Published on December 13th, 2018 | by Sunit Nandi

How to Find the Right Product Niche for Your Dropshipping Business

If you are dabbling in dropshipping business (or is still planning about it), you will understand that there are four Ps that become the core of your business. They are Product, Place, Price, and Promotion.

These four mix have to be fulfilled if you want your dropshipping business to grow. Of course, it’s not going to be done in a blink of eye, but it’s not difficult to learn about them as well.

We’re going to help you understand the four mix and show you tips about choosing and implementing them.

So, without further ado, let’s talk about the first P: Product.

The Importance of Product

There’s no denying that product is the spotlight of your business. To illustrate how important a product for your business, remember that your store will be described by the product it sells, and not the other P. For example, if you sell apparels, your business will be described as ‘clothing store’, and not ‘modern, cozy store’ or ‘cheap store’.

So, you need to carefully select what kind of product you want to sell in your store. Not any product can do. It depends on a lot of thing, from demand to profitability.

But, don’t be alarmed. We’re going to help you choose a right product niche for your dropshipping business.

Below, we’ve listed some criteria for you to consider when choosing a product niche.

1. Your interest and expertise

What does your interest and expertise have anything to do with dropshipping? After all, you aren’t the one who make the product, and not even the one who’ll handle the packaging and shipping either. Are interest and expertise sill necessary?

The answer is yes. Although you can still do your dropshipping business without interest and expertise about the product you sell, having both attribute will make running the business easier.

If you’re an expert, or at least interested in the product, you’ll have better eyes at spotting pattern and predict new trend. This is useful when you are sending out catalogue for your customers via email, or choosing which product to display in the advertisement.

It also helps you a lot if your customers ask for your recommendation about the product. Customers love knowledgeable store owners. It can increase both your consumer loyalty and your store’s credibility.

2. The potential market size

The first thing you should consider is to how many people you can sell your product to.

Not every product is the same. Some products are needed by everybody, from all genders, no matter where or how old, like food or snack. Some products are needed mostly one by women (make up, female hygiene products), and some are only needed by people with certain hobby (fishing kit, gardening kit, knitting kit).

Of course, the less general your product is, the more chance you will sell more product. So, it’s important to choose a product that has a sizeable market, especially if it is your first try at e-commerce business.

However, remember that other businessmen will also think the same, which brings us to our third criteria to consider, which is: competition.

3. The density and competitive level of competitor

A sizeable market usually comes with quite a number of competitors too. It’s normal. If it’s a big bread, many people would want to bite.

Don’t let the number deter you. More than the numbers of competitors, you need to pay attention to how many of them you can win over.

So, choose to sell a product not based on how many competitors you have in the market, but choose it based on how many competitors you can beat.

Organic foods, for example, is a pretty specific market with less competitors, but after research you find out that most of the store owners are big healthy food enthusiast, and have a rather close bond with their customers.

Meanwhile, snacks are more general, and while it has many competitors, the customers are less fanatic about the store. They don’t mind to change shop, as long as the products offered have many varieties and cheap.

Unless you have interest and expertise in healthy food, choosing snacks is a better option.

4. The fanaticism and maintenance level of the customers

We’ve showed about it briefly in the last point: how you should consider a certain product customers’ behavior when choosing what to sell.

Some products have pretty fanatic fans who are willing to spend thousands of dollars to get what they want. This is usually true for hobbyist.

These fans usually needs your attention more than the others. They are knowledgeable about the products, so you’ll have to be willing to respond to any of their inquiry.

You’ll spend more effort to take care of these customers, but they are usually loyal and generous.

Meanwhile, some other products have more casual fans who are just concerned about price or variability. This is usually staples product like groceries and apparels.

These customers already know what product they want, along with its strength and weakness. They just need you to process their order as fast as possible.

These customers are of course easier to maintain. But, they’re prone to change loyalty easily if they find another store with faster processing or cheaper price.

So, that’s it, several things to consider when you’re choosing product niche to sell in your dropshipping business.

Now that you know already what to sell, it’s time for you to go to the next P, Place.

Place is also one of the important mix of a successful business. In dropshipping, remember that your Place is your web store.

Creating a dropshipping web store, while important, is not difficult. Of course, there are elements you have to put on the web store to attract more customers. We’re going to address that in the next article.

Or, you can just choose dropshopping solution like Ali2Woo for setting up a professional looking dropshopping web store. Ali2Woo plugin provides flexible solution for all your dropshopping business needs. Even if you are a novice, its built-in features lets you build a modern looking dropshopping store.

So, are you ready for the next P?

Tags: dropshipping, find, how to, niche, product

About the Author

Sunit Nandi I'm the leader of Techno FAQ. Also an engineering college student with immense interest in science and technology. Other interests include literature, coin collecting, gardening and photography. Always wish to live life like there's no tomorrow.