Finding my niche?

I'm kinda getting sick of trying to build a web portfolio and decided I would rather spend time building my own sites, selling products. Seems like the competition for amateur web developers is getting more and more competitive. Doesn't help that service prices are constantly declining. As a college student, I don't really have the time I desire to do sites for clients anyways.

I figured I could use my current knowledge and build my own site. Any hard work I do will eventually help me down the road to success. I can work in my spare time, randomly throughout the day. My real question to you is, how did you find your niche? I have been thinking almost all week on what I can sell or promote. I thought about selling all kinds of virtual goods, as well as figuring out a way to possibly sell physical goods from a local manufacturer (or somewhere along those lines).

I've been told to do porn so many times, but it's not something that I really want to get into. What tools and steps did you do to find out a niche that you liked? How long did that take?

edit: can I get this moved to the internet marketing thread? I did not see I was in offline, even though I'm also considering finding a physical good to sell.