There are so many online products to sell and so much competition that it might be worth it to find a small niche so you aren't competing against larger and more well-funded marketers. The problem is, where do you begin to find a small niche?
It is quite hard to find a niche that suits all of us. Most people opt for the bigger ones and soon find themselves bogged down in the intense competition. Small niche are quite small in number and many of the niches don't earn quite a lot to stay in the green line forever which makes it relatively hard to find them.
I think "niche" more in the regards of a demographic type then a product type. Once you identify and cultivate a good demographic you can offer products that will appeal and turn over to sales, to the people in your list
Machida is right. We need to learn a lot of things before we can decide what niche is best and profitable for us. We'll going through a lot of trial and error before finding it. It will consume a lot of time too, but worth trying because once you find it... that'll be your gold mine