How to Find a Profitable Niche for Dropshipping?
By Sam Nguyen
Drive 20-40% of your revenue with Avada
Drop shipping is huge these days. More and more people are getting into it. Drop shipping is a very attractive business model, indeed. At first glance, it looks like you can easily make money without any expertise or a huge amount of capital. You don’t even need to leave your own home. However, it is definitely not as easy as it seems. Just like any other industry, when you start a new business doing drop shipping, you are going to face obstacles along the way. One of them is how to find a profitable niche. And that’s exactly what you’re going to learn in this article.
What is Drop Shipping?
Dropshipping is a retail method where the seller doesn’t keep an inventory of the products he/she sells. Instead, when the store makes a sale, it ships the item from a third-party supplier directly to the customer.
As a result, the seller never sees or has to handle the product. The biggest distinction between dropshipping and the standard retail model is that the merchant doesn’t stock or own inventory. Instead, the merchant buys inventory on demand from a third party – usually a wholesaler or manufacturer – to fulfill orders.
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Where to Get Drop Shipping Ideas
In order to start with dropshipping, or any kind of business, finding the right product is arguably the most crucial task to fulfill, because after all, you cannot sell a product that does not have any value to it and that the market does not want to buy.
You need to kick off your dropshipping adventure with product discovery and research. Selling the right product is the deciding factor that distinguishes highly successful businesses with boring ones that are filled with products that shoppers have no interest to buy.
Product research requires patience and an adequate understanding of consumer demand.
There are a lot of questions that need to be answered while you’re navigating your way towards, among them are
- Is there anyone who needs this product?
- Is the product seasonally trending this year?
- Has anyone sold this product on the market?
- Is the competition fierce?
- Is there any giant on the market that has dominated this product?
You’re going to need to look at the market with great attention and analysis while doing product research. And while you are at it, these are the types of questions you should always ask yourself to determine if a product is worth pursuing.
It does not make sense to decide to drop ship a product that the market is already flooded with. Electronics such as headphones and speakers is the case in my area.
So, let’s look at some strategies which you can use to begin your search with:
- Your professional experience: dropship a product that you have already had experience with.
- Customer pain point: dropship a product that solves a pain point that a certain group of customers has.
- Trends: dropship items that are trendy and have great demand.
- Other people’s passions/interests: dropship a product that satisfies an existing passion or interest.
- Your personal passion: dropship a product that you are highly passionate about.
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Your professional experience - dropship a product that you have already had experience with.
If you had a professional career before deciding to go into dropshipping, you should already grow familiar with the product associated with your profession. This means you know what the product does, how it works, where you can source it and how to talk about it with your prospects.
You may not have a passion for the product at all, but you know it from the inside out, which is a great advantage when it comes to selling something.
Your professional career might give you another unique advantage which is it might allow you to identify a need/gap in the market that no one in your industry has successfully fulfilled. If this is the case, you can dropship products that can fill that gap.
This ability can only be possessed by industry insiders and this kind of unfulfilled gap is rarely recognized by outsiders.
Customer pain point - dropship a product that solves a pain point that a certain group of customers has.
At the root, a pain point is something that bothers your customers. It’s a problem waiting for a solution. It’s an obstacle that causes frustration. It is anything that causes pain.
Could you imagine how frustrating it would be to eat beefsteak without a knife and a fork?
Eating beef steak without a knife and a fold is a pain point, and these two items are created to solve it.
Then you have products like noise-canceling headphones that deal with a different type of pain point – blocking all the outside noise from the environment for those who cannot stand it (yes, I’m one of them!).
Solving pain points makes our lives easier and more comfortable, and therefore this is arguably the most common reason why we buy things. If a product can solve a pain point that is experienced by a lot of people, it will be highly potential for you to dropship.
So while you are researching and reviewing products, seriously take time to consider if the product is something that a lot of people are actively looking for to remedy their pains.
Trends: dropship items that are trendy and have great demand.
When a trend is emerging, being able to recognize it and get yourself ahead of the rest of the market can bring yourself to a large group of customers who are hungry to join that trend, and that, in turn, quickly generate you a lot of sales.
That is short-term speaking though. To be able to succeed in the long-term after you successfully catch a trend, you need to “catch” ones that are part of a strong market, and not simply one that booms one day and is gone the next.
For example, when the fidget spinner came, a lot of people made money with it, and also a lot more people lost their tons of money and still have garages full of these spinners because the fidget spinner is a fad that died out very quickly.
Instead, to survive and grow in the long run, go after trends that fulfill a need or solves a problem that won’t be going away too soon.
For example, 3D printing has been an emerging trend lately. Whether it’s printing toys or household objects, 3D printing is not going away anytime soon.
When you recognize a trend like this, you could drop ship anything from three-dimensional printers, or the raw material and accessories required to get the end products printed.
Besides that, you can broaden your range by selling 3D plans for the items people want to print, and then, if so obsessed, you could print your own fidget spinners.
The take-away is you should go for products that will be around for years to sell and make a profit from; not ones that can be around for just a few weeks until people are tired of seeing them.
Other people’s passions/interests: Dropship a product that satisfies an existing passion or interest.
People have hobbies to keep themselves entertained. Hobbies can be anything; cooking, skewing, furniture building, you name them.
While you may not be interested in a particular hobby, you can still start your business in these areas by dropshipping products related to other people’s hobbies or interests.
There are places where you can easily find what hobbies or interests people often have
- Google for “list of hobbies” and the Wikipedia result will give you a long list of names to explore.
- Check out this list on Hobby Help and you will have another list of hobbies to do your further research on.
Based on these lists of hobbies, you can search Facebook for existing groups related to them and see what these enthusiasts are talking about and how big those groups are. The bigger a group is, the greater the number of people who have that interest.
Once you have identified a group that is big enough and find yourself interested in selling the product that is being discussed, remember to join that group and integrate yourself into that community to learn about your potential customers’ preferences and pain points.
As you learn more about this group of people, you’ll have more insights about how to speak and market to them and know more about what to sell them.
Your personal passion: Dropship a product that you are highly passionate about.
When you have a passion for something, you should already know a lot more about that subject than anything else as you have learnt about it for a long time. One of my friends is super passionate about headphones and he has learnt all about them while trying out different models and brands.
As you have worked your way through the pain and frustration that are associated with this passion, you know that those who have this same passion go through this pain and frustration too.
In other words, you have already understood your potential customers because you are one of them.
So when it comes to deciding what product to dropship, you’ll have a much easier time finding those that you know will sell, because you can focus on the ones that can solve the frustration you once had with your passion; ones that you would pay for.
Thanks to the knowledge that you have, you’ll also be able to quickly skip the products that are not high-quality and won’t sell well.
The great thing about working with a passion is that when things get tough (and they will), you will find it easier to stay motivated and push yourself through the situation, simply because you love what you’re doing, and that makes you less likely to give up.
Best Niches for Drop Shipping
To give you a reference for what niche to look at as you’re navigating your way, here is a list of some of the best niches.
This is surely not a complete list. It does not mean, either, that if you go for products in this your business will boom, and it also doesn’t mean that you’re not going to succeed if you choose a niche that is not in this list.
Please keep in mind that this list is just to provide you with some ideas to help you get started in case you find yourself without any directions, and the possibilities are endless.
Take a name from this list, and move on to the next stage that I’m about to introduce.
How to Evaluate a Niche Idea
After you have chosen a few names that you are interested in, how can you know which of them are potentially profitable and which are not? You wouldn’t want to waste your time trying the ones that are not going to work, would you?
Here are 4 methods that you can use to find out if your niche ideas are profitable:
Method 1: Check out Google Search Volume For Your Niche Idea On Google Keyword Planner
Discovering how many people are googling for your niche idea (related keywords & search phrases included) is a good place to start because when people need something, they search for it on Google.
Although keyword research is by no means the complete picture, it gives you an idea of how much demand there is for your niche.
To check search volume, simply enter your keywords on Google Keyword Planner.
(If you have not had experience with Google Keyword Planner, check out a complete guide here.)
While you’re at it, please remember to choose your location (‘USA’ or whichever country you’d like to target), otherwise the information will be misleading.
You can see in the picture that the search term “3d printer” and its related all have high monthly search volumes, which means that this is a potential niche to tap into.
Keep in mind that right now you are not trying to find out how competitive the niche is, you’re simply figuring out if there’s a big demand for your niche.
So the bigger, the better here so far.
Method 2: Have a look at Google Trend
A lot of people were stocking their warehouse with the fidget spinner not knowing that the trend was dying out.
So, to spare yourself this disaster, do a quick check on Google Trends to make sure your niche is not dying. It’s also better to focus on evergreen niches than trends that come and go.
Just enter your keyword or niche idea in the search bar at Google Trend and check whether it’s a rising or at least a stable niche.
It is worth remembering that just because something is not as popular at the moment as it once was doesn’t mean it’s no longer profitable.
Some things have huge spikes of interest because they are being all over social media and there is a lot of curiosity about it.
Other things get spikes at particular times of years due to being seasonal, after that the interest drops off (travel tours for example).
Google Trend can tell you your niche idea is going upward or downward, but it doesn’t tell you why. So you have to do your own research and find out about it and decide if it’s worth pursuing.
Method 3: Find out if your niche idea is on sale on Amazon and eBay
If it is on sale, there are people who are buying it.
There is a lot of information that you can find about your niche idea by searching for it on Amazon and eBay.
It gives you an idea of how your niche product is priced, how many brands there are.
It also allows you to gain more insights about your idea niche, as buyers leave comments on the products that they have bought.
These details will give you guidance on what problem out there about these products that have not been successfully solved so you can find out what you can do about that.
Method 4: Join Facebook groups about your niche idea.
Facebook groups are where people with the same interest socialize with their peers. Joining them will help you gain more insights about what’s happening in the niche that you’re planning to join.
To put this another way, Facebook groups are where your potential customers are hanging out, and no research can provide more insights than talking directly to your customers and listening to their problems!
Suggested Reading:
- Facebook Marketing: How to Market your Business with Facebook
- The Complete Guide to Facebook Advertising for Beginners
Final Thoughts
I’m going to end this article with this, if you’ve seen that there are products on sale, especially across several channels, and a lot of people are talking about it, and if they show signs of selling well, your idea is likely a profitable one, and there is definitely money to be made in it.
Please keep in mind that there is no such thing as a perfect process for finding and evaluating a niche. Every product is different and they might require different methods.
Before you jump in, it will certainly be beneficial for you to do your homework first, but don’t get yourself stuck in the planning phase, you’ll never actually get to anything by just planning.
To get somewhere, you have to start going first. Be a good starter and keep trying things, if one does not work out, move on to the next. Go get some.
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