If you’re dropshipping products for the first time, it’s important to decide which items you want to sell. You may be tempted to offer products from as many different categories as you can, with the idea that a wider variety leads to more conversions. In reality, though, a chaotic collection of product lines can cause shopper confusion and lost sales.
Let’s say a new pet owner lands on your website while looking for leashes. She assumes she’ll find pet toys and collars here, too, but instead sees that you sell electronics and perfume. She’s confused by the mix of products that are irrelevant to each other, and isn’t sure if your website is the most authoritative place to buy quality pet supplies. Deciding that she won’t find everything she needs in one place, she navigates away.
See what we mean? Unless you’re Amazon, you can't rank well for every product. You’ll have much more success if you focus on finding a good product niche.
What is a niche, and how do I choose one?
A “niche” is a subset of the market that appeals to a specific group of consumers with specific purchasing needs. Those needs can include a type of product, the solutions it provides, and even the price point and production quality. In the dropshipping world, your product niche is a focused product subcategory (or group of subcategories).
When you market more effectively, you’ll end up spending less money on advertising and reap a higher return on investment.
When marketing your business, it’s important to know who you’re trying to sell to. If you make a conscious decision to sell products that interest a specific set of consumers — say, expectant mothers or backpacking enthusiasts — you’ll be able to use your marketing dollars to target a much smaller section of the population. When you market more effectively, you’ll end up spending less money on advertising and reap a higher return on investment. Most importantly, you’ll reach the exact type of person who already wants to buy your products.
There are plenty of existing product niches you can compete within, but you can also combine or overlap niches to carve out your own space in the market. As with most aspects of ecommerce, there’s a strategy behind this decision. Here are a few ways to find your niche:
Use Amazon Autofill
In case you hadn’t heard, a lot of people use Amazon when searching for things to buy online. Because Amazon has such a high search volume, their algorithms are very good at helping people find what they want. To see what we mean, go to Amazon’s website and start typing in a search term. As you type, you’ll see a list of autofill options appear. These suggestions are generated from commonly searched terms and ranked by popularity, making it a reliable way to find a solid niche:
Select for Profit Margin
If you weren’t inspired by any of the product terms you searched for on Amazon, try using the following guidelines to nail a successful first-run dropshipping strategy. You can always tweak your product lines in the future.
It’s always easier to get sales from small-ticket items that don’t break the bank. Choosing products around $50 or less increases the likelihood of impulse purchases without buyer’s remorse. You’ll see a higher conversion rate among shoppers who are interested enough in your products that they visit your store to learn more.
Low cost doesn’t necessarily mean “cheap”.
Low cost doesn’t necessarily mean “cheap," and that’s an important distinction. You should still look for well-made products, since what your customers receive in the mail will reflect on your business.
Selling big-ticket items can work out well if you’ve chosen a popular niche, but keep in mind that higher cost items have longer sales cycles. Potential buyers tend to consider their purchases more thoroughly and may need to save money before buying. A longer lead time leaves more room for shoppers to forget that they saw the item on your website versus another.
Small and Light
To increase profitability, try to find products that allow you to minimize shipping costs. Even though your products are being dropshipped, you’ll need to pay for the actual transit of the item in some way. Unexpectedly high shipping costs can deter a potential customer from making a purchase at the last minute. The easiest way to control the shipping costs a customer pays is to stick with items that are small and light in weight.
The most important consideration: choose products that are already enjoying moderate popularity and sales. You may find a product line that fits the niche you chose, but if it isn’t already popular, you could end up investing large sums into awareness marketing campaigns with little return on your investment. Try to find a product that you can realistically sell at least five of per day.
If a product is so popular that the competition is particularly fierce, you may end up competing with larger companies that sell thousands of units for prices significantly lower than yours.
This advice goes both ways: if a product is so popular that the competition is particularly fierce, you may end up competing with larger companies that sell thousands of units for prices significantly lower than yours. The key is to find products that are already moderately popular, but not so popular that the market is oversaturated. Look for a balance between high sales volume and relatively limited competition.
Okay, I get it. Now show me the niches!
There’s a good chance that you’ve recently bought something from our recommended dropship niches, since they correspond to major trending ecommerce categories:
- Health & Beauty
The best thing about these niches is that they can overlap in many ways, so your product lines can straddle multiple categories and combine to create your own, unique niche. Let’s take a deeper look at how you can make that happen!
Babies: Baby Care Products, Apparel, Toys
The birth of new babies is a guaranteed constant in the marketplace, and new parents need lots of supplies. You can sell big-ticket items like strollers, swings, cribs, and rockers, or you can go for the small items that require repurchasing: clothing, teething toys, shampoo, sunscreen, diapers, and more.
Repurchase Rate: High for small items, low for large items
Cross-niche Opportunities: Travel, Natural/Organic
Examples: Travel diaper bags, FAA-approved folding strollers, easy-fill 3 oz. bottles, all-natural baby wipes, toys made from recycled materials, cloth diapers
Health & Beauty: Makeup, Skin Care, Toiletries
This is quite a wide niche, which means there are plenty of sub-niches to choose from. Men’s grooming is a quickly growing segment, from beard balm to specially formulated shampoos. In women’s beauty, Korean skin care is all the rage. You even can set yourself apart by selling cruelty-free cosmetics and creams.
Repurchase Rate: High
Cross-niche Opportunities: Natural/Organic, Hobbies, Travel
Examples: Subscription beauty boxes with all-natural cosmetics, essential oil skin-soothing beard conditioner, DIY perfume kits, travel containers and atomizers
Hobbies: Tech Toys, Backpacking, Video Blogging, Pottery
Leisure time is precious, and today’s shoppers are always looking for fun new ways to fill it. Some hobby niches call for large purchases up front (think 3D printers for prototyping, or tripods and microphones for vlogging), but you can also make a lot of sales through repurchases of raw materials (plastic filaments, lighting fixtures, sculpting tools).
Repurchase Rate: High for small items, Low to Medium for expensive items
Cross-niche Opportunities: Travel, Natural / Organic
Examples: water-purifying straws for backpackers, solar powered electronics, head cams for vloggers, natural color tints and glazes for ceramics
Pets: Treats, Toys, Carriers, Grooming
Pets are often extensions of their owners, so it goes without saying that they deserve the best! Pet owners are interested in products that are healthy, premium and unique. You can dropship gourmet treats, eco-friendly litter, top-of-line grooming supplies and stylish wearables. Consider offering customizable products, and your pet-loving customers will be in heaven!
Repurchase Rate: High
Cross-niche Opportunities: Natural/Organic, Travel
Examples: Raw pet treats and foods, all-natural deodorizers, travel food and water bowls, pet carriers (FAA approved, seat belt compatible)
Natural/Organic: Health Foods, Vitamins, Household Products
The eco-friendly movement is bigger than ever, and not just for your household. Along with naturally-derived cleaning solutions and recyclable kitchen products, you’ll also find plenty of dropshipping opportunities for natural foods and ingredients. Healthy snacks, wellness teas, smoothie mix-ins and vitamins are all big sellers. Be sure to source responsibly and refrain from questionable ingredients, as the shoppers in this niche are sticklers for truth in labeling.
Repurchase Rate: High
Cross-niche Opportunities: Babies, Health & Beauty, Pets
Examples: Organic baby foods and snacks, vitamin-infused skin creams, eco-friendly pet stain removers, biodegradable pet bags
Travel: Portable Tech Accessories, Organizers, Apparel
The travel niche spans anything from road trip needs to backpacking supplies to international interests, and includes both families and individuals in its target demographic. Car organization accessories, coolers, foreign language books, air travel-friendly containers, neck pillows and a wide variety of other products appeal to the modern traveler. You can even put a “travel size” or “travel friendly” spin on any other common niche product.
Repurchase Rate: Medium
Cross-niche Opportunities: Hobbies, Babies, Health & Beauty
Examples: Portable bluetooth speakers and alarm clocks, travel dishware and food storage, baby backpack carriers, pop-up cribs, travel size skin care and cosmetics, doppel bag
Bonus Niche: Quirky Stationery Items
We threw this one in for fun! It meets all three of our “profitability” considerations and is an easy entry niche. Think fancy pens, unique erasers, themed notepads and sticky notes, fun socks, journals and planners, enamel pins and decorative magnets. These items are great for stocking stuffers, party favors and impulse purchases. Already have your niche? A few on-theme items from this product category never hurt!
Repurchase Rate: Medium
Cross-niche Opportunities: Any!
Have any other questions about dropshipping niche products? Let us know in the comments!