Dropshipping Niches and Your Online Store
As an online retailer, choosing what products you sell is absolutely essential. Remember that online retail can be a crowded space as everyone jockeys for consumers’ attention and hard-earned dollars. This is where the concept of a niche comes into play. Dropshipping niches are little corners of the overall market that you can carve out in order to meet a specific demand. In reality, no online store that is largely independent can be everything to everyone; the sheer volume of online shoppers is simply too great.
It’s true that huge companies like Amazon can hypothetically meet all customer demand, but that is simply not the case with small-scale online retailers. It is far better to be selective about your inventory rather than trying to carry every kind of product.
Where Do You Start? Brainstorming Some Ideas
Online retail is absolutely huge. There are so many different types of products and consumers can have a wide variety of demands. So how do you even start looking for a niche?
In order to come up with a preliminary list of dropshipping niche ideas, go ahead and identify the following things:
- Last five things you bought from an online store.
- What most people like to do when they are on vacation.
- The hobbies of your friends and family.
- Most expensive item that you have in your room at this moment.
- What your friends and family have in their homes.
Identify these things to start brainstorming. Once you do this, then list every potential niche you think of, even if they seem dumb or silly. Congratulations! You are now on your way to finding your niche. This is likely the most important aspect of setting up your dropshipping store. It will be the basis of your personal brand and the connections you forge with your customers.
Additionally, finding the right provider is crucial. In fact, think of this relationship like a collaboration. In doing so, you will ensure that your collective efforts will contribute to your potential success. Always remember that a good and reliable dropshipping provider is especially important if the products you will be selling need to be packed or shipped in a specific way. Some providers already specialize in a certain kind of product or niche; for example, a provider that specializes in the general category of organic and natural products such as Greendropship will meet a very specific kind of demand in the online marketplace.
Analyze Your Niche Ideas
Once you have a list of potential niches, you should then analyze them in the following ways:
- Level of competition. Choose a niche with high demand that is not overly saturated. You can start by going to Google and entering the search query “allinurl:niche name” (for example: “allinurl: essential oils”). Google will then generate all the websites that have your keyword in the URL. Don’t forget to keep this data when you analyze your niche with AliExpress (see below).
- Customer loyalty. It’s best to steer clear of niches that are dominated by widely-known brands. This is because you want to build customer loyalty to your store and not the product.
- Pricing. Setting the right price is also important. You want to make sure that your price is appealing to customers while still allowing you to make a profit after you pay for your overhead and operational costs. As a general rule of thumb, it’s best to choose products that you can sell with a profit margin of at least 30%.
- Shipping weight. Shipping is always expensive, so the best paradigm to follow is a high-priced product with a lower price point. That’s a winning combination!
- Returns. If possible, steering clear of product niches that have size and style preferences will lower the return rate.
- Reliable dropshipping provider. You have to be certain that your dropshipping provider is reliable and has an extensive inventory for your product niche.
This is an excellent way to start finding your dropshipping niche. By conducting this kind of cursory analysis, you will effectively ensure that you can be prepared for the specific challenges that may face you on the road ahead. The best niches for dropshipping are always determined by research, research, and research!
How to Find Dropshipping Niches Using Google Tools
Google has several tools that can help you during your search for the right niche. Google Trends is one of the tools you can use. It helps you analyze public interest in a product by:
- Showing how search volume changes over time.
- Identifying the most popular search terms.
- Providing the geographic location of the people using these search terms.
- Determining if the interest in the search term is seasonal or year-round.
By combining the right keyword with relevant information on its search volume, you are well on your way to narrowing the entire online marketplace down to a usable niche. This is all part of the research you have to conduct, and remember that identifying your target market is a necessary step on your path to success. Follow these steps when using Google Trends:
- Choose a category of product (essential oils, for example).
- Go to Google Trends and type this category into the Explore Topics field.
- Look at the results. You can also use the following parameters to narrow your search down for a more granular level of analysis:
- Geographic region of interest.
- Time frame (over years, months, or even days).
- Type of content.
- Be sure to keep this data to then use with the AliExpress tool (see below).
By using Google Trends and adjusting these specific parameters, you can easily determine if there is sufficient interest in your chosen category. Most importantly, you can also see if that interest is increasing, decreasing, or staying the same. You may also be able to determine if the interest is semi-permanent or is simply a passing trend or fad. If a search term is minimal for years and then there is a sudden spike upward followed by a steady or dramatic downturn, it’s fairly safe to assume that this is a passing fad. However, due to the flexibility of a dropshipping store and the fact that you do not have to keep inventory, you can always capitalize on this fad to meet the temporary demand. Remember that you will never have to worry about unsold inventory due to the low-risk nature of dropshipping.
How to Find Dropshipping Niches Using Amazon
Amazon is an absolute colossus in online retail. They are the largest online retailer in the world, meaning that it can potentially serve as an excellent source of market research. To use Amazon as a way to find niche products to dropship, just follow these steps:
- Go to Amazon.
- Click on the All tab at the left of the primary search bar. This tab will give you a list of product categories (or niches, for the purposes of your market research).
- Choose one of these categories and press the search button.
- Amazon will direct you to a new page with search results that has an entire list on the left-hand side filled with categories and niches.
- Choose one of these niches and Amazon will direct you even further down to a subcategory or sub-niche.
- You can now arrange the search results by price or customer review.
For example, choosing Beauty & Personal Care under the general category and entering essential oils as your search term will give you over 40,000 results! You can narrow this list down by choosing more and more specific niches like Organic, Natural, Hypoallergenic, Alcohol Free, and so on. This will allow you to identify various sub-niches that you may not have even known about. Additionally, you can see the product prices both directly from Amazon and from other sellers who have online stores. Remember, doing your research is the most important part of the process, so you want to make sure that you will have a decent profit margin and steer clear of a saturated market.
How to Analyze Potential Dropshipping Niches With AliExpress
Last but certainly not least, AliExpress provides a powerful tool that is specially designed to help you analyze your niche via the following parameters:
- Products quantity. Input your keyword to generate a list of the number of items found on the platform.
- Niche popularity. Calculate the arithmetic mean by taking the first 10 products and adding up the total number of orders for these products.
- Trusted supplier. Check these same 10 products and calculate the average of the sellers’ ratings.
- Price setting. Take the price of the most popular item and compare this value with 3-5 other online stores. Take this average and compare it to the price set by the AliExpress seller, with a difference of more than 250% being the highest markup possible.
- Seasonal demand or trends. Use the data you gathered from Google Trends.
- Promotional potential. Go to SEM Rush and enter the keywords. Check the Volume parameter under Organic Search, with 5,000 to 50,000 being the highest possible volume.
- Competition. Use the allinurl:niche name function mentioned above to see the number of results.
- Keyword explorer. Register at Moz to access their Keyword Explorer to determine how difficult it is for your keyword to rank.
- Google search analysis. Search your niche keyword in Google and see if the first 2 pages are dominated by retail “giants” like eBay or Amazon.
- Instagram. Use Websta and search your niche keyword to find accounts with at least 30,000 followers.
- Facebook. Search for the number of groups in your niche with at least 30,000 members.
After you input all these values, the tool will give a score on a scale of 1 (poor) to 5 (excellent) to determine the suitability of your niche. This is essential!
Dropshipping Niches and Your Online Store
As you can see, there are a number of tools available to online retailers. Always remember: research, research, and research! As an online retailer, you want to effectively identify the most profitable possibilities. Because of the sheer size and scale of online retail, this can seem overwhelming. Where should you even start? How do you tell what people want?
Well, let’s take a look at what we covered in this post and break it down like this:
- Ask some intuitive questions to brainstorm potential niches.
- Do a preliminary analysis of those potential niches.
- Use Google Trends and Amazon to identify or further refine your dropshipping niche.
- Once you have chosen your niche, use the AliExpress tool to extensively analyze its suitability.
Following this general outline will give you the best chance of finding an excellent niche. Some online retailers like to work within a niche that they feel passionate about, thereby giving them a more personal stake in their online store. Other retailers choose their niche based solely on their suitability and potential profitability. How you decide to start is up to you, but once you have brainstormed that first list of potential ideas, there are tools at your disposal to fine-tune the nature of your dropshipping niche. Be sure you use them!