Your niche is something that you have a passion for. Now, many successful Internet Marketers go after niches that they are not interested in to begin with, but have identified as potential money makers. I do not recommend this for the beginner because it will be much harder to stay motivated and connect with people in that niche. So your niche can really be anything that you enjoy doing. My niches are my hobbies and interests which include Internet Marketing, web design, positive psychology, fitness (power lifting), and self improvement. Let us take the self-help genre as an easy example for illustration.
Keyword ResearchOne of the main methods I will discuss more later has to do with search engine optimization (SEO). You want to get ranked first in google and get a bunch of free traffic to your website. Now, ranking for anything will not do, so you need to head over to the google keyword tool and do a bunch of keyword research. This is a process I do not have time to get into detail with now, but here is the basic premise.
You search for terms in the Google’s keyword tool related to self help. You may search for "self help" to begin with and then get some more specific suggestions. You will want to look for terms that involve several words and do an "exact phrase match" to find things people are actually searching for. Once you identify terms that get a good amount of traffic and aren't too hard to rank for (another discussion), then you can start creating content and backlinks to try and rank for that term in Google.
In this first method, you find potential buyers by looking at what people are actually searching for. Being the first person to provide people with the products and services they are looking for (#1 in Google) will make you money.