This may be a very long post, as these are my thoughts on kinks and niches as it pertains to erotica... at least that I've found so far.
I'm a weird person. I really need to have a story in order to enjoy the sex. Oh, yeah, watching porn and watching two or three or fifteen people go at it is going to cause me to get turned on, but it's... sort of like... automatic. The brain sees sex, it wants sex, it tells the body to want sex. However, it's not like it goes dog-crazy for it. Hmm. Maybe putting it in terms of food would be better. Just seeing sex on the screen for me is like having hot dogs for dinner. Yeah, I like hot dogs, they're tasty and I won't turn them down... but it's not like having prime rib for dinner. Prime rib in this case would be my particular kinks, or what really gets me going. One of these things is context, hence, I need a story to really get into it.
One of the other things I've found is that I'm really fucking into BDSM. I'm not in the lifestyle, though I've read up on it and do have friends who are... but almost all of the stories I've written have a component of BDSM in it. I was rather surprised by how easily that flowed from me. I've never explored it in real life, nor have I in anything I've written... until now. Holy smokes. I had to stop several times when writing out scenes and take a walk to calm down because I was so excited. It didn't matter if it was femdom or maledom either, bondage, spanking, what-have-you... all of it was exciting, and I wanted to explore more of it.
I've found out that about myself, and I'm happier for it, I think. It's a good thing to know yourself, and to explore what makes you tick. Does it translate well into writing? That, I don't know.
BDSM on Amazon is one of the biggest sub-categories of erotica, especially because of the popularity of 50 Shades (which is a big piece of crap, trust me don't read it). Billionaires are also very popular, and evidently so are shapeshifters. All of these kinks are turned into niches when it comes to writing. From my research, those are popular... but they are also very saturated. How do you break into them? How do you find a niche that works for you? How do you turn your kink into something that other people will read for fun?
I think the first thing is to identify what makes you hot. If you really get into what you're writing, I think that will translate on the page. What are your fantasies? What do you dream about? If you could ask your partner to do anything to you or for you, what would it be? If it's kinky and hot to you, it'll be kinky and hot to someone else.
Ok, so taking my example of BDSM... it turns you on, now what? Start broad and work your way down. Don't water it down, but maybe be like... "Ok, I find femdom hot, so I'll write about a dominatrix!" Or vice versa. Maybe it's the bondage part that gets you, or the masochism part. Whichever part, just write about that, and put a quick story to it. It doesn't have to be much for erotica, but it should be attention grabbing. I think that's why the monster erotica does so well... it grabs your attention. "Bigfoot did WHAT to their WHAT?!WTF I have to read that!" From there, it's just trial and error. Write a story, publish, see what the results are.
One of the things I think that a newbie erotica writer should do is to vary up the kinks from book to book initially and figure out which ones felt right to them, which ones flowed easily, and (if you want to make money at this) which ones sold. For instance, your handcuffed by the femdom cop might sell ok, but the suspension story you wrote sold like hotcakes! Well, evidently, you write suspension well, so write another in that vein and see how that does. Once you find which niche you enjoy writing in, or one that does well for you, then you can concentrate in that one and branch out slowly.
I think people have a lot of kinks. I think people like different things, cause they're not always going to be into bondage or yaoi or whatever. People move on from one dream to another all the time. Their tastes change, but one thing never changes... when people find what they love, they love it with a passion. If you can put your passion down on paper, people will respond to that. They'll know that you love this kink as much as they do, and they'll keep coming back.
Of course, I just started out, so what the fuck do I know? ;)