What's a niche in dropshipping

Dropshipping: How to Find the Right Niche

Dropshipping is a promising business model - but not a sure-fire success. The right product range strategy is essential.

In contrast to serving mass markets, the Trading in a market niche has extensive advantages. In our article we will show you the most important factors to consider when choosing products.

What is a niche market?

A niche market is a (sub) part of an overall market in which customer demand is not fully satisfied and has not yet been fully developed by competitors.

These niches are particularly attractive for e-commerce beginners, as they have the opportunity to exploit this market for themselves.

In contrast to already heavily occupied mass markets, a niche market offers a stepping stone. Not only is it easier to get started, but the trading structures, strategies and pricing policies of the manageable competition can be analyzed in detail. A good positioning is a lot easier than in the mass market.

In addition, your competition is often smaller providers, between whom, for example, the price war is less pronounced than in a mass market. For you as a retailer, this is associated with higher profit margins. It is also easier to set up a range in line with the market, because target groups and their needs can be identified and taken into account more easily.

But how do you find the right niche?

Competition and profit margin

Indispensable in the beginning: Carry out a thorough competitive analysis. Take a close look at products that you are considering offering yourself.

Once you've gathered your results, the real part of the work begins. Are you able to offer a price similar to your competition and get a positive profit margin? If it doesn't, remove the product from your list.

Become an expert in your niche

When choosing a niche, it is advisable to fall back on a product group with which you are already familiar or in which you may be personally interested. If you still have little knowledge of your chosen niche, you should become an expert on these products and analyze them in detail. But it's not about marketing your own taste. Therefore, pay attention to a balance between interest and profit potential.

Only in this way can you exude credibility and trust to your customers. This is especially beneficial if you sell them through your own shop and not on marketplaces. In the long run, you will be most successful when you work with attractive products and topics that interest and motivate you.

Tip: It pays to test the products you want to sell yourself beforehand. In this way you can learn a lot about your products and choose those that meet your minimum standards. In addition, testing can give you valuable information for your description in the shop, which can be an important advantage over your competition.

Keep an eye on trends

Being in the right place at the right time can be the difference between success and failure in dropshipping. When selling products in the same category, competition is fierce. Every vendor tries to be the first to bring a product to market in order to secure important competitive advantages.

But which products that are not yet on the market are trendy? The first point of contact is, for example, a research via Google Trends or other trend forums and websites.

With Google Trends, just click on the menu at the top left and then on “Explore”. Change the “Worldwide” menu to “Germany”. Next, a time period can be set in order to discover and understand current and emerging trends. Categories and sub-categories can be defined according to your niche and the strongest keywords and trends can be determined in the table under the item "Related Searches" at the top right on "Increasing".

Tip: Note that just because an increased value is now displayed, there is still no trend for the respective product or product type. It is important to keep an eye on the seasonality: is the product more seasonal (e.g. snow shovel), semi-seasonal (e.g. outdoor clothing) or trendy (e.g. sustainable clothing)?

Google and the niche market

Just like you probably do privately, most buyers begin product research using a search engine such as Google. There you will usually find your favorites for a purchase under the first search results that are displayed to you. The top priority for you as a beginner is that your product appears as high up as possible. Here, too, the probability of achieving a good ranking is higher if the number of competitors is rather manageable.

Although a good Google ranking is generally easier to achieve in niche areas than in mass markets, your product pages should still be search engine optimized. Therefore, carry out a keyword research that contains the most important search terms and phrases for your product area and apply this primarily to your product texts. In this way, search engines like Google can better assess how relevant your information and offers are for interested parties and place your shop accordingly.

Tip: One or two search terms are sufficient per product page, if a keyword occurs unnaturally often, this will be penalized by the search engines. Do not only use internal measures, but also use link building, for example, to attract buyers.

Learn more about dropshipping

Selling online with no warehouse, no shipping, no equity? This is possible with dropshipping! The model can be used optimally for your business if you rely on these three success factors. However, especially for beginners, there are some typical stumbling blocks and sources of error in online trading with dropshipping, which traders should deal with in order to be successful in the long term.

With dropshipping, you as a shop provider can offer items in your shop without having a warehouse yourself. Because your supplier takes care of shipping to your customer. Find out which criteria are used to find the right supplier for your shop.