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The most important part of building a niche site is choosing the right niche. You really wouldn’t want to compete with a lot of sites. That is why you on the first place need to find a niche with good amount of searches everyday and very low competition.

There are many keyword tools on the internet, but I’m going to give you the two I use instead of giving them all

http://www.checkrankings.com/keywordsuggestion/
http://tools.seobook.com/keyword-tools/seobook/index.php

Lets create a niche membership site together.

We have to find a niche that people are having problems about, need an answer for their problem or a product which will help them to solve their problem. There are several sites to find the problems people are facing with today. Here are some of them

http://www.clickbank.com/marketplace/ - You may see what other marketers are offering. No one would offer something which is not on demand

www.netmagazines.com – You may also use magazines to find what is hot today.

http://www.mygoals.com/ - People pay to reach their goals ;

After doing some search, I decided to create a site about Paypal and how to make money using Paypal. That is a problem and people actually try to find a solution for this and I can offer them my help on a website. So I go to http://tools.seobook.com/keyword-tools/seobook/index.php and write Paypal in the box and hit on submit

Results are interesting. According to their tool, “make Money using Paypal” is searched over 300 times a day only in Google! That means you’ll receive around 250 unique visitors only from Google if you can make up to #1.

Okay; looks like I’ve found my niche to build a site around, but I have to do a bit more research on this before I start building my website

I now go to www.Google.com and type “make Money using Paypal” to see the number of actual competitors. 

http://www.Google.com/search?hl=en&q=%22make+money+using+Paypal%2

Yes there are only 18.000 actual competitors which is really great. I will be on the first page with doing basic SEO actually

To give you an idea, for keywords that are searched under 1000 times a day, 100.000 actual competitors and below are good to start with and 18.000 is great to start

So I move to next step and buy myself a good domain name. I use www.idotz.net as my domain company but you can use any of the registrars to register your domains.

I type in the first domain name that I think will help me with the search engine rankings and that is make-money-using-Paypal.com. It is always better to use the keywords you target in the domain name so with this domain name, I use all of my keywords in the same order and I’m 100 % sure that I’ll have very good rankings! So I register the domain name and move to the next step.