Thanks to the power of dropshipping, just about anyone can get into ecommerce.
You don't have to worry about inventory, shipping, logistics, or anything like that.
But before you start dropshipping, you need to figure out exactly what you're going to sell.
That's one of the hardest parts.
No one can spoonfeed you the perfect niche, and you have to figure that out on your own.
The niches to go for are the ones that have a pretty sizable audience, but that aren't so competitive that you wouldn't stand a chance.
Usually, this involves narrowing things down from a broader topic.
In a recent post, A Better Lemonade Stand explains how to find a profitable niche for dropshipping.
I can picture you right now: all pumped up with lots of energy, ready to start your first e-commerce company.
That’s great, you’ll need to keep up that energy, but now’s the time to do all the hard work and research.
Yes, it’s boring but it’s also extremely important if you want to succeed.
Because you don’t want to spend the next week working on a new business only to find out there’s no market for it, or there’s too competitive of a market for it.
Conduct research so you can find the right mix of “passionate niche” and “competitiveness” for your new business to thrive and succeed.
STEP 1: BRAINSTORM NICHE IDEAS
You can’t expect to start a successful drop shipping business by competing with sites like Amazon or Zappos, so your best chance for success is to focus on providing to a niche market.
It’s much easier to start and attract customers to your new business by catering to a smaller subset of people like crossfitters, knitters, or novelty sock wearers because you can tailor your business to meet their specific needs.
Start brainstorming hobbies you’re either interested in, have heard of, or know family or friends practice. Come up with at least 10 ideas of small, passionate communities that you could potentially cater to.
You don’t need to know the ins and outs of how you’ll service these niches, we’re just looking to generate some ideas.
Here are some examples:
- Mixed Martial Arts (MMA)
- Ketogenic Diets
- Body Weight Fitness
- Novelty Socks
- Performance Clothing
- Travel Backpacks
- Roller Derby
If you get stuck, this article can help you out.
Now that you’ve brainstormed some ideas it’s time to put them to the test.Tip: Try to brainstorm ideas that interest you because if one of them turns out to be a viable business venture you’ll be more likely to be successful if it’s something you’re passionate about.
STEP 2: CONDUCT A GOOGLE KEYWORD PLANNER SEARCH
Google Keyword Planner is a tool that enables you to see how many searches any given keyword receives per month.
Even though this tool is mostly used by SEOs and Google Adwords specialists, the Google Keyword Planner tool is a great way to find what your potential customers are searching for online.
At this point in time the information you’re looking to find is how many people are searching for a given keyword each month and what the suggested bid is.
These numbers will tell you how popular and profitable that keyword is.
Based on these results I can understand:
- The only keyword that directly relates to products for this given keyword, “body weight equipment”, only has 110 monthly searches, showing a low demand for this niche
- It’s still quite profitable, given the high bids
- One of the best ways to monetize this niche would be to create informational products or promote affiliate products that teach body weight exercises.
All in all, this isn’t a good niche to focus on.
Based on these results I can understand:
- There isn’t a lot of interest for the specific keyword “performance clothing”, however, there is for “sports clothing” and “activewear” (which suggests I should reconsider my target keyword)
- It’s not crazy competitive due to its medium to low bids
- There is a lot of interest in active wear for women.
This would be a lucrative niche to consider.
For “travel backpacks”, I have found these keywords:
Based on these results I can understand:
- There is a lot of interest for the chosen keyword
- There is a lot of interest for travel-related backpacks, like “laptop backpacks”, “waterproof backpacks”, “rolling backpacks”, and so on
- It’s not that competitive, due to its medium to low bids
Because of this, this is a great niche to consider.
STEP 3: CONDUCT AN AMAZON SEARCH
Just like the Google Keyword Planner tool is a valuable way to understand what customers are searching for each month, Amazon can show you what they are buying.
If customers aren’t purchasing your niche product from Amazon, it’s likely that there isn’t a demand and it isn’t worthwhile to pursue.
Even though I searched for “workout clothes” in the “All” category on Amazon, all the results are women’s active wear apparel. This tells us that the demand for this niche is overwhelmingly specific to women’s workout clothing.
You can see that a lot of the keywords that I showed you before, like “hiking backpack” and “waterproof backpack”, show up in the results for Amazon.
This confirms what the Google Keyword Planner tool already told us.
What we’ve learned from Amazon is that there is demand for both of these niches, and it has informed us how we can focus into each niche even further.
STEP 4: RESEARCH SOCIAL MEDIA PLATFORMS (REDDIT, FACEBOOK & YOUTUBE)
Finally, you need insight into how your potential customers are engaging with your niche on social media platforms.
Choose whichever platforms your potential customers are most active on, but for this example we’ve narrowed it down to Reddit, Facebook and Youtube.
Reddit is one of the best social networks to conduct research on because it has lots of passionate groups of people sharing common interests and hobbies.
This can be a goldmine for you.
The users of Reddit subscribe to specific categories known as “subreddits” which are basically like niche markets on a smaller scale.
Search the subreddits to find the one that it most relevant to your niche. In our case, we selected the “Fitness” subreddit for our workout clothes, and the “travel” subreddit for our travel backpacks.
Using these subreddits we’ll be able to get a glimpse into the workings of the niche market, what our potential customers talk about, how they talk about it and what they’re interested in.
If there aren’t any relevant subreddits for your niche, then perhaps there isn’t a viable market for it. However, if your niche is new and upcoming this could be your chance to share it with the world of Reddit by creating a subreddit for it.
Use Facebook to find out if your niche already has an established marketplace to find brands and influencers that are engaging with people who can become your future customers.
If you understand your niche you’ll know exactly which brands and influencers to look for, but if you’re unfamiliar with your niche, you’ll have to do some searching. Look for brands that fit into your niche and are actively providing value to their audience.
Find out how they engage with their audience, what products are they offering, what promises do they offer their customers, are they focused on quality or price and how do their fans respond to them?
This will give you clues as to what works and what doesn’t when you’re engaging with your niche audience.
Popular brands & influencers for the workout clothing niche we can use to conduct research on niche activity and engagement:
- Lululemon: A workout wear clothing brand with over 1,500,000 followers.
- Kayla Itsines: A workout instructor & influencer with over 8,000,000 followers.
- Girls Gone Strong: A health & fitness organization with over 213,000 followers.
- Health and Fitness Chick: A health & fitness influencer with over 82,000 followers.
Popular brands & influencers for the “travel backpacks” niche we can use to conduct research on niche activity and engagement:
- Herschel Supply Co: A travel & urban backpack & luggage brand with over 500,000 followers.
- Jack Morris: Travel influencer with over 9,000 followers.
- NomadList: A directory of the best cities to work & live for digital nomads with over 9,000 followers.
- Startuptravels: A community of entrepreneurs & travellers with over 7,000 followers.
- Location Rebel: An entrepreneur & travel influencer with over 8,000 followers.
Finally, YouTube can help you find relevant videos about your niche.
Look for tutorials, product reviews and relevant channels to find influencers who are engaging with your ideal audience and see what they have to say.
Just like Facebook, Youtube will give you insight into your niche as far as what customers are buying, saying and promoting.
For instance, when searching for “travel backpacks”, I found Kristen Sarah who is a traveler who uploads reviews of travel-related products, including backpacks.
Her channel has over 88k subscribers, and the specific video I found had 35k views, and over 800 likes. These statistics are quite good for this niche.
STEP 5: DECIDE ON A NICHE
At this point, in order to continue building your business, you need to decide on a niche. It’s not an easy choice, as it can make or break your business, but you need to select one niche market to continue to focus on.
Make your choice using a mixture of intuition, passion and data.
Using the previous examples we found two niches that could work: workout clothes for women and travel backpacks for nomads.
The data for the former proved to be more popular than the latter, but I have a bigger passion for the latter, so I will continue with the travel backpacks.
You can learn more about how to start your first dropshipping business over at A Better Lemonade Stand.