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A niche market is defined as a focused and targetable portion of a market in which a specific product or service need is being addressed. The problem with niche markets is finding them, but the reward is worth the effort.

A good, untapped niche is generally all that lies between an Internet marketer and an Internet millionaire. The world is full of niche marketing success stories, yet the untapped opportunities stretch as far and wide as the Internet itself.

Success stories range from giants like the Friendfinder Network to small-timers like your Aunt Polly, who's been selling homemade dreamcatchers on eBay at nice profits for a few years now.

Friendfinder's example is as good as any because it illustrates how a good niche just sometimes lands in our laps. When FriendFinder launched back in 1996, it was one of the first subscription-based social networking sites for adults that didn't feature "adult" content, if you know what I mean.

What Friendfinder did was really remarkable. Rather than putting all of its eggs in one basket, it protected its niche by reaching out with niche sites. Rather than addressing a very large subscription base with a single message, the network launched a series of sites that can each address a specific niche within its niche. In this way, Friendfinder is able to hold its own amid such hefty competition as MatchMaker.com and Match.com.

Finding a niche is something you can do, too. By following a series of important steps (and not skipping ahead), you will soon find your very own niche.

Do your homework:

The key to finding a great untapped niche is research. You have to know where to look and what tools to use for the search. Start by brainstorming ideas. Try to think of things you are passionate about but don't really see online too often. Once you have a list of possible niche markets, it's time to do your homework. Remember - a niche is very specific. Dogs is not specific. Basset Hounds is more focused. Products or services that appeal to working professionals who own basset hounds (such as doggie day care) is better still.

Research the competition:

Do a Google and Yahoo! search for the items that would fit into your niche. How many sites are involved? How many are relevant to your niche? If there are a lot, can the niche be narrowed to such an extent that there is no competition? Are there a lot of paid advertisements that already compete for the same ad space you'd expect to have? A good niche is like a good camp site - it should be inviting but not too crowded. Look for peace and quiet, then lay down your stakes and make camp.

Determine potential profitability:

So, you think you have an untapped niche? Remembering that your ultimate goal is to make money, it is time to determine the potential profits that await you if you pursue your chosen niche. How much does the product or service cost? Is the price comparable to similar products or services? If not, consider whether the price is reasonable.

Remember, you have to sell the stuff. Can the product or service be sold in bulk quantities? In other words, are you going to encounter a supply problem when sales really start to pour in? Is there a limit to how much can be sold? Next, identify potential customers. Pull any available data about sales in this niche, or comparable niches.

How many sales can you reasonably expect? Go a step further. Ascertain the cost of doing business in this niche. How much will it cost to spend to advertise in niche publications? How much will it cost to be competitive with paid search bidding? Weigh potential gains against expenses and try to get a clear picture of the financial future that awaits you in this niche. Now, you have a decision to make.

Learn about tools and techniques that lead to profitability:

The math you've just been doing may discourage you, and it's important to consider the financial picture as it comes into focus, but remember that with good marketing, you can often change the tide. Don't forget to factor in the potential marketing push that can lead to increased sales and profitability! The Internet is full of tools that can assist the resourceful e-commerce entrepreneur. The key is learning where to find them and how to use them.

Keyword research tools can help you build successful search engine marketing strategies that boost your site's visibility - and its profitability. Webmaster tools can provide the technical support you need to build a site that functions properly whether your audience is a potential customer or a search engine spider. Datafeed tools can help you create online stores in a matter of minutes.

Tools exist, and it's up to you to use them. Put all of the resources of the Internet behind you.

Make the niche yours...

Above all else, the niche you choose must be something that arouses passion in you. If you don't care about the product or service you're promoting, that will show in everything you do. Believe in what you're doing, and all good things will come from that.