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What Is a Niche?
You need to specialize and focus on a specific product or a specific niche and
focus only on products that fall within your chosen niche. It is simply not
economically viable for a dropshipping business to grab around for products that
catch the eye, or a trend that is popular at the moment.
To determine which niche amongst the nearly countless niches available globally
can be tricky and deciding on one specific niche to specialize in can feel
overpowering for anyone new to the dropshipping business model. We will take
you through the best guidelines that will help you enormously to find the niche
that is right for you.
What Are You Passionate About and Interests You?
Jot down a list of things you feel passionate about, things that interest you
greatly that could be a niche for your dropshipping business. It is important to
choose a niche that you can relate to. You need to understand the product and
sell to customers with confidence knowing that you will be able to advise
customers in a professional manner if they have questions.
If you feel strongly about the niche you choose you will have greater
perseverance and determination to succeed even when problems crop up. If you
really don’t care at all about the products you sell, it will be far easier to quit at
the first bump in the road.
Many dropshipping companies have been started through the hobby of the owner
that turned into a successful business where products are on offer to people who
have similar interests.
Research Is Key to Your Success
It is one thing to be passionate and knowledgeable about the niche you want, but
you are starting a business that must be profitable. To determine if your niche
will create an income stream for you, you must backup your choice with in-
depth research.
Scrutinize the Top Products in Your Niche
Go to websites like Click Bank, Simple Goods, Selify for example and do a
search for the products you want to sell in your dropshipping business. The more
you find your niche products on offer, the better as it shows a demand. Should
you find these websites have none of your niche goods on offer, it shows that
your niche products are not in demand and has not been monetized successfully
by someone else.
Google Tools
Use Google Keyword Planner and Google Trends to search keywords and
keyword combinations relating to your niche. Google tools will provide you with
information about how often your keywords are being searched through search
engines. Google tools have various search options available for you to explore
and determine the demand for your niche products through searches made by
people.
Google Trends analyze trends in online searches being made and tracks changes
in the volume of searches over periods of time. Statistics gathered by Google
Trends show any seasonal trends for the product search terms you used. This
gives you good insight into whether your nice products will have periods of high
demand and at other times during the year slow down, which indicates that
income from your niche products will fluctuate. Google Trends also provide data
on the locations from where searches are made for the keywords pertaining to
your niche products.
Social Media
Social media is very powerful and can be very helpful when you must decide which niche will work best for you. Look on Facebook and check what is being
said about your niche, how people are talking about your niche, and look for
groups and forums.
Shipping Costs
Shipping costs play a big role in your profit margin. If it is too high, your
markup will push your selling prices up too much and prospective customers
will look for cheaper options elsewhere. Low shipping costs can also be used as
a marketing strategy and promotional tool if you can absorb the shipping costs
instead of passing it along with a substantial mark up in price. Free shipping
catches the attention of customers immediately and will lead to an increase in
sales.
Profit Margin
It is very important to keep in mind that the amount of work you put in to sell an
inexpensive product is exactly the same as the effort put in to market high-priced
items. It is therefore worthwhile to look for a niche with high-end products as
this will improve your profit margin overall.
Size and Weight
Too often when deciding to start a dropshipping company, people forget about
the physical size of the products they want to sell, and the weight of the product.
Shipping costs are annoying and everyone tries to avoid it at all costs. This is
very important as you can easily see your profits disappearing like mist if your
chosen niche products incur huge shipping costs.
Legal Marketing
Research the products you want to sell in depth and make very sure that you will
not have any legal issues. You must be able to sell your chosen niche products
anywhere. It is crucial that you are able to sell on online retail platforms, your
own website, and through social media without worries about whether you will get shut down for infringing any state or country laws.
Impulse Buyers
A huge percentage of online shoppers see something they like and they
impulsively buy the item. Online shopping has changed how people shop as they
literally have the world of shopping at their fingertips. When choosing your
niche, you should take this into account and the products you sell should be
appealing to the impulse buyers.
By selling products that appeal to impulse buyers, you immediately broaden
your customer base significantly. Yes, it is true, impulse buyers most often do
not become return customers. When you calculate over a period of time how
much income you generate through this type of sales, you will be surprised at
how much it adds up to.
Personal Interest
When you are really interested in something, your general knowledge of the
subject will be far more extensive in comparison to choosing a niche and
products that you have no interest in and have no knowledge about. Starting your
product search from a strong foundation of interest and knowledge make the
search more productive. You will be able to discard products faster that you are
not passionate about, or products of low quality that will not sell very well.
Professional Experience
Another strategy in the search for the best products to sell is to look at things
from having professional experience with such products. You may not be
passionate about the products, but instead have good knowledge about how it
works and what the pros and cons of the products are. You may have
encountered the products through your own experiences with them, or through
your job. The main thing here is that you will be able to answer questions from customers with confidence and give answers that are knowledgeable and factual.
Another advantage of choosing products from a professional viewpoint is that
you will know where there are gaps in the marketplace and where there is a
definite need for products in that industry.
Trends Versus Fads
Fads come and go, what could be the most popular today and be pushed aside
tomorrow. Your goal is to make money, so to capitalize you must first be able to
separate fad from trend. Fads are gimmicks that are non essentials and easily
forgotten.
When you look at trendy products to add to your niche, ask yourself two
questions. Does this product fulfill a need for people, and does the product solve
a problem for users. A trend fills a need or solves a problem whereas a fad is
interesting or fun for a few weeks or months and then people grow bored and
move onto something else that catch their attention.
What Frustrates and Annoys People?
Research your products by putting yourself in the shoes of a customer. What
annoyances and frustrations do people have that they have to contend with day
in and day out. The criteria is to find products that will make things easier for
customers, and something they would definitely want to buy.
Hobbies and Interest of Others
You do not have to be personally interested in a subject, instead do research into
the hobbies and interests of other people that has a market for the products
related to their interests. The best place to start is by doing a search for hobbies,
top hobbies, or trendy hobbies.
Another place you will find great information is going through hobby
magazines, especially hobbies that have dedicated magazines. Another research
tool is going through social media groups. See what they are talking about, what
they are buying and the jargon used. Note down words specific to a hobby, those
are invaluable search words to use.
Learn about the people who have specific hobbies as everything you learn about
your potential customer base can be used as marketing strategies for products
they are especially interested in.Local Availability
For your dropshipping company to be economically viable, you need to choose
your niche wisely. If your niche products are available freely at local retailers,
people will simply pop out and pick up the items from their nearest shop.
Humans are impatient and will not wait for products to be shipped to them if
they can easily pick it up on their way home from work.
You have access to global markets which broadens your supplier base greatly
and with research you will be able to find a great niche and products that
customers want that they cannot get at local stores.
Check What Your Competition Is Up To
It is easy to fall into the trap of thinking that if there is very little or no
competition for the niche you want, then that is great and you will dominate the
market in your niche. Do some research and see what competition you are up
against because there are usually good reasons why other companies are not
offering these specific products.
The reasons vary from the fact that there simply is no demand for these products
or there is so little profit to be made that other companies moved away from
these items. It may also be that the shipping and packing costs are prohibitive or
that production issues are so problematic that it is not profitable to invest in these
products.
Your need to take all of the above factors into consideration when deciding on
the best niche for you.