How to Choose a Profitable Dropshipping Niche

Dropshipping lets you sell products without managing warehousing and logistics.

The hands-off dropshipping business approach skyrocketed in popularity thanks to the Web. Building a storefront through templates and site editors let entrepreneurs launch in minutes.

But:

The challenge is overcoming information overload when finding a profitable dropshipping niche. The seemingly endless product selection can leave you discombobulated and scattered.

This guide will share how to find and verify those profitable niches. Then, provide a handy list of resources to help maximize the niche products to sell online.

Find a Profitable Dropshipping Niche: The Guide

Dropshipping requires time and money like any other business prospect. Luckily, this business model is on the investment lower-end.

Benefits of a dropshipping business include:

  • Quick setup and agile business structure
  • Low overhead since you don’t buy inventory

So, what does that leave us?

The product idea.

The product(s) influences aspects of site development and content to advertising & marketing. Entrepreneurs lower risks by building off the most profitable dropshipping niches. Then, refining through feedback and data.

Here’s how it all works…

Part 1: Leveraging Knowledge and Placement

What better way to explore a dropshipping business than basing your selection on what you know? By doing so, you have intimate knowledge of the offer including its value and attraction.

You could draw niche inspiration from:

  • Career
  • Hobbies
  • Passions
  • Expertise

Another benefit of using what you know is understanding your audience. Aligning your experience with the business marketing will attract peers. This gives you a position of authority lowering conversion friction.

Brainstorming Dropshipping Ideas

Use pen & paper or a text document to follow along:

  1. Write 10 – 15 general interests you hold
  2. Write 5 – 10 products or brands in each interest
  3. Rate (1 – 10) how well you understand each item

This will provide nearly 100 dropshipping niche ideas.

Need inspiration? Try these sources:

  • Facebook groups
  • Reddit communities
  • Big and niche forums

Sort popular and trending posts on these channels to find insights and discussions. Track mentioned products and compare data to your ideas list.

Part 2: Competitive Research and Market Analysis

Of course, you can skip the brainstorming by using industry and competitor data. This gives a thorough understanding of what’s selling.

Consider these data points:

  • Industry reports
  • Competitor advertising
  • Popular/top sellers lists
  • Reoccurring or viral social shares

Competition typically would not advertise if they’re not making money. A scan of advertising budgets provides a peek at products showing a return on investment. You can lift the data and repurpose it for your dropshipping efforts.

Reverse Engineering the Competition

Again, follow along with pen & paper or text editor while taking notes:

1. Understand the industry with reports and trends

Visit the following sites:

  • IBISWorld
  • Statista
  • Hoovers

Use the search functions to find stats for your intended market. Then, plunk its terms into Google Trends to examine its upward/downward prospect.

2. Scan the competition

Use the following tools:

  • SpyFu
  • SEMRush

Search for main competitors and primary product names. Then, collect and compile ad spend & traffic data. This reveals your true competition and how heavily invested they are in the market.

3. Compare the top sellers

Let lists confirm the data:

  • Amazon top lists
  • eBay bestsellers
  • Wayfair hot products

Use this helpful tool to find and quantify product listings on Amazon. Then, measure the competitor product & content gap. The gaps reveal their profitable selection and missed opportunities.

4. See what’s shared

Flash-in-the-pan products come and go — use:

  • Socialblade
  • Facebook insights
  • Google alerts
  • Buzzsumo
  • Social Mention

These tools track social activity providing share counts and page links. There, you can compare social to the previous three insights. This will also give access to influencers whom you could inquire for niche feedback.

Part 3: Verifying the Dropshipping Niche

The verification process requires extra time and patience. But, prevents you from spending limited resources chasing unprofitable opportunities.

Three ways to verify your dropshipping niches in 2018 include:

  • Small-scale campaigns
  • Mature a site project
  • Buy into the market

Let’s explore each…

Verifying with Campaigns

Verifying with campaigns confirms people will spend money on the product. This gauge interest and projects market potential using real-world data. A small campaign can also reveal positives and negatives with your pricing, placement, and marketing efforts.

Try this:

  1. Create a product landing page
  2. Create and launch a target Facebook ad campaign
  3. Let the campaign run for 2 – 3 days
  4. Track campaign results and earnings

If this campaign showed promise then scale up and keep it running. Or, flesh out the online business idea by expanding the product line and site depth.

If the campaign was lackluster then fulfill your orders. But, remove the product page and stop the campaign. This is marked as a dud letting you move onto the next product to verify.

Verifying with Sites

Drag-and-drop website builders will help create a site in an afternoon. Once launched, you can begin creating content and building buzz on social. This lets the site grow organically without the monetary commitment of advertising.

Try this:

  1. Plan and launch a niche site around your market
  2. Create engaging landing pages, a blog, and product pages
  3. Set product pages as templates or active with affiliate links
  4. Let the site grow and mature with minimal investment
  5. Reassess its potential six months later (e.g. traffic/engagement)

You could stage niche sites for each of your dropshipping ideas. This builds online assets primed to switch to online stores if they show promise.

Verifying with Buy-in

Skip the troubles by buying an established site in your target niche. Sites like Flippa list thousands of niche sites with potential. Consider a site with an existing follower base and respectable traffic stats.

Look for:

  • Information-based niche sites
  • Niche affiliate sites

These two have yet to convert to an online store. Once bought, you can swap links and buttons for a shopping cart using plugins like WooCommerce.

Hands-Off, Money-On: Your Next Steps

This post shared more than a few ways to find a profitable dropshipping niche.

You discovered:

  • Brainstorming techniques
  • Competitive research
  • Reverse engineering

And, how to verify those convictions with real-world data and feedback. Use these strategies to discover those best niches for dropshipping in 2018. Discover the opportunity of combining web development skills with marketing.

Dropshipping creates a lucrative avenue to make money with low overhead. You could scale up through wholesale relationships, too. You have several opportunities to earn when you understand how to pick profitable niches.

So, what’s stopping you? Get started today!