Your decision can either make or break your business. Going with the product that you’re passionate or interested in instead of what people want can, especially, be a very costly business miscalculation.
Your success depends on how you satisfy your customers’ demands.
In this article, we are going to elaborate on how you can choose the proper products and the best dropshipping niche for your ecommerce business.
How to choose the best dropshipping niche
But First… find the top 18 Dropshipping Tips that all beginners should know.
If you don’t start out with a firm product line, your business is going to go through many obstacles before it becomes successful.
The market is already flooded with millions of products, and deciding on which one will be the best fit for your business will not be easy.
Other problems can easily arise because of your choice of product – problems that you’d need to solve. For example, if your product choice is refrigerators, you could encounter shipping problems.
Here you can learn how to reduce the shipping times when working with Aliexpress suppliers.
If your product choice is an alcoholic beverage, you could encounter tough legal stipulations from the local government where you want to ship them.
Therefore, do thorough market research before choosing your products. While this process may be exhausting, it is crucial because you don’t want to sell products that will not appeal to your target market.
Research the market trends of your business idea to find out how it’s currently performing in your target market.
And even though you don’t already have a business idea, market trends can still give you an idea of what people are currently buying or are interested in. This way, you can be able to decide on what you’ll sell.
The products you sell should offer solutions to an existing problem in your target market. If through your research you find out that consumers are no longer interested in what’s being offered in the market, offer them better products.
What to sell at your Shopify Store?
Useful resources about Shopify:
- Sign up for Shopify
- Learn how to create your first Shopify Store
- Inspire your journey with the 50 best Shopify Stores
You can also consider offering them a product that’s hard to obtain locally or a local product in which other people outside that area are interested.
Also, you can look at the interests of your target market then offer a product that will cater to those interests. You can base this on the latest TV Show or fashion trend.
That’s not all. You should expand your research to find an opportunity gap. If competitors are already offering your product choice, think outside the box on how you can differentiate your product.
Differentiating factors can range from a better product feature to an ignored market, or even a different marketing strategy.
If your product choice is based on the current market trend, ensure that you do it on time before the trend fades away.
Capitalizing on the trend early will be great for your business because at that time many people will be buying the product. If you don’t move with the trend on time, you’ll miss out as people will soon be moving on to the next big thing.
Unless your business idea is to bring back a trend that’s fading away, you need to take advantage of new trends.
It’s crucial to consider product turnover as you make your choices. It’s more time and energy-consuming to offer a product line that changes every other year.
This means that you’ll have to keep changing your product list to exclude what’s no longer being offered.
You can only run a more informative website that won’t require updates for a long time only if the products you’re offering have a lower turnover.
You should not shy away from product categories and niches that are small-scale. Even though they may have fewer prospective customers, they’re not over-saturated with competitors.
This will make it much easier for you to get a high search engine ranking and be able to run cost-effective advertisements.
Choosing your best dropshipping niche plays a huge role in the success of your business, take your time to choose a product that will appeal to your target market.
In order to develop a successful dropshipping business, you must have the ability to do one of these things:
Be Able to Access Exclusive Distribution or Pricing
Exclusive agreements for products or pricing are also something to consider. They will work in your favor by allowing you to sell online without having to buy in or manufacture your own products.
However, keep in mind that getting exclusive agreements is not an easy task.
Also, your products might still be more expensive than those of your competitors who are offering the same or similar ones in the market at cheap wholesale prices.
Therefore, when you decide to offer exclusive products and prices, you’ll need to persuade your customers that your product is of superior quality as compared to the competitor’s product, especially if your competitor is selling counterfeit products at a lower price.
That’s where the role of your website’s ‘about us’ page comes into play. This page can be used to share information that you are the exclusive, genuine seller of the product.
Sell Products at the Lowest Price that You Can
Offering your products at the lowest price possible is a strategy that you can use to attract a large number of buyers away from your competitors to your website.
However, note that this strategy is highly likely to fail because you won’t be able to make profits.
Customers do not always decide to buy something because the prices are attractive. High value and low risk are also major determinants of purchasing decisions.
This implies that you will have to persuade your potential customers that your high prices are worthwhile because they will be getting value for their money from your products.
Add More Value Besides the Price
A genuine entrepreneur will not just depend on pricing as the selling point. He will also offer solutions to the customer’s problems in order to add more value.
For example, you can offer information about your products so that your customers can know more about what they are buying.
Offering knowledge and guidance to your specific niche will help you add value to your products. Your customers will appreciate having access to readily available product information for any questions that they have about your products.
You will also enhance customer satisfaction by quickly responding to their emails. This will give your website a competitive advantage over other drop shippers.
Adding Value while serving your dropshipping niche market
This is not as simple as it may seem and it may even work in some niches, but not all.
Therefore, look for major features that will make it simple for you to add value with content, particularly in niches that:
Constitute Various Components
If the product you’re offering has various components, there’s a higher likelihood that your prospective customers will search for more information about it on the internet.
For example, deciding on which office chair to buy is easy because it’s a simple purchase.
On the other hand, if you are looking to buy a high-tech home security system, you’d want to know more information about it; for instance, how it works, how can it be set up, and so on.
You have better chances of developing your value by providing product information and education if your products have more components and variety.
If your product offering can be categorized here and doesn’t change year after year, you can develop an informative website that will help your potential customers understand why the products you’re offering are valuable to them. This will also help build trust with your customers.
The information provided will be answering their questions conveniently instead of them having to call or physically visit a store to make their inquiries.
Are Unclear or Can be Customized
In this case, take the same strategy as the one above -if the product you are offering requires more clarity or can be customized. Build your value by offering knowledge on how to use the product, where the product components can be used, and how to customize the product.
Remember, if your product line will not change year after year, it will be to your advantage to develop an informative website.
However, note that it will be more difficult to do so if customizations are changed frequently.
But if the main component of the product remains the same, then it’s certainly not impossible to set up an informative website. The information about the main component will be of higher importance than the customizations.
Needs to be Installed or Setup
This is possibly the least complicated choice – products that require technical installation, especially if they’re not simple products.
To refer back to the complex security system – assuming that you were choosing one and one website provided you with two-page setup information while another website offered you detailed steps on several pages, including troubleshooting information.
Which product would you choose to buy? The most comprehensive information and guidance are more helpful to customers and will enable you to get customers.
How you Can Add Value
This process is reasonably easy and can be achieved in a number of ways:
● Develop comprehensive user guidelines
● Develop comprehensive product descriptions and listings
● Develop guides for installation and setup information
● Develop comprehensive videos that showcase the workings of particular products
● Develop a guide or system that shows the compatibility of a product
Choosing the Best Customers
It is crucial to keep in mind that target markets or customer groups constitute various demographic types even after you have selected and settled on one.
Beware of what demographic will have an interest in what you’re offering and what’s the best way to appeal to your target demographic.
You can’t just assume that all customers are the same – you might learn that the customers who buy small products with low prices will expect the most from you.
On the other side, customers who purchase expensive products don’t expect more from you, just what they are buying.
This means that you will have to ensure that you are targeting the correct demographic for your products.
These three types of customers will highly contribute to the success of your business:
People with Hobbies
A lot of people have hobbies that they’re really passionate about and will spend huge sums of money on gadgets, appliances, and training.
For example, some committed cyclists can spend more on bicycles than on a car while a passionate fisherman will spend unbelievable amounts of money on fishing equipment.
Being able to target the best dropshipping niche – people with hobbies and offering them products that cater to their needs will really boost your business.
The buyer behavior of business customers is more affected by prices as compared to the buyer behavior of ordinary customers.
However, business customers buy in larger quantities than regular customers. You can develop a long-lasting business that can sell in huge volumes as compared to what your regular customers would buy.
You just need to establish a good rapport and relationship with these businesses and you’re set on the long-term.
Returning customers means a repeating stream of income. Therefore, if you can get such customers, you have the opportunity to grow your business through repeat purchases.
Sell products are most likely to be reordered so that you can quickly build up a loyal customer base and achieve your growth goals through their repeat business.
All these three types of customers are beneficial to your business and you can’t really choose one over the other.
Just find out where either of them fits and ensure that you cater to their needs as effectively as possible.
Additional Considerations when choosing the best dropshipping niche
You must take these additional considerations into account when choosing the product that you intend to sell:
Take your price point into consideration in connection with the services you provide to your customers before the final sale.
A lot of people will be content to make a $200 purchase without first speaking to a customer service representative.
On the other hand, they will not do it so eagerly if a product costs as high as $1000. When a lot of money is involved, a lot of people will inquire more about the product first, and not just to know more about the product but to make sure that the seller is genuine.
If your product choice is going to be highly priced, ensure that you have the capability to offer quality phone support to your customers, and that means that your customer service staff will need to have sufficient knowledge about your products.
Your profit margin should also be able to cover the cost of customer support. In most cases, you can find a balance in costs and benefits between $50 and $200.
If you are on a budget, here’s our ultimate guide on starting a dropshipping business for free.
MAP basically stands for the minimum advertised price. This is the price that some manufacturers set for specific products so that resellers cannot advertise below the set price – they either sell at a set price or a higher price, not below.
This is done in order to prevent price wars, which occur a lot in the dropshipping business. It also helps the resellers to earn good desirable profit margins.
Search for manufacturers that will impose MAP pricing so that your business can make substantial profits.
Even when all competitors sell their products at the same price, you can still create a competitive advantage by developing a strong and convincing website and sales pitch.
This way, you will still be able to stay relevant in the market should cheaper prices arise.
The Marketing Potential of Your Business
This refers to the entire size of the market for your product at a particular time.
Put in place an effective plan to let as many people as possible in your market know about your webstore. An adequate plan will contain involvement, usually through free platforms.
You shouldn’t wait until the launch date to start thinking about marketing your product – marketing is very crucial and you should think about it well in advance.
You will only get new visitors to your website by promoting it, creating and launching your social media channels, creating articles, creating a blog, and participating in online forums that are relevant to your niche.
Accessories are items that you can add to your product to complement it in terms of versatility, usefulness, and uniqueness.
If your product choice can be accessorized, take advantage of this and offer as many accessories as possible in your webstore.
Through this, customers will be able to customize their products and portray their individuality.
It is an unwritten rule that the margins on items that are highly-priced are lower than the margins on their matching accessories.
For example, people will shop around for the smartphone with the best price but will not spend as much time looking for its matching case. The likelihood is high that they’ll buy the case from the same seller they’re buying the phone from.
If you have the capability to offer accessories that are compatible with the main product, you will be able to attract customers to buy from you.
This can especially work for a seller who is offering accessories that cannot be found with other suppliers.
Here’s our guide on choosing the best dropshipping suppliers.
As previously discussed, you will attract customers to your website if you offer information, guides, and education as an added value to your products.
But, if your product choice changes year after year; for instance, a smartphone, you’re going to spend a lot of time maintaining your website.
Choose products that will not need regular updates so that your website can be long-lasting.
Products that are Hard to Find
Don’t be too rigid with your product choice – if you can identify a product that people can’t easily access in the local market, you have a chance of highly benefiting from the returns.
For example, if someone wanted to buy a rake or a hoe, they’d just get it from a hardware store that’s closest to them.
However, if they wanted to buy something rarer, like falcon training equipment, they’d have to search for it further.
Therefore, a more specific product offering will bring in a number of customers that are looking for that specific product.
Small is the New Big
A lot of buyers expect the seller to offer free shipping nowadays. However, if your product choice is big, expensive items, you will either go at a loss because you’ll have to foot the shipping charge, or you’ll lose customers because they won’t be willing to pay the shipping charge.
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Selling small products is simpler when it comes to offering free or cheap shipping.
It will also not be easy to choose the best dropshipping niche. You will be required to consider a lot of things before you settle on the proper niche.
These are the key guidelines to consider as you make this choice:
Deciding on a product to sell on your webstore can be overwhelming because there are way too many products to choose from.
Narrowing down the choices in order to get the most appropriate product that will make you optimal sales and profits isn’t easy.
You can ensure that you make the right choice by researching your product choice. Look into the market trends and customer interests in the market you intend to enter.
Also, learning more about the potential competition will help you decide on whether the market is already too crowded or if there’s room for you as well.
The bottom line
Getting a product that will be of value to your business will require effort and time. You will also need to take time to find other products that you can accessorize your main items with to complement them.
However, once you have achieved this, you will be able to launch a very successful e-commerce website and earn great profit margins.
After you have found your place in the market and settled on a product, the next step will be to find a reliable supplier to stock your product and ship it to your customers effectively.