Deciding on what product or service you will promote in a niche market should be based on a simple principle. There should be a demand for your product or service. You want to offer something that people actually need, something that will make their lives better, make them feel better physically, make them look better, or help them solve a problem.
Once you have chosen a product or service to market, researching to find the right niche for your product or service is the next most important part. The things that you need to know are where they spend their time online, and what makes them tick from a personal and business point of view.
Site Build It (SBI) has a dedicated section for brainstorming a profitable niche. It contains all required tools and video tutorials to make the entire process a piece of cake.
The next thing you need to learn as you research your online niche market is what you can reasonable charge for your product or service. The best and most effective was to do this is to visit sites that advertise products or services similar to what you have chosen to sell. It should be easy to see if they are giving away a service or selling the product at a price far lower than you would have to charge. Make Your Price Sell (free ebook from SBI) provides useful tips on how to price your product or service.
If you can determine that there are people out there who are willing to spend money to buy what you are selling and you can identify those people then you have a niche marketing product or service that can make money on the Internet. Sometimes it takes reframing your product or service to make it more attractive, better or just different than what others are selling it for. Research is the key to successful niche marketing.