How to Choose a Niche for Your Dropshipping Store
Have you ever wanted to learn the entire process of creating an online store?
From coming up with the ‘big’ idea to getting your first sale, you can follow along with my journey to learn how to build a new online store from scratch.
In case you have no idea who the heck I am, I’m Nicole Martins Ferreira. I’ve been working in marketing since 2008 and started building online stores in 2013. As an experienced marketer, I’ll show you how to choose products based on their marketability, optimize for conversions and land your first sale. I’ll also show you how to design your online store as a professional brand.
I constantly get messages from new store owners asking for advice on how to build a store, get sales and build a brand they can be proud of. So I wanted to show you a behind the scenes look at what I do when building a new online store.
I hope to show you all that you can find high-quality products to sell. And that, yes, even dropshippers can build an amazing brand.
But since I’m showing you my journey as it happens, anything can go wrong. And, like a new entrepreneur, I can’t predict what will go wrong, I can only take action to resolve it. So I’ll let you know when it’s time to pivot and how to solve problems without overreacting to them.
This weekly series is as real as it gets. You’ll get a true inside look at what it’s like to build a dropshipping business. So follow along with my journey if you want to learn from my wins and challenges.
Over the next eight weeks, I’ll be showing the entire process of what goes on in my head when I build a new store. You’ll learn how to choose a niche, pick the right theme, the step by step process of setting up a Shopify store, how to choose products for your store and ordering samples for quality assurance, the process for designing a store, and of course marketing.
This week, I’ll be breaking down the exact process I follow for choosing what niche to build a store in. You’ll learn what I look for in a dropshipping niche, which tools I use, and how I measure popularity. At the end of this article, I will choose a niche and build a store around it for the duration of this weekly series.
So let’s dive into the big question.
- Should I choose passion or money in a niche?
- Evergreen Niches vs Trending Niches
- Tools for Finding a Niche Market
- Do you need to be an expert?
- Using Intuition to Choose a Niche
- FB Search
- A Bit More Research
- Next Week
- Want to Learn More?
Should I choose passion or money in a niche?
Some people need to be passionate about what they’re selling so they can ‘do work they love.’ Others find motivation as their bank account rises and couldn’t care less about what they’re selling. But truth is, you’ll likely need to balance a combination of the two, to really create a successful brand.
There has to be some interest within the niche that keeps you motivated to further explore who your audience is to better align your content to them. And when it comes to pursuing passion, it doesn’t always make you the success you dream about being.
So how do we balance the two?
How can we find a profitable niche that we actually want to create a successful brand about?
You can do this by finding profitable niches within your passions, ensuring your product pricing allows you to make a profit, and choosing a niche you’d just have fun creating content for.
Let’s take a look at what you should be looking at to help you discover your passions.
If you’re looking to choose a niche based on your passions, consider these questions:
- Which blogs and websites do you visit the most?
- Which pages or accounts do you follow on social media that you enjoy?
- What type of online stores do you buy the most products from?
- If you asked your friends to describe your biggest obsession, what would they say? (Feel free to ask them)
- Are there any products that you collect?
- If you had $1000 to spend on any product you want (not need), what would you buy?
Now I’ll answer these questions to create a short list based on my own passions.
Blogs and websites I visit the most:
- Oberlo (the coolest dropshipping app)
- Lulu’s (their dresses are amazing)
- Fabletics (I love buying athleisure products)
- Dynamite (fashion retailer with a great style)
Social Media Pages I enjoy:
- Berta (bridal wear)
- Blake Lively on Instagram (I like her sense of style)
- Relationship Quotes for Couples (I follow a lot of quotes pages in general)
What type of online stores do you buy the most from?
- Non-online stores: coffee, travel
My biggest obsessions according to friends:
- Britney Spears
Products I collect:
- Leggings and sports bras
What I’d buy with $1000:
- Vacation to Italy, France, Azores, Egypt or Japan
Now that I’ve answered those questions, I’ll create a shortlist of niches based on passions:
If you’re looking to choose a niche based on how much money you could make, ask yourself some of these questions:
- Which online retailers have been skyrocketing in popularity lately? And what products do they sell? (Focus on a few specific niche-based retailers instead of brands like Amazon)
- Which product are the most popular right now? (I’ll show you how to find some of these later in this article)
- Which products have the highest profit margin?
- Which niches have the biggest audiences?
Evergreen Niches vs Trending Niches
An evergreen niche is a niche that’s stood the test of time. Niches like fashion, beauty, gaming, and weight loss are evergreen niches. A trending niche, also known as a fad, is a niche that has an instant surge and fall in popularity. For example:
Notice how there was a sudden peak and decline. While you can make fast cash on a popular niche like that, you’re just as likely to be late to market.
When I choose a new niche, I usually look for an evergreen niche that regularly has trending products. For example, fashion has seasonal trends. Right now, athleisure, lace, and florals are popular within the fashion niche. Since the fashion niche, which is evergreen, has stood the test of time, it has proven to be a long-term business. However, since there’s constantly a change in trending products, we can also capitalize on quick sales from a skyrocketing product trend.
When building new stores, I usually look for an evergreen niche that has stood the test of time but has a rotation of trending products that’ll make getting sales online a bit easier.
However, at this point, I’m still unsure on the niche I’ll choose since I haven’t dived into research yet.
Tools for Finding a Niche Market
In this section, I’ll be using a variety of different tools to create shortlists of niche ideas to determine if I see any niches that show signs of being highly profitable or aligned within my passions to help me determine the right niche for this case study.
First, I’m going to look at the big three: Oberlo, Amazon, and AliExpress. On all these websites, you can find the trending niches quite easily. I’ll look at what niches keep coming up and try to find any potential sub-niches that would work well with them.
You’ll need to create an account with Oberlo to view the most up to date trending products. Notably, you can also check out the what to sell section of our blog to view product list articles. We update each article every couple months to ensure they’re always accurate.
If you don’t know what niche you’re selling in, you can call the store ‘YourName-TestStore.myshopify.com’ so you don’t overthink a clever name. You can always change it later by buying a proper domain name with the name you want. However, you can’t change your .myshopify.com domain to another name.
Once the Oberlo app is installed on your store, you can click on Search Products within the app.
When browsing this section, I found products for niches such as beach accessories, handbags, hair care, home decor, fashion, plants, and electronics.
It’s still too early to tell which niche within Oberlo would be the best one, so they’ll all get added to the shortlist.
- Beach accessories
- Hair care
- Home Decor
Right now, Amazon’s showing a lot of Mother’s Day gift ideas. Since I’m still in the research stage, it doesn’t make sense to try to capitalize on this holiday but it’s still worthwhile to look for any patterns within these gift guides.
Under the Mother’s Day category, jewelry, candles, handbags, home decor, fashion, watches, makeup, towels, and footcare keep showing up. I make a mental note of it but keep browsing.
Next, I examine Amazon’s Quirky & Unique section to see if I see anything that stands out. I found a few products in the outdoor gardening niche, art supplies, letter boards, journals, and phone cases. Before I started researching, I was set on fashion. However, after seeing the letter boards, I think I found an interesting product that could be fun to market.
Next, I browsed Interesting Finds. In this category, plants, mugs, pets, gay pride, kawaii products, and tea products kept appearing.
If I wanted to do even more in-depth research, I could look at specific product collections. But since I’m trying to find a niche rather than specific products to sell, I keep the search on broader collections on Amazon.
Notably, some of the searches are personalized to me. So it helps keep the focus based on my own interests. This could be good if you’re looking to create a business based on your own passions.
Here’s my short list from Amazon:
- Letter boards (really excited about this as a product)
- Jewelry (those who sell jewelery online make usually enjoy good margins)
- Outdoor gardening
The first section I look at when browsing AliExpress is the best sellers. When browsing the top ten best sellers nothing really jumps out of me. I’ll admit that I use a bit of intuition when trying to come up with a niche to start an online store in. Don’t be afraid to listen to your gut.
Phone accessories tend to be quite popular, so it’s something that can be considered. However, the main problem with the top ten best selling products is that they’re highly competitive and it doesn’t mention how long they’ve been selling this product for. In this situation, the high order volume may be due to a product that’s been selling for two years rather an item that’s selling well right now.
You should look at order volume when deciding on what to sell. However, it’s important to remember that if the order volume is sky high, the popularity peak may have already passed. And while it’s always a good idea to sell a product that’s proven to sell, you don’t want to sell a product when it’s past its peak.
Below the best selling products are the best sellers for various categories. You can use these categories as inspiration to help you determine what type of products you want to sell.
Under Women, fashion, jewelry, handbags, lingerie and accessories show up. For men, sunglasses, dad hats, backpacks and wallets are the top performers. The electronics category consists of mostly phone cases which indicates a viable niche. Fishing equipment is the most popular among the sports section. The health and beauty section showcases products such as fake eyelashes, makeup brushes, and concealer putting an emphasis on makeup and related products. Most of the kids products are clothes which proves how popular the fashion niche really is. Home and Garden has several kitchenware products such as knives. And lastly automotive consists of car cleaning products, breathalyzers, and driving accessories.
The shortlist for AliExpress is:
- Phone cases
- Men’s accessories
- Makeup products
Keep in mind that I don’t know anything about fishing, driving or children. So those niches weren’t excluded because of a problem with the niche but a lack of niche knowledge on my part. Feel free to pick and choose niches you’re interested in for your short list after noticing popular trends.
Trend Hunter is another great resource for finding cool trends within verticals. Not all trends are popular enough to create a store off of but sometimes you can find some pretty cool hidden gems on their website.
While browsing the fashion collections, products like sunglasses, jumpsuits, and unicorn shaped bags pop-up. When looking at their trend ideas, remember that some of the products might not be good for dropshipping. Some of the trends are ultra niche such as unicorn shaped bags.
I usually like using Trend Hunter to find broader niches like sunglasses. You might notice that some products keep coming up. One collection had sneakers show up a few times. This can hint that sneakers are a popular product to sell right now.
If you’re interested in a specific niche, you can look up the category directly to find patterns. Beauty has shown up in my searches multiple times since I started my research so I decided to browse it. While browsing beauty products, I noticed that eyeshadow palettes kept popping up in my searches. They had teen eyeshadow palettes which included many glitter eyeshadow colors. The collection also had eyeshadow palettes with different color schemes based on your eye color. There were about 4 different eyeshadow palette products featured, in a collection of 20, which is more than any other product. Thus, eyeshadow palettes may be a good product to sell.
I moved over to the tech category and specifically looked through gadgets. Projectors, speakers, automatic toilet fresheners, smart speakers, and air purifiers are some of the products that kept coming up.
After browsing other collections like kitchen, DIY, and Bizarre, I’ve come up with a shortlist from Trend Hunter:
- Eye shadow palettes
- Smart speakers
- Air purifiers
These were the products that I saw pop-up several times. I also know, from previous browsing, that I’d likely find these products within the Oberlo app.
Trending Products Blog Posts
Oberlo regularly shares product lists for the most popular products. We update our product lists every few months to ensure they’re always accurate. The product ideas on these lists can help you determine which niche to sell in. For example, you might notice that a lot of beauty products show up on the lists and decide to pursue a beauty store.
For this case study, I’ll be checking out the two products to sell in 2018 articles, business ideas, and dropshipping products to sell in spring.
While browsing the spring products, yoga pants, magnetic smartphone docks, and pregnancy pillows seemed to be aligned with some of my earlier searches. The trending products of 2018 lists showed fake eyelashes, phone cases and phone repair kits, which also popped up a few times. The business ideas article showcased more techy gadgets like mirrorless cameras, smartwatches, selfie drones, and dash cams which could all be included on their own tech gadget store. Phone cases and power banks also show up on the lists. There are also a few fashion trends in the business ideas article which can also be worth exploring.
- Fitness apparel
- Women’s fashion
- Tech gadgets
- Phone cases and accessories
If you’re looking to find a niche that pops out at you, you can browse through Wikipedia’s list of hobbies. It includes every hobby you can possibly think of. From baton twirling to golfing to crocheting, you’ll find an extensive list of both indoor and outdoor hobbies. You can browse the list to see if there are any hobbies aligned with your own passions or do some extensive research to find profitable niches within these categories.
Some hobbies have a large enough market that you can build an entire store around it. The great thing about hobbies is that typically people will join groups and spend money to pursue their interests. Thus, allowing you to find an audience you can sell to.
Some of the hobbies on the list that you can build ecommerce stores for include:
- Do it yourself
- Flower arranging
- Jewelry making
- Various fitness niches
So now, let’s compile all our shortlists into one mega shortlist to see what the potential niches are.
The Whole Shortlist
Now, let’s take a look at the shortlist we have right now:
- Fashion x 6
- Fitness x 2
- Beauty x 4
- Beach accessories
- Handbags x2
- Home Decor
- Letter boards
- Jewelry x 2
- Outdoor gardening
- Phone cases x 2
- Men’s accessories
- Eyeshadow palettes
- Smart speakers
- Air purifiers
- Fitness apparel
- Tech gadgets
- Do it yourself
- Flower arranging
Let’s look up every item on the shortlist on Google Trends to determine whether the niche is seeing search growth, loss or stability.
To save you time, these are the niches that showed stability or a slight growth on Google Trends. Some niches were broken down into sub-niches to better determine what to sell and who to target.
Note: the data isn’t from 2016, the lines on the graph extend beyond it. The images were captured within the week the article was published.
Women’s Fashion shows a slight growth that’s expected to continue to rise.
Men’s Fashion shows stability which will likely continue as it’s an evergreen niche.
Beauty is an evergreen niche. However, since I saw eyeshadow emerge a few times I decided to look it up directly and it shows a growth. The downward trend is likely a seasonal downturn and insufficient data for the month of May.
Within beauty, I also looked at eyelashes which tend to be sold frequently in Facebook groups. There’s a clear upward trend right now. This product could pair well with eyeshadow products as well.
Beach accessories, specifically pool inflatables, is seeing a strong upward trend. These products tend to popular on Instagram with influencers sharing their images online. The dip is likely due to insufficient data for the month of May. It’s likely that the product will rise throughout the spring and summer.
Women’s bags like crossbody bags and tote bags have seen strong growth. Worth considering a store build around it.
Home decor is an evergreen niche as evident by its stability from 2004 to 2018. It’s likely to continue its consistent popularity for years to come.
Letter boards have seen a strong quick growth. There was a slight dip but recovery in recent months. This could be a staple product or a fad but it may still be too early to tell.
Phone cases have grown in popularity over the years. With new phone case styles for new models its likely to continue its popularity.
Sneakers have seen steady growth. In the past LED sneakers were quite popular. Its possible that new trends within this niche will emerge that can be capitalized on.
Smart speakers shows a growth with a dip likely due to seasonality.
Fitness apparel such as athleisure, leggings and sports bras all saw an increase in traffic. With the weightloss and fashion niche being evergreen this is likely a trend that’ll stick.
The Do it yourself home search volume is not only stable but is also high. If combining this with another diy niche I can focus on capitalizing on these types of products.
Fake flowers have seen a steady growth as well. This is likely due to the popularity of the do it yourself community and those looking for a cost-effective alternative to real flowers.
The pet niche has seen stability. The dog niche has seen growth. You can look for products within this niche that serves specific animals knowing that the niche will likely continue to be popular for years to come.
Do you need to be an expert?
While you don’t need to be an expert in a niche, you might want to have some experience in the niche you’re planning to serve. It can get a little tricky to build a successful brand without having niche experience although not impossible.
You can fake it until you make it. That means, you might be able to find the right target audience through Facebook ads. Or you can build an audience using influencers on Instagram. And all this can help you land sales.
However, you might find it difficult to create blog content that resonates with readers or create social media posts that bring traffic back to your store. You can outsource these tasks. But when you’re starting out, most entrepreneurs have a do-it-yourself attitude to keep their costs low.
Having a bit of expertise in a niche can also help motivate you to sustain the business during the lulls or know when it’s time to call it quits.
Next, I’ll be narrowing down my shortlist based on my own areas of expertise.
At this point, we’ve created a shortlist of popular niches. Now you can narrow down your own list based on your interests, expertise, or whatever you think you can market well. Narrow down to your top three niches. Here are mine:
- Women’s fashion
- Letter boards
- Fitness apparel
I chose women’s fashion and fitness apparel as they’re the two niches that I spend the most money. As a regular consumer, I’m always aware of the trends and top stores within those categories.
I also chose letter boards because of my experience as a writer. I think I can come up with some quirky quotes to add on the letter boards for social media. Also, this would be a fun product to market.
Using Intuition to Choose a Niche
After spending about a week browsing different websites and looking at popular products, my gut feeling is telling me to go with the letter board niche.
Like some of you, I can’t predict how successful it’ll be without diving in. However, my brain keeps imagining what the social media feed would look like, what the copy would sound like, what the blog could become. From my experience in marketing, the product just seems marketable.
Logically, I don’t know how viable this niche is. But truth is, every product has an audience and it’s a marketer’s job to find it.
Now I’ll be doing a bit more in-depth research to determine who the competitors are in this niche, how they market their brands and where this product is marketed the most.
FB Search is a unique tool, I’ve personally used many times, to help determine how much engagement social posts get. This also acts as a competitor analysis tool that allows you to view the posts your competitors and customers make. You can look up specific brands within your niche as well.
Since letter boards is a specific niche, I can use the exact keywords in the search bar. I’m then shown pages, photos, marketplace posts, links and public posts with those keywords.
Most of the pages within the niche have a few hundred or thousand followers. I notice that most aren’t consistent with their posting schedule. Some haven’t posted in months while others don’t post daily. This helps me understand the frequency of my Facebook posts which should likely be somewhere between 1-2 posts per day to have a competitive advantage and scale quick. Though, in the beginning I’ll likely add more images to make the page appear more active.
While browsing the Facebook pages, I notice that most have quotes and funny expressions on their letter boards. I’ll need to add my own spin on it while being consistent with the niche. But browsing these pages gives me good direction for my eventual strategy.
Looking through photos of the product helps me understand some of the markets I can target. There are a lot of wedding, pregnancy, business and religious letter boards. Most are used for wedding signs, baby announcements, home decor quotes or to inform users of a sale. This helps me better understand how to create the look of my store before I start building it.
A Bit More Research
There are a few more things to look at before you start building your store. After all, you really want to make sure that there’s an audience for your niche before you spend hours on marketing and money on ads.
Here’s a quick run through of what to look for:
- Which social platforms do people market your niche?
- Are there Facebook groups for your niche?
- Are there targeting options on Facebook for this niche?
- Are there forums where people discuss the niche?
- Do people host events for this niche?
- Do influencers post about this niche?
- Are there fans for your niche?
Pinterest, Instagram, YouTube and Facebook all have popular letterboard pages and content. Since there is already a proven audience on these platforms, it’s best to put the focus on there. Why? It’s better to be on the platforms you’re audience is on. These four platforms have one big thing in common: visuals. So, while building my store, my emphasis should be on taking stunning images and video content.
There are no Facebook groups, forums, or events for this niche. I don’t really see this as a drawback, as the engagement on social pages above tends to be high so I press on.
While there aren’t any targeting options for letter boards, I can target those in the wedding, maternity and do it yourself niches to find my audience.
Most don’t have influencers post about this niche. However, customers could potentially be sending their photos in hopes of being featured which can help us grow our pages.
There is a fanbase for letter boards. They’re typically found within the DIY community. Some use letter boards for their wedding decor and others may use it for their social posts and photos.
Be sure to come back to the Oberlo blog next Monday to see the next part of the series: the store build. If you want to learn the step by step process of building an online store, this will be the most complete guide you’ll find online. You’ll learn how to come up with a business name, choose a theme and set up your Shopify store for the first time.
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