So, the dropshipping industry has piqued your interest and you’re looking to start your own dropshipping business. The next question is, how can you find a good niche for dropshipping?
There are a few things to consider here. While your passion or interest area can be a good place to start, it’s vital that you’re also looking at what’s trending so that you can pick a profitable dropshipping niche that will cut-through.
This guide breaks down everything you need to know about dropshipping and how to find a dropshipping niche.
Table of Contents
What Is A Dropshipping Business?
How To Dropship Products
How To Make A Profit Dropshipping
How To Find A Good Niche For Dropshipping
- Stable or Trending Dropshipping Niche?
- Identify Your Passion
- Research Those Trends
- Google Keyword Tool
- Facebook Insights
- Google Trends
- Social Mention
- Local or Global?
- Dropshipping Niches For 2022
What Is A Dropshipping Business
Let’s bring it back to the basics first. A dropshipping business is a retail fulfilment method where your business is essentially an online shop-front; you, the merchant, purchase stock from third-party suppliers who then ship directly to the customer.
You won’t be keeping the product you sell in stock. Instead, you order the stock as customers order from you without ever physically handling the product. So, the customer places an order with your dropshipping business, and you’ll then alert the supplier of the order and the order will be sent directly from the supplier to the customer. You charge the customer ordering the product, and the supplier then charges you.
How To Dropship Products
Before we get into how to find your dropshipping niche, here’s a quick overview on how to dropship products. The chain works like this:
The product is created by the manufacturer and a wholesaler will then purchase the product and mark it up. A customer then places an order with your business at retail price. You’ll receive the order, alert your dropshipping supplier of the order(the manufacturer or wholesaler). you alert your dropshipping supplier (the manufacturer or wholesaler) of the order. Your dropshipping supplier then ships the order to the customer, and your supplier charges you.
How To Make A Profit Dropshipping
It’s important to remember that the extended supply chain in a dropshipping business means there are people taking cuts along the way, which can eat into profits.
However, one of the key benefits of dropshipping is that it’s a relatively cost-effective way to start a business. You’re spared the costs of opening a physical retail store, meaning you won’t have store staff and operational expenses, and you also won’t be stuck with dead stock that doesn’t sell. So you’re saving costs on those fronts.
How can you make money dropshipping? Here are a few things you’ll want to consider:
- Pick a profitable dropshipping niche - The niche you pick will have a lot to do with the monetary success of your business. You’ll want to pick a niche that is trending and a product that’s in high demand. More on this later.
- Consider the price - It’s suggested that selling products with higher price tags can help with the profitability of your business, because as we know, the dropshipping profit margin is impacted by the extended supply chain. However, higher prices may deter customers from purchasing, so you could also consider selling a larger quantity of lower priced items.
- Raise awareness through marketing and advertising - Having an effective marketing and advertising strategy will help boost business awareness. Investing in these areas will see more customers through your virtual door and more sales through your website.
- Ensure a seamless purchasing experience - Given the entire customer journey will take place on your website, you’ll want to ensure it’s a positive experience. Ensuring your website design is engaging and the consumer journey itself is quick and easy will prompt customers to return and purchase from you again.
How To Find A Good Niche For Dropshipping
Now, for the main question. How can you find your dropshipping niche? And why is it so important?
A niche is a product, service or interest that a segment of a population is interested in. Narrowing in on a specific niche will help to build your audience and streamline your marketing and advertising strategies. It also makes for a clear and seamless user experience, which we know is important for generating profit.
There are a few things you can do to help identify your dropshipping niche.
Stable or Trending Dropshipping Niche?
Firstly, it’s important to look at whether you want to select a stable or trendy dropshipping niche.
A stable niche is one that remains important over time. So, something like Homewares or Women’s Dresses are stable niches that people are searching for year after year.
A trending niche refers to something that sees a spike in popularity during a certain time period, but interest may dwindle quickly.
Generally, it’s a good idea to select a stable niche and experiment with selling trending products within that niche.
Identify Your Passion
You’ll be working on your business every day, so it only makes sense that you choose to work with a product or industry you’re passionate about.
If you’re excited about the product you’re selling, it’s likely you’ll actually want to stay up to date with industry developments and new products on the market.
This passion will also be a big help when you’re considering how to market your dropshipping business. Passion and creativity tend to work hand in hand, so if you’re enjoying the niche you’re working within, you’ll be steps ahead in working out an engaging marketing strategy.
Research Those Trends
After you’ve identified the product or industry you’re passionate about, it’s important to see if there’s also interest for that product or industry in the wider community.
Luckily, there are a wealth of insight tools designed to help you understand what’s trending and who’s interested in a particular product or industry. We’ll break down a few of these below.
The Google Keyword Tool is a great place to start when you’re working out what your dropshipping niche is going to be.
Using this free tool, you can find how many people are searching for a particular keyword per month. You can also limit your keyword search to a certain geographical area.
So, if you’re thinking about Home Gym Equipment being your dropshipping niche, you can search those terms and related products or keywords to gauge how interested people are in your niche.
Facebook Insights
This tool can help you identify niche markets and trends. You can input a keyword or niche, and Facebook will reveal how many users are interested in that niche per month.
You can get a better understanding of who’s interested by breaking down user demographics, page likes, location and Facebook activity.
Google Trends
Google Trends offers up the volume of searches for your niche over time, which you’ll want to see trending upwards. An upward trend means there’s demand for the product or industry, which is a good thing for your dropshipping business.
Social Mention
Social Mention is a free tool where you can input your prospective dropshipping niche, related keywords, competitors, and receive data from over 100 social media sites.
