There are lots of people making money telling people how to find niches,(mmm niche idea comparison site) - snake oil! I think that jonsp has hit the nail on the head, spotted the elephant in the room, a niche is no good at all unless you can add value. Now that can either be through offering discount vouchers, price comparison, good reviews or product descriptions or something really novel.
A niche in my book is doing something better than the big boys - ie specialise. For example car insurance would be difficult to rank for but ranking for Morris Marina insurance would be easier but not as popular and perhaps not that profitable. Finding a niche is very, very easy, finding a niche which is popular and profitable is a lot harder, although not impossible. GKW tool doesn't help you with this and is, in my opinion useless, and time wasting and can't even come close to your own brain in assessing what may be a popular untapped niche.
I suppose what I have learned about niches is that you need to kiss a few frogs before you find your prince. So I am puckering up and stock piling tons of lip balm ready for the long haul!
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