Being able to sell products online that you are passionate about is one of the main reasons entrepreneurs start dropshipping businesses. With low risk, high reward and a truly enormous product selection, dropshipping is a business that allows you to sell your passion.
Being passionate about a niche of products helps overcome the obstacles associated with starting a dropshipping business. Even if you are not passionate about a product or niche, it's almost as good to be knowledgeable about a product or niche.
These factors present a huge advantage when branding a store, writing product descriptions and marketing. If you are knowledgeable about a niche, you'll know which audience to target on Facebook, the right type of ads to run, the correct branding to use on your store and the exact products that are currently in demand.
The question is, however, how can you find products that are right for you to sell online?
The Fatal Mistake Beginner Entrepreneurs Make During Product Research
When initially searching for products, many beginners are attracted by mainstream best sellers that have nothing to do with their interests or passions. They'll see stores doing well selling posture correctors, or watermelon slicers, and think "Wow, that's a great product to sell".
Thus beginners may catch Shiny Object Syndrome, in which they will bounce from one "trendy" product that "seems like it will sell well" to another. In most dropshipping groups, in most dropshipping videos, entrepreneurs mention big selling, novel products and forget about niche specific products. It makes sense - gurus and coaches want to offer general advice that can apply to everyone.
The main thing these guidelines are missing is that only you know what you're passionate about. Whether its cars, streetwear, cosmetics, jewelery - you, as the business owner, will have knowledge and ideas about what you want to sell.
Finding The Perfect Niche & Getting Inspired
One of the best ways to achieve this is to start broad and general, and then zoom into the niches you're the most interested in. This will allow you to hit the bullseye within your niche - you will find the exact product categories that are important to you.
Though there are many ways to do this, one of the best ways is SaleSource's Best Sellers By Niche section, which allows you to drill down with laser focus into a group of vetted products with no duplicates and no bad suppliers. In the above example, a category that sticks out to us is Home, Garden & Pets - particularly the Pets subcategory.
Already, we can see that some of the top sellers in this category are pet products, with the cat bed being the 3rd best seller in the entire category. The golden trophy next to the name of each category signifies a winning category, where a large concentration of "winning products" (a product with the potential to sell exceptionally well) are available. At this point, we've decided we want to make a pet store, so we will further investigate the products that are available within this subcategory.
We are now able to see a large amount of best selling products in the Pet Products niche. This is great for inspiration and ideas for the main best sellers on your pet store, but in reality you will also need to upload many products from different subcategories in order to create collections that make sense on your dropshipping store.
Not only does categorising everything make it easy for buyers to find what they're looking for, it makes your store look more legitimate, like a large department store.
As we can see, there are hundreds of sub-categories to choose from. We can take a look at the category of cat grooming, and see if the products there are suitable for a collection on the store.
These products are very useful for those interested in cat grooming, and if you have cats you'll have a good idea of whether or not you would buy the products in this category, which will help when choosing which products to import into your store.
The Million Dollar Question - Niche Store vs General Store?
We've just spoke about how to find products in a niche you are passionate about - but how exactly can we take a look at the top dropshipping stores within this niche niche? Using SaleSource's Top Stores feature, we found Meowingtons, a top dropshipping store estimated to be making $411,000 - $800,000 per month.
Meowingtons have been open for 6 years, giving them a huge head start, however it just goes to show that with time, hard work and dedication anything is possible. Meowingtons started as a dropshipping store - their top selling product is a dropshipping product, as we found out with the SaleSource Store Analyzer.
However, they have since transitioned to the print on demand and wholesale model, which seems to be working even better from a brand perspective.
The benefits of a niche store include:
- Easier to turn into a brand than a general store
- Extra trustworthiness from customers due to brand authority
- Lower return & refund rate
- Ability to more easily transition away from dropshipping to wholesale
- Ability to charge higher prices on the strength of the brand
- Hide in plain sight - if store is well done, inexperienced dropshippers will be unable to tell you are dropshipping
- Less products that you can test and sell
- More research required to find products that fit your brand
The flip side of the coin is a General Store, such as WowStamp. Their best sellers are seemingly "random" products, and all general stores brand themselves similarly - a large gift shop with many options, great deals and problem solving products.
- Enormous product choice
- Large overall audience
- Possible revenue theoretically higher due to ability to list many winners
- Exremely high competition
- Categorising, sorting and keeping track of products is very difficult
- Lack of focus can lead to lack of sales
What To Look For In Potential Niches / Products
Products that have the potential to go viral generally have associated video footage or imagery that can go viral. A good example is the Night Sky Projector, which in the early days of dropshipping went viral just with a single image ad. Similarly, there are products like the Watermelon Slicer and talking Hamster that sold well due to the viral ads created from footage of the products.
High Markup Potential
A product with low markup potential is a product that is less profitable - for example, selling a t-shirt that costs $15 to source for $25. Since the markup is so low, there is very little money left over to spend on advertising, scaling and other business costs.
Jewelery is great example of a product category with a very high markup potential. Due to its high perceived value, it is possible to sell jewelery, like a ring, that costs $2 to source on AliExpress for upwards of $40 - a 20x markup! Popular watch brand MVMT watches sells watches they source on AliExpress for approximately a $3 unit cost for well over $100 - talk about great branding.
Solves A Problem
A product that solves a problem is an easy sell - if a customer has that problem (for example, poor posture), they then buy the posture corrector, if marketed correctly. This is the simplest way to close a sale, because it does not have to be brand related - for example, if a posture corrector solves my problem, it does not always matter who I buy it from.
This is the reason many general stores can succeed with poor branding, as long as they're selling products that provide solutions to the problems that people have. Of course, the ideal solution here is to have powerful branding as well as great problem solving products.
Dropshipping Niches To Avoid
Easily Damaged Products
Selling products that can be damaged during transporation, such as glass products, porcelain products, is certainly not a good idea. Since delivery can take a long time, the chance of product damage is increased.
If the product arrives to the customer damaged, not only do you risk customer disatisfaction, but also a large increase in returns & refund requests as well as negative reviews.
Large and Heavy Products
In most cases, large and heavy goods are difficult to dropship due to the prohibitively high shipping costs around the world.
Sex Toys & Adult Goods
It goes without saying that you will struggle to find large platforms that will allow you to advertise these kinds of products. They go against Facebooks Advertising policies, many of Googles advertising policies and can be a nightmare to get through customs.
Legally Challenging Goods
Any goods that could result in legal issues in the country the product is arriving in. Examples include knives, airsoft rifles, drug paraphanelia and goods that infringe copyright. For more information, see our article on the Legality of dropshipping.
While dropshipping can have its challenges, it becomes much more enjoyable when you are selling products you are passionate and knowledgeable about. We hope this article has helped you with finding products to sell on Shopify, and if it has, we encourage you to share it with other dropshippers.