Essential Guide to Market Research for your Online Dropshipping Business

Sure, everyone is always recommending you to do market research before you pick a niche for your online dropshipping business.

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But what exactly does market research constitute?  

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In this article, we will discuss certain spaces on the internet that you must browse through before deciding on a niche. Your online store should not be left to chance- and choosing a niche should be a deliberate, well-thought decision.

First off, Why should you have a niche-based store, rather than a general store?

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1. The ROI for general stores is usually way lower than for niche centred. This is because when you target a niche market, the quality of leads that you get will be better than when you target a broad audience. This means more conversions, more sales.

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2. Niche ecommerce websites are easier to rank and work better with SEO. People are more likely to search highly focussed terms when hunting for a product to meet their requirement rather than vague general terms. If you have a niche store, you will be able to pop up in google and social searches that pertain to your area of expertise easily.

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3. Lesser competition. When you have a store about say ‘wooden tea coasters’, you only need to compete with other stores selling wooden tea coasters. But once you have a general store, you are competing for every product you sell online with other stores. Additionally, Walmart, Target and other local biggies all have a head start.

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While it may be a little difficult to start selling dropshipping products that are tailored to a niche audience, it is simply better in the long run!

Now, moving on to ‘How to select a dropshipping niche!’ Outlined below are a few channels that will aid you in understanding the market, trends and profitability of potential niches.

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1. Your interests and passions:

The first step is to analyze your own passions and interests: What products do you purchase online and what are your motivations for doing the same? What is one product idea that you often find yourself going back to often- while showering, while lying in bed?

What are some products that you friends and family appreciate?

A product that you are passionate about will make significant difference in the image of your brand.

Make a list of 7 of your interests that would be useful to you from the perspective of an ecommerce entrepreneur.

No successful company- whether we speak about Apple or Amazon- was created in the absence of passion. A deep interest in the product preceded the enormous success of these companies.

For example, have a look at this dropshipping website: Only/Once- which sells vintage pieces of home-decor and timeless electronic items and lamps.

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Their passion is not just visible through their product descriptions, but also through their About Page.

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2. Product Review Blogs:

Now that you have a few ideas floating around in your head about the niche you might select, one has to decide if the ideas are viable.

One valuable resource that will help you decide this is product review blogs. These exist for all sorts of categories from tech blogs to mommy blogs- along with general product review blogs.

Examples:

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The Awesomer : Lamps, fidget spinners, playing cards, luxury items- all are regularly featured on this blog along with articles and informational posts. With a wide number of products, and catering to a broad audience, this blog is perfect to narrow down a niche for your own store.

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Werd : A very clean site that reviews everything from dog kennels to motorbikes- sure to give you a few ideas.

The WiC Project : With a number of low ticket home-centred items reviewed here, this site will help you find products that can be dropshipped with ease.

You can easily check for the traffic these sites receive,the products they feature, the comments and likes on their posts to understand what the audience likes.

The best route would be to find a product review blog that falls in the same niches as the ones you have shortlisted, and then proceed to check the size and potential of the market through the product review blogs.

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3. Product Curation Sites:

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Curated online shopping experiences refer to sites that bring together products from various manufacturers and sellers on one single platform. Usually curation sites are focussed on a certain type of customer persona, which can definitely help an online retailer with a hazy idea about the niche they want to delve into further understand the profit margins on the products in a particular niche, the kind of products that attract buyers and check out new and interesting products!

Some of these sites are:

Thieve : With the best of Aliexpress found here, you can sort out what appeals to you, and the masses with the number of likes a product gets.

Lyst : Fashion products, right from shoes to clothing to help you figure which products sell the best, and what margins you could employ on your store.

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Repick : The best of home decor, along with guidebooks and editorials to get you on track if you have the home decor niche in mind.

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Firebox : Unique, artsy products that are insanely popular can be found here. Inspiration available in plenty.

4. Online Marketplaces:

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Online marketplaces are huge sources for inspiration for finding a niche. With billions of products listed and millions sold every single day, not only can you find  a variety of products in your shortlisted niches, but also have a look at other popular products with customer reviews, bestsellers and trending products.

Some marketplaces to peek at are:

Amazon: The biggest e-commerce site in the world, with huge numbers of ratings and an easy way to track what sells best, is the perfect answer to how to select a niche. However, you want to be wary of selling the exact same products as those on Amazon, especially if you are unable to compete with the price.

eBay: The largest auction site has some interesting products that you can definitely derive inspiration from!

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Etsy: Handmade, local products are always in: from beanies to pillows- there’s a wide range of products to be explored here!

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AliExpress: AliExpress hosts a number of dropship suppliers based in China- with categories from stationery to electronics. AliExpress also allows one to check out the most popular products and categories, which is perfect for anyone trying to understand what product to sell online.

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5. Trend Publications:

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If you want to keep a tab on the current changes in ecommerce that have a significant impact on how your business will perform- you have to keep an eye out for trend publications. What niches are the most likely to perform consistently over the next few years and what products show increasing popularity- these are important questions, and definitely need answering before you select a niche. You can find the answers in such publications!

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Here are some of our personal favourites:

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Trend Watching: This global publication keeps tabs on trends worldwide with regards to consumer products and insights about them. It is a great place to gain exposure on the new products that are being introduced over the world, and how they are fairing.

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Cool Material : If your potential niches involve men’s products, this blog can help you keep up with the latest happenings in the market. This should give you a fair idea on what products to use and how to get the attention of your target audience.

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Trend Hunter : A very concise database of the top trends in multiple industries- a minefield of ideas for online businesses.

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6. Social Media Sites:

Social media sites are where your audience hangs out, and this is where you can observe their behavior patterns. Right from niche sub-reddits on Reddit to Instagram curation accounts and hashtags- social media can lead to interesting ideas.

Apart from the obvious ones, there are also social sites such as Fancy, Pinterest or Wanelo which allow users to create their own wishlists and collections- bringing a great deal of information about your target market to you.

Quora is another place where you can find audiences actively engaging in conversation about products online.

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Of course, Google Trends and Keyword Planner will also help you understand the search volume for certain keywords and aid you in keyword research once you select a niche: which is another important part of starting your online store! Simple Google searches can also yield information about competitors in certain niches: who you can further investigate to understand their status in the industry and if that niche is for you.

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One more way to look at products from a particular niche is to check out Spocket. Its bestsellers are products that are doing well in the market and have huge margins.

Now you are equipped with the knowledge of the places where you can find interesting, valuable information to narrow down on the perfect niche. But how do you know a niche is the right one? What is the criterion for a correct niche- one that brings you sales, and can easily adapt to affiliate marketing (which is the most powerful influencer of sales right now!)?

This we will discuss in our next article: What are the criteria to select the perfect niche?

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