from your mistakes ? Are you willing to invest (not spend, it is not the same) some money even when there’s no cash coming in ?

If your answer is “Yes” to all that, then you should definitely go for it. Do things right and after a six month period (or less) you will be cashing a few hundred dollars checks every month.
Don’t treat it as a business and you will be cashing $100 checks every 4-5 months. It’s just the way it is.

Our experience with niche sites

I’m not going to provide details about the exact composition of our business, or give detailed income reports, basically because it is against the TOS of almost every ad network, affiliate program, CPA network, etc. Yeah, I know that is trendy and cool to do it, but I would rather stay on the safe side.
What I can tell you is that the first group of Niche sites that we built (about 25 sites), are producing enough money to invest on creating another 15-20 sites each month. All of that in a six month period ! If you think about it, that’s insane.
If you rent an apartment that you own, you’ll be lucky to obtain a 1%-2% of profit each year. The figures that I told you before equates to roughly 850% profit per year. That’s unheard of in the offline world.

And it gets better. We feel that we can be a lot more effective now, than when we started. We have already paid the price for all the mistakes that we made. We know better now. So it wouldn’t surprise me to reach a 1000% profit per year, or even more.

Granted, you need those kinds of returns. Why ? Because your business depends entirely on search engine traffic, and that can change in a heartbeat, and hit you big time.

The Desired Approach to It

If you are new to Niche Sites, you probably want some very specific details on the subject. I will get to that, but let me tell you this: having the right set of mind for the task is much more important. If you are impatient and you didn’t like how the last sentence sounded, it’s ok. I understand. It was exactly what happened to us.
I know now that the following points are much more important than a tip on a backlinking tool or a social bookmarking service. So I’ll write them down for you anyway:

• Niche sites are a profitable but risky business, so if you decide to pursue this path you should do it fully aware of those 2 characteristics
• If you base your niche sites, in some sort of loophole in the Google ranking process, the “risk” of your business will skyrocket. Give your sites true value and you will lower your risk
• As with any business, there’s is a natural lifecycle. Don’t rush it. We are talking about short periods of time anyway
• Assign a budget to your endeavour. I will explain in detail how to do it right. But by all means, do it at least on a napkin. Then you will know if you are inside of your budget or not, and you will take important decisions based on that
• Keep building. Move within your budget, but don’t stop building. If you wait until your forst website gives you money, you will not succeed. You will be waiting for months just to make a few dollars every 30 days, and your fixed expenses will weigh a lot more.
• Always have your visitor in mind. If your site is just a cluster of keywords, I suggest you re-build it from scratch. Always go the extra mile with content. You will see why 6 months into the product. Plus, if a angry competitor presents a complaint before Google for spammy content (and they probably will), you want your site to scream “I’m not a spam site” to the eyes of a human reviewer.
• Unless you can devote yourself full time to your niche site building project, you will need help. Prepare yourself mentally to outsource. I will tell you exactly how.

The Scale Aspect

Niche site building is an interesting business only, I repeat, only if you can scale it up. So always think about a repeatable process. I go in depth about it here.

Information Diet

This is important. There’s a blind period between the moment you start building your sites, and the moment your income becomes significant. In the middle, you will start to second guess what you are doing.
So you will start checking your Google Analytics, and your Adsense dashboard every five minutes. It’s inevitable, but is also pointless. Establish some pre-defined times of the day where you will check your data.
You will also be looking for more and more blogs just to see if you are doing something wrong. I will give you a few tips on how to evaluate if things are going well or not.
But instead of doing all that, just keep building.

Keep in mind that no matter how good you are, some of your sites WILL FAIL. So just keep building. In addition to increasing your website assets, and increasing the change of building successful sites, you will be learning the process. And you WILL GET BETTER. And when you get better your success rate will increase.

We will get into much more details in upcoming posts.
Feel free to check our Niche Site Building index for an organized listing of the content.