How to choose a niche that is profitable, competitive, and guaranteed to make you happy with the financial results? Here are some tips we can give you!
How to choose a niche for dropshipping: begin with products
Offering a solution that helps you build a winning product strategy, we want to say it once again: your product choice matters. For you, it’s a good idea to start your dropshipping journey with a basic product choice. More specifically, there are 2 major questions you need to answer.
What are the products you’d like to work with?
At this point, first of all, you need to consider your personal preferences, knowledge, and interests. Let’s say you are interested in conceptual art and drama plays – will you find any joy in selling cleaning household accessories?
Make a list of 8-10 products or product groups that you’d like to sell through your dropshipping store. Don’t forget that these products should meet several important criteria:
- Availability on AliExpress
Go on AliExpress and type the product idea in the search field. Don’t forget to filter the results by the number of orders – this is how you will see what are the bestsellers in the niche. Also, select the items with a 4*+ rating.
If there are less than 500 AliExpress products that match your product idea, you probably should exclude it from your list.
After a more detailed research, you’ll find out that not all of them are a good choice for a dropshipping store. Some of them will have a moderate or low rating, others will demonstrate negative customer feedback, there also will be products with uninformative descriptions and poor quality photos…
One way or another, you won’t be able to use all of the found items to create an appealing store offer. So, it’s better to focus on the options that give you 2,000+ matches on AliExpress.
- Convenience in shipping
Well, you probably guess that office electronics, furniture, and other types of large and massive products aren’t a good fit for dropshipping. First of all, they can easily get damaged during transportation, and most importantly, the shipping costs will be overwhelming.
Therefore, you need to think about small and lightweight items that fit into a standard package and don’t cause the sender any troubles or extra costs. Remember that if you choose ePacket as the method of your dropshipping products delivery, you will only be able to use it for the packages that weigh less than 2 kg (4,4 lbs).
- Legal approval
Is it legal to ship knives, for example? Can you deliver smoking accessories worldwide?
Choosing a product range for your future dropshipping store, you should keep it in mind that every country on the globe has its own legal requirements in terms of the products allowed for import. So, by this point, it’s a good idea for you to also start thinking about your potential buyers – who exactly are you going to target? Will it be your fellow citizens or people from abroad? And what kind of import regulation does their place of residence have?
Which products will be demanded by your potential customers?
Now, as you started considering your potential target audience, it’s the perfect moment to take another critical look at the list of products you’ve selected.
You’ve chosen them from the point of view of your personal preferences, but will they be as appealing to the buyers as they are to you?
To find this out, you need to conduct your own independent research and find out:
- Are these products popular and trendy in the chosen location? Do people look them up on Google, discuss on forums and social media, and buy online?
- Are these items easily available in your buyers’ places of living? If it’s perfectly possible to buy the same products offline, there is no reason for you to expect that people will opt for a long delivery expectation instead.
- Does the interest towards these products increase, decrease, stay stable, or have seasonal ups and downs? Use Google Trends to research this aspect.
After you complete the research, you will see which of the products you’ve picked might be a good find for a dropshipping store. You will understand which of them have a promising potential, and you’ll be able to take the next step in your dropshipping niche choice.
Combine the chosen products into a single category
When you’re considering how to choose a niche for your dropshipping store, this is one of the most important steps. It defines your future promotional efforts and forms the foundation for your super efficient search engine optimization strategy!
At this point, you need to get really creative.
Take all the product types that passed your previous tests, and think what unifies them. Your goal here is to come up with an idea of a store where all these items would look natural and relevant.
Got the idea?
Now, think how to express this idea in 2-3 words. This is exceptionally important: these 2-3 words will eventually turn into your store keyword.
Choosing a niche for dropshipping: selecting a keyword
The keyword you’ll select will be the core element of your whole search engine optimisation strategy. With its help, you will get the opportunity to attract the desired target audience segments to your store, and to generate more gainful sales.
Take the store idea you’ve put into 2-3 words, and check if people look up this phrase.
To do this, use Google keyword planner. If you don’t have an account there yet, don’t worry: just register as a private individual in the system. Skip all the fields that ask you for billing details and company information. It will let you get an inactive account that is still perfect to gather statistical data.
Insert the potential into the ‘Find new keywords’ field (make sure that your Location and Language match the language of the keyword you’re testing).
You will see a results table that lists the related queries and sorts them by relevance. Look at the number of average monthly searches: 1K-10K is the perfect number you need to focus on. Or, alternatively, you can also pick a keyword that has 100-1K monthly searches. This parameter means that the niche is quite specific, which will let you target a well-defined audience with your promotions. At the same time, it isn’t too narrow, so you will enjoy a sufficient volume of profit and a favorable level of competition.
Choosing a niche for dropshipping: checking the competition
Have you picked the keyword?
Let’s see how competitive it is, really – and evaluate your chance to make it to the first page of Google.
As an example, I will take a store idea of unusual adorable office supplies, and formulate it in 2 different ways. Then, I will type it in the Google search bar:
As you can see, here, the situation is pretty tense. The whole page is already taken by large-scale online shopping platforms. For a tiny and new dropshipping store, it will be nearly impossible to make it to the top.
Now, I will try to formulate the idea in a slightly different way:
See? The results are totally different.
Yes, the product selections posted in these articles are, most likely, sponsored – but still, there doesn’t seem to be a well-known online store that uses the same keyword to promote itself. You could try and take this niche!
Have you completed your Google research?
You got one step closer to selecting and specifying a dropshipping niche for your future. There is only one thing left to do.
Evaluate your potential profit
As you probably know it, in dropshipping, your profit depends on the volume of price markup you choose for your products.
The original AliExpress suppliers normally ask tiny sums of money for their items. So, theoretically, even if you multiply the initial cost by 2 or 3, the buyer won’t notice a difference.
How much can you increase the original product cost in this niche? Does it give you the opportunity to make healthy profits from dropshipping?
That’s what you need to find out now.
It’s quite an easy thing to do.
In the pre-edited DropshipMe product database, you can see the Recommended price field.
As well as all the other characteristics of the products in this database, these prices are a result of a thorough market research. The team behind this project has analyzed the cost of similar products offered by other retailers, and came up with competitive pricing ideas for every item in the database. So, you can easily evaluate what’s the potential profit you can get from these particular products and the whole niche in general.
And the best thing here is that you can import the products from this database along with these recommended prices in a couple of clicks. You won’t simply stay free from the pricing-related issues: you will also save an incredible amount of time on product pages editing and improvement! You can read about it in detail here.
Now, you know how to choose a niche for dropshipping that is likely to make your business thrive! Follow the recommendations in the article, and lay the foundation for a prosperous enterprise. Or, use our Niche Research service to narrow down the niches’ list and learn the expert opinion of a skilled team.