Finding a profitable dropshipping niche is the stepping stone to starting your dropshipping business.
Not only will your audience revolve around it, but so will your business plan and marketing strategies. Yet, as simple as it sounds, there’s more to this than meets the eye.
First of all, with thousands of options to choose from, it is easy to feel overwhelmed. And even if you have a certain niche in mind, what’s the guarantee that it will generate profitable results?
This is why in our Ultimate FAQ Guide, you’ll learn how to make the process easier by going through everything you need to know about choosing a dropshipping niche.
So let’s dive straight into it!
What Is a Dropshipping Niche?
If you’re new to the world of e-commerce, you may be asking yourself what is a dropshipping niche, to begin with?
In simpler words – a niche is choosing or targeting a specialized market or an area. So by that definition, a niche in dropshipping would be the specific product category you want to build your business around.
Still confused? Imagine your business deals in clothing. Now you can either become the jack of all trades by selling any piece of fabric that comes in your sight or you could become the master of one.
That can be done by targeting a specified segment or in other words, a niche.
It may include a certain category of clothing like jackets, shorts, or even trousers. This is what going for a niche market in dropshipping is all about.
What to Choose, a Niche Store or a General Store?
The next logical question that may be coming into your mind is, why not go for a general store instead of a niche store?
General stores will maximize the growth of your business by having everything your customers are looking for, correct? Well, it isn’t as simple as it sounds.
Here are a couple of things that may help you decide whether to choose a niche store or a general store:
In comparison to general stores, it is much easier to rank niche stores on the search engine results page (SERP).
The algorithms value niche stores more and niche products would likely be placed at a higher position than the same products in a general store.
As a result, once your niche store ranks higher, you are more likely to get more filtered and organic traffic as well. This is one of the reasons why general stores often have a hard time competing with niche stores.
It isn’t really that surprising either because even if we take a real-life example, most people prefer dealing with sellers who specialize in a certain niche. As opposed to someone who has every product of that category lined up.
A niche store also has a much greater marketing potential as well.
The reason for that is, it is much easier to promote your business by highlighting a specific product category rather than focusing on everything.
When your marketing strategy revolves around a certain niche, you can come up with a plethora of creative ideas to grab the attention of the audience.
Similarly, it is also easier and cheaper to market a niche store on social media platforms like Facebook and Instagram.
All you have to do is to select your audience, pay the price, and you are set to go. But for a general store, things are not as black and white.
Effective marketing and ranking higher on the SERPs is a key formula to generating more profit.
So in terms of long-term profits, a niche store can do much better in opposed to a general one. As it targets a certain group of people, you are more likely to get recurring orders.
Even though finding the right niche may take a bit of trial and error, the end results certainly make it worth the hassle.
Tips to Keep in Mind While Searching for a Good Dropshipping Niche
Before you dive into your search for a profitable dropshipping niche, there are a couple of things you need to be mindful of:
Do Not Rush the Process
Focused brainstorming is one of the key steps of finding a good dropshipping niche. While it is true that all of us want to get started as soon as possible – make sure not to rush the process.
The more time you spend on carefully analyzing the pros and cons of a niche, its market competition and overall profit margins, the better the results you will be able to reap.
Avoid Copying Other Businesses
What works for someone else, may not necessarily work the same way for you as well. Each business has its unique marketing strategy and techniques to capture the attention of the customers.
Rather than copying what other businesses are doing, start by evaluating your own strengths and weaknesses.
Narrow down which niche do you have the most experience in. Dropshipping is not as simple as most people make it out to be. In fact, it involves quite a bit of trial and error before you can finally catapult your business towards success.
Think from a Marketing Mindset
Effective marketing is the cornerstone for the success of your dropshipping business. This is why it is essential to think from a marketing mindset when you are searching for a good niche.
Try exploring the marketing potential of different products. Evaluate how it can be presented in front of the people and whether it has a certain selling point that you can capitalize upon.
In short – brainstorm whether the product can target the pain points of the customers and how you can present it as a solution.
We understand that it can be tempting to cash in on a viral trend, however, is it really worth it in the long run?
Most things do not stay viral forever. If you are building your dropshipping niche surrounding a viral product, then it will only bring in profits for so long before it comes crashing down.
This is why instead of settling with short-term financial gain, thrive to build your dropshipping business around a long-term profitable niche.
And before starting your product hunt if you’d like to learn more about dropshipping then NicheDropshipping is a China-based dropshipping company that can help in equipping you with all the knowledge you require.
How to Find a Profitable Dropshipping Niche
Now that everything is in place and you’re familiar with the basics, it’s time to decide how to pick a profitable niche?
Even if you have a fantastic idea in your mind, it isn’t of any use if no one is interested in buying your product.
This is why here are a couple of steps you can follow to make your search easier:
Step 1: Search for Rare but Trendy Products
Analyze the market and determine what the current trends are. For starters, you may have seen a rising demand for wireless headphones. However, is it a good product to build your business around?
Both online and offline, you’re going to find a plethora of sellers selling this product. So it’s safe to say that if you’re choosing headphones as your niche, then penetrating the market wouldn’t be easy.
Alternatively, more and more people are getting into woodworking and DIY projects nowadays. And for that, you need to have the right power tools.
When you think about it, there aren’t many stores out there that sell those. So the first step is to try targeting what’s in demand, but difficult to find.
You can even ask yourself the question: what are some things you may require in your daily life, but you’re unable to easily find them at the stores?
Keep in mind that this may require quite a bit of time and brainstorming, so don’t get discouraged if you aren’t instantly able to think something up.
Step 2: Gather Product Data and Insights
Once you have shortlisted a couple of niches, how can you verify whether they’re truly in demand?
There are a couple of online tools you could use. However, most dropshipping professionals prefer starting from Facebook Audience Insight as there are more than 2.7 billion active users on the platform.
It provides insights on user interests, interactions, location, lifestyle and much more. Alternatively, for Instagram, you could use Instagram Insights that offers similar functionality.
Another common way to determine how a product is doing is by looking it up on Google. Fortunately, Google keeps this information available for the public and you can use its Keyword Planner tool to find out.
Similarly, you can also get more detailed insights on Google Trends, in case, Google Keyword Planner doesn’t cut it.
The tools we’ve mentioned above have their own unique features and are widely used by dropshippers around the world. We’ll soon talk more about them in a later part of this guide.
Step 3: Calculate Profit Margin
After you’ve successfully found a couple of in-demand products, the most important question that comes is: “how much is their profit potential?”
There are a couple of ways to approach this but first, you need to look for suppliers who offer the best rates.
This is also a research extensive phase as the cheapest is not always the best. The quality of the products plays an essential role in the success of any business.
However, you don’t have to order any sample products just yet as you’re still in the research phase. Simply, get a rough idea of the market and the average lowest price you can find the product for.
After that, start evaluating the price your competitors are selling the products in, which brings us to our next step.
Step 4: Evaluate your Competition
It’s time that you make a list of other dropshippers dealing in the same niche and compare their prices.
Find out the lowest price in the market for that product as well as the highest.
Check out the customer reviews at the stores of your competitors to get the gist of the kind of quality they’re offering. That will also help you understand where your competitors are lacking and what you can do to improve it.
Customers often feel reluctant to trust new stores due to the lack of reviews, so you want to capitalize on any opportunity you can get.
Initially, you’d want to keep your profit margin at the bare minimum. As boring as this may sound, it’s essential to help you build your market reputation.
Once you’ve evaluated the market and the pricing, you’ll have a better idea of whether the niche is worth spending your time over or not.
Step 5: Narrow Down your Options
Finally, you now have all the information that you need to narrow down your options.
There are a number of things that you need to keep in mind before you can finalize a dropshipping niche. This includes the sourcing requirements, supplier reliability, as well as overall profit margins of the product.
However, just because a product is offering a higher profit, doesn’t mean it is the best option you have.
Some products that offer a low margin may be higher in demand, in comparison to those that generate more profit per sale. So if you think a product has the potential to help you receive recurring orders, then it’s definitely worth looking into.
Start carefully going through the data you’ve gathered in the steps above, and go with the product that you feel the most confident about.
Congratulations you’ve now found a profitable dropshipping niche and are one step closer to launching your business.
If you’re still confused with your product hunt, then you can also check a list of best niches to dropship at NicheDropshipping.
Finding a Dropshipping Niche using Online Tools
As discussed earlier, modern tools can make your hunt for a profitable dropshipping niche significantly easier. So let’s have a more in-depth look on what they bring to the table:
Facebook Audience Insight
Facebook Audience Insight makes it much easier for dropshippers to analyse niche markets and trends on Facebook by providing information like:
- User Interaction – Overall activity on different promotions, comments and likes.
- Demographics – Type of audience with information such as gender, age and lifestyle.
- Like and Interests – The kind of products and content and topics the audience is interested in.
- Location – Language of the audience and their geographical location.
All you have to do is simply enter the keyword, and leave the rest on this powerful tool. Once you get the results, you’ll have a better idea of which market you should target.
Instagram Insights, just as the name suggests works in a pretty similar fashion as Facebook Audience Insight. However, the tool is only available for Instagram business accounts.
With that said, you can also convert your existing Instagram account into a business account.
Once you’re done, you will easily be able to access Instagram Insights to see what niche is popular among Instagram users to turn it into a money-making machine.
Google Keyword Planner
Nowadays, the success of most online businesses depends on how well they do on Google SERPs. The same applies for a dropshipping business.
So if you want to analyse how a certain product is doing online, then Google Keyword Planner can assist you with that.
All you have to do is enter the keyword on the tool and it will display results of how many people every month are searching for it.
With that said, this guide will not exhaustively cover how Google Keyword Planner is used to search for dropshipping niches. But keep the following three things in mind:
- Match Type – You can either choose to get results for a broad phrase which will also display other relevant data, or go for an exact match.
Unless you are planning something big, we suggest going for the latter. As exact match will provide you with more accurate insights and how well a certain keyword is doing.
- Long-tail Variations – One mistake most people make is that they focus too much on short-tail keywords (keywords that are made up of no more than 3 words).
However, you would be surprised to see how much you can benefit by targeting long-tail variations (longer and more specific phrases).
That will display results of a very specific segment with a much lesser competition that you can potentially choose to make your dropshipping niche.
- Search Location – The search location heavily depends on your dropshipping business plan. Do you intend to operate locally or globally? Set the location according to that.
On Keyword Planner, you’ll only get raw search figures. So if you want to dive deeper and get more detailed insights for your dropshipping niche, then Google Trends is the tool for you.
You can expect to find the following information on Google Trends:
- Rising and Declining Terms – Google Trends not only provides insights on the most popular searches, but also the queries that are gradually growing or declining over time.
You can utilize that information to build your SEO strategy around it and plan your marketing efforts accordingly.
- Seasonal Demands – Before you finalize a product, keep in mind its seasonal demands. For instance, water heaters hardly sell during summers. While, in winters, they generate huge profits.
Google Trends enables you to search for seasonality so you can lay the groundwork for your marketing efforts accordingly.
- Geographically Focused Results — Using Google Trends, you can get geographically concentrated results of different queries.
This will help you better decide where you can find the largest customer base for a certain niche and the overall profit potential.
What Niches You Should Not Dropship?
Searching for a profitable dropshipping niche is already a long process. However, knowing what to avoid can at least help you save some time.
So here’s a list of what niches you should not dropship:
1. Products You Can’t Advertise
Dropshipping is all about marketing and advertising. The better your marketing strategy, the more audience it will reach and the more profit you will generate.
However, the following products cannot be advertised on Facebook, so it’s best to avoid them:
- Adult Products
- Tobacco Products
- Unregulated Supplements
2. Large Products
In general, shipping large and heavier products can be quite difficult even from a logistical point of view.
The heavier the product, the more shipping fee you will have to pay. And heavier products tend to easily get damaged as well because it’s more difficult to transport them.
On top of that, there are always chances that a customer may ask for refunds so it’s best to avoid big products.
3. Potentially Dangerous Products
As we mentioned earlier, Facebook doesn’t allow the advertisement of weapons, this also includes non-culinary knives.
Moreover, every country has its own laws, and some of them may have certain restrictions regarding importing such products as well.
So avoid a product that you’re even slightly unsure about.
4. Delicate Products
It shouldn’t come as a surprise that you should never dropship fragile or delicate products, unless, you feel super confident they wouldn’t get damaged.
No matter how safely you’ve packed the product, it may still be exposed to harsh shipping conditions and external impact.
And the next thing you know is, your customers will be asking for refunds and leaving reviews on your store for delivering damaged products.
5. Unregulated Health Products
Unregulated health products are also not allowed to be advertised on Facebook.
On top of that, they also pose a threat to your business as some of them may even have side effects that you and your customers may not know about.
So instead of being penalized and dealing with legal issues, simply avoid it.
What Are the Most Profitable Dropshipping Niches in 2022?
Although by no means we’re saying, you should stick to these dropshipping niches alone, knowing what’s hot in the market can help you make a more informed decision.
So here are some of the most profitable dropshipping niches in 2022:
1. Cell-Phone Accessories
The Global Mobile Phone Accessories Market is expected to reach 328.69 Billion USD by 2030.
Moreover, a large number of people also impulsively purchase cell phone accessories online.
In short, as long as you focus on the quality of your products – this is one market that you cannot go wrong with.
2. Home Improvement Tools
Nowadays, more and more people are following online home improvement tutorials and working on DIY projects in their pastime.
There’s also a lack of good stores that sell home improvement tools out there. So this is a whole industry that’s waiting to be cashed on for dropshippers.
3. Pet Supplies
According to the National Pet Owners Survey in 2021-2022, around 70% of US households owned a pet and it is expected to grow even more.
So it isn’t surprising why the demand for pet supplies is also at an all-time high.
Whether it’s pet toys, grooming products or pet beds, this niche is certainly worth looking into for dropshippers.
4. Kitchen Supplies
There’s no such thing as “too many” kitchen supplies. Even if you don’t need something right now, the chances are you will need it in the future.
Most people might even make impulsive purchases, and also order in bulk quantity. So dropshipping kitchen supplies might prove to be a highly profitable niche.
5. Game Room Equipment
The U.S video game market is expected to be worth around 51.7 Billion USD in 2022.
And with the numbers only expected to grow, it’s safe to say that this is a good time to jump on the game room equipment bandwagon and start dropshipping it.
Interested in one of the niches on this list and want to dropship it? You can buy products in bulk with NicheDropshipping at the best prices.
The more time you spend brainstorming and researching on a dropshipping niche, the better the results it’s expected to bring.
Although the process can be a bit tricky and lengthy for beginners – the initial grind is more than worth it.
If you’ve already found your dropshipping niche and are looking for a professional sourcing agent to help you scale up your business then our company can guide you with everything you need. So get in touch today!