Choosing a niche
A niche is a market segment in which a business specialises. Choosing the right niche in a dropshipping e-commerce business allows you to increase online shop sales, optimise advertising and marketing costs and concentrate your efforts.
Do not spray, it is better to choose a small market that will be within your power. Typically, e-commerce niches can be divided into four categories that are based on: value, hobbies, location, and quality.
In dropshipping, finding a niche is a permanent process. It is necessary to analyze consumer preferences, the level of competition and market changes constantly. Careful study of niches allows us to identify bottlenecks for creating new online projects among already existing unique segments. What should be considered when choosing a niche? Let's sort it out.
Price of goods
By choosing a niche with low-margin products, the dropshipper can check the demand for the product, its quality and the commitment of the supplier. However, it is often more profitable for a dropshipper to sell one expensive product once a month than to spend time and effort selling a dozen inexpensive products, at the same final profit.
Deal cycle
It is more profitable for a dropshipper to sell goods with a short transaction cycle. The period from order placement to payment should be short (1-2 weeks). Deferred payment and long contractual processes are typical for high-margin goods.
Repeat sales
It is worthwhile for a dropshipper to maintain a long-term relationship with a loyal client. Attracting new ones is an expensive and time-consuming process. When choosing a niche, this should be taken into account.
Business growth
Analyse the prospects for the niche. Will it be possible to widen the target audience, increase the reach, expand the range, increase sales? Do you need to look for new suppliers of similar products? After a few orders, it will be clear whether your business will have the opportunity to grow and develop in this niche.
Niche research
Google Trends is a free tool used to check the popularity of a niche. The information is presented in the form of graphs and search queries over the last year. You can see how much a particular niche is in demand, whether its ranking is increasing, stable, or falling.
AMZScout is another valuable niche analysis tool. It is ideal for e-commerce businesses because it analyses the popularity of products on Amazon. You will have access to monthly average sales and trends over the last year for any product you are interested in.
Business ideas
1. do not only research well-known and sought-after products. Be guided by your capabilities, your experience and your preferences. Make a list of what you are interested in.
2. research the popularity of search queries and keywords. Google Ads keyword planner shows how many users and for which queries are searching for products online. Facebook Audience Insights points to markets and trends, providing information on demographics, page popularity, location and activity such as ad clicks for your niche.
3. Browse forums such as Quora, Reddit to know what problems users are facing and what their concerns are.
4. research your competitors, analyse the opportunity to stand out.
Halla Systems. Risk assessment
Keep in mind that popular products or services are highly competitive niches. If you do not have a sufficient marketing budget, you will not make any money in them. Often, entering a narrow product segment becomes the starting point for entering a larger market.
Promoting mass-market products is different from promoting premium products. Each niche has its own consumer, whose habits have long been established.
Halla Systems Co. will help you explore the niche with which you would like to expand your dropshipping business. We will assess the risks, calculate the return on investment, check the counterparties and their connections, develop the structure of logistics networks and take care of supply chain management.