Most importantly, you get to make money without doing a lot of heavy lifting, as the stocking and shipping aspects of your retail business are handled by third parties.
Before you get your business up and running, you’ll need to pick a product niche. Although it might sound like a good idea to sell anything and everything, your online store will be much more successful if you are more specific and selective in the items you choose to sell. So how do you go about choosing a niche?
What kind of products will bring buyers to your website? How do you keep them coming back for more? Use this handy guide to start researching the perfect product niche to make your business boom.
1) Think about what interests you.
The items you sell don’t necessarily have to interest you, but if you’re already knowledgeable about the industry you’ll be selling in, you’ll be one step ahead in the sales game. Definitely choose something you’re familiar with or would like to learn more about. As you build your store, you have to be able to convey what’s great about your products—and you need to sound authentic.
2) Let your niche be a problem-solver.
Often, when people have problems, they search for products to help solve them. The problem might be a cluttered house and the fix is bins, shelves and other organizing solutions. As much as people love them, pets can be the source of many problems that send people online to search for relief. Chew toys, dog accessories and potty-training tools help pet owners resolve many of their issues. Whether it’s health-related, work-related or has something to do with cooking, cleaning or an activity around the home, think of a problem you’ve had and the kinds of products that you looked for as a remedy.
3) Hobbies make great niches, too.
If you have a hobby or know someone who does, you’re aware that people’s pastimes can grow quite expensive. No matter the passion, hobbies usually require assorted equipment and paraphernalia. This could mean yoga mats, Pilates balls and water battles for health aficionados or waders, lures and line for fans of fishing. Since you’re hopefully thinking about a niche that interests you, perhaps you could turn your own hobby into a business opportunity!
4) Choose based on consumer need—not novelty.
If you jump on the bandwagon of the latest tech device or accessory, you’ll likely have an initial flood of customers that will slow to a trickle once the newness wears off. It’s best to choose items that customers will consistently purchase. For this reason, seasonal niches that are based on specific holidays are really tough, as well. What product do people always need? Let this guide your brainstorming.
5) Go online to get ideas.
If you’re completely stuck, turn to the internet to get the creative juices flowing. Check Alibaba to see a huge array of categories and products that could be the perfect fit for your business. When searching on Alibaba, narrow your search to only include products provided by “Gold Suppliers” to ensure that you’ll be working with reputable suppliers and high-quality products. An Alibaba search is a great way to get an idea of prices for potential products, which brings us to the next step…
6) Keep a target price in mind.
As you’re researching products in your niche, you may wonder if it’s worth selling inexpensive items or if customers will spring for high-dollar items from your store. An ideal price for online products is between $10 and $200. Stores that carry items under $10 struggle to sell enough of them to make it worthwhile, while it takes a pretty large initial investment to carry big ticket merchandise.
You can always branch out later if you feel there is a need to carry a more pricey selection. You’ll want to sell items at a 100% markup, so look for products that can turn that kind of margin.
7) Narrow things down.
Check the data on all the products you’re considering and only feature the best-selling ones. While you want to provide your customers with variety, you also need to avoid overwhelming your store with a clutter of products. It’s better to have one product that sells like crazy than to have ten products that have mediocre sales. Choose carefully.
8) Choose items with multiple suppliers.
This can help you quickly juggle and fulfill customer orders if a popular item is backordered with one supplier but available from another. Customers don’t care why they can’t get their item right away; they just want it as quickly as possible. Using multiple suppliers will help you fulfill orders more quickly and will really help set you apart from the competition.
9) Contact potential suppliers.
One of the last steps in choosing a niche will be to contact suppliers. Tell them who you are, what and where your company is and let them know what items you need. Request prices for all items, as well as any additional information you need about shipping and payment. You can use the same message for each supplier. If they don’t reply in a timely manner (about 24 hours), it’s best to mark them off the list and move on.
10) Choose your niche and know your stuff.
Once you’ve chosen your products, your suppliers and your niche, the real work begins. The more you know about your products, the better you’ll be able to describe and promote them on your website. It also demonstrates authenticity and professionalism if you’re able to thoroughly answer questions if a customer contacts you about a product. If you’re not familiar with a particular item that you’d like to carry, purchase one for yourself so that you can actually put your hands on it and learn more about it. You can always sell it at a discount as a “refurbished” item to recoup your cost.
Good luck and happy selling! Go forward boldly—the world of dropshipping awaits you!