There’s an old saying selection is more important than effort. This is especially true in cross-border e-commerce dropshipping business. How to choose a profitable niche market with little competition for Shopify dropshipping business is something that many people want to know. However, it is always difficult to find the perfect niche market for Shopify dropshipping, especially for beginners, you will encounter many confusing questions: What niche product is profitable? If the selected niche market does not generate profits as expected, what should I do? Professional dropshippers usually recommend choosing a niche market that suits your interests and passions. This will be a good start, you will put your expertise and patience into this field. If you want to do a profitable Shopify dropshipping business, you need some reliable and measurable indicators to choose niche products. This article will tell you step by step how to analyze whether a niche market is worth doing in from 4 fields and 11 dimensions.
Take advantage of Aliexpress
When we choose a niche market for Shopify dropshipping business, there are several indicators on Aliexpress could help us easily to evaluate its potential. We use five stars as the evaluation scale. A rating of 5 stars indicates great potential; a rating of 1 star means that this niche is not optimistic.
product quantities on Aliexpress
When we select products on AliExpress, we measure these parameters:
Number of AliExpress products: We use specific keywords to find niche markets. We only choose free shipping and ratings above 4 stars.
If we can find more than 2,000 products, then this niche market scores 5 stars;
If there are 500 ~ 1999 products, this niche market scores 4.5 stars;
There are 100~499 products, and this niche market is rated 4 stars;
There are 1 to 99 products, and this niche market is rated 3 stars.
The popularity of niche markets on AliExpress
The popularity of the niche market on AliExpress:
Filter conditions: free shipping, score 4 points and above, sorted by sales. We select the top 10 products and calculate the average of their sales.
If the average sales volume is greater than 2000, then this niche market scores 5 stars;
The average sales volume is 500 ~ 1999, 4.5 stars in this niche market;
Average sales volume is 100~499, 4 stars in this niche market;
The average sales volume is 1~99, and this niche market is 3 stars.
Number of reliable dropshipping suppliers
Trusted dropshipping supplier: The filter conditions are the same as the previous step. Select the top 10 stores and use the evaluation parameters of AliExpress itself:
- How long has the store opened
- What is the store rating
- What is the percentage of positive reviews
- Whether the product and description are consistent
- Is the seller willing to communicate
— Delivery speed
We will consider all these parameters. However, in my personal opinion, the praise rate is the most important. Customer satisfaction is a key factor in the success of a store. This is why I calculate the average feedback of the top 10 stores.
If the average rating is >96%, then this niche market is rated 5 stars;
95% ~ 95,9% rated 4.5 stars
94% ~ 94.9% rated as 4 stars
93% ~ 93.9% rated as 3 stars
Profit estimation When we start dropshipping business we need a niche market that can bring us considerable profits. In most cases, AliExpress can satisfy us and provide us with high-quality and inexpensive products.
The prices of products sold on AliExpress are really low. This means that we can set a relatively high price on our own independent station (of course, this price is lower than that of competitors). In the end, there will be a happy ending: our customers are satisfied with shopping, and we are happy because we made money.
How to estimate the potential profit dor Shopify dropshipping? We select the most popular products in the niche market. Then select 10 other online stores. We calculate the average value of the same product in other 10 online stores and compare it with the product price on AliExpress:
If the price difference is more than 250%, then the niche market scores 5 stars;
The difference is 100%-249%, and the rating is 4.5 stars;
50%-99%, rated 4 stars;
Spread 1% – 49%, rated as 3 stars
Take advantage of Google Trends
Fashion often changes with changes in public interest. Therefore, you have to observe: in a niche market, whether your audience’s interest is stable. Google Trends is a great tool for understanding public interest. When designing it, the purpose is to analyze trends. It can also be used for product trend analysis, because it can tell us:
How does search volume change over time;
Search geographical distribution;
What are the most popular search terms;
Whether the search term is seasonal.
Google trend for niche products
How to use google trend to check the niche product popularity?
Choose a product category. The easiest is to rely on AliExpress data and collect all possible categories. (For example, electronics, home and decoration, jewelry, etc.).
Enter Google Trends and enter keywords. Let’s take ‘knitting’ as an example:
Check the results and try more settings.
For example, in the image above, you can see that the search volume changes over time. If you want to know more specific information, you can change some settings:
The area you interested
Scoring reference standard:
If the trend is rising, give this niche a 5 star;
For a steady trend, score 4 stars;
For the downward trend, score 3 stars
Curiously, this example shows seasonal changes in search volume. Some types of products are seasonal (such as Halloween decorations, Christmas gifts, etc.), and they are only in demand during a certain period of time. Some products are non-seasonal, for example (birthday cards, wedding decoration products, etc.).
If we sell both seasonal products and non-seasonal products, there is actually no problem. It is not recommended to sell only seasonal products.
You can also learn where these search terms are more popular.
In addition, you can also see the most popular related searches and the rate of increase in search volume. This is very important for people who want to promote the store, conduct SEO and advertise.
Assess advertising potential
We should estimate: Can we successfully promote our products by advertising on popular social platforms. For example, the most popular Facebook and Instagram.
For example, when we want to evaluate: on Instagram, can we promote specific categories.
You can use the data provided by Websta.
The usage is very simple, just enter the keyword in the search box.
Search results will be divided into 2 categories: users who contain this keyword in their account name, and keyword tags. This is easy to understand:
Which tags you need to use to get the most audience (those numbers represent the number of times the tag has been used).
Which accounts can be cooperated with to increase the visibility of the online store.
We use the following criteria to see if the niche market is promising:
If there are 10 accounts and each account has more than 30,000 fans, then give this niche a 5-star rating;
If there are 5-9 accounts, score 4.5 stars;
If there are 1-4 accounts, score 4 stars;
If there are 0 accounts, score 3 stars.
The account we want to cooperate with usually has at least 30,000 fans. The most common way of cooperation is through shoutouts: We ask the owner of the account to pay for him to post our advertisements.
Number of Facebook groups
When we evaluate the promotion potential of a niche market, don’t forget Facebook. Facebook, as a social application, is an artifact that makes your online store famous.
In order to check whether the niche market we have selected has the potential to make money, just enter the keywords of the niche in the search box and select the group.
You will see many groups that contain the target keyword in the group name, and you can also see the number of group members.
We usually think that a good niche market has at least 15 groups, and each group has at least 30,000 members.
In addition, we can also view the “Public Homepage”, which allows you to better understand the popularity and opportunities of the niche market.
Reference scoring standards:
If there are 10 groups, each with more than 30,000 people, then give this niche a 5 star;
5-9 groups, rated 4.5 stars;
1-4 groups, rated 4 stars;
If there is no group with more than 30,000 people, score 3 stars.
It needs to be emphasized here that these parameters are not only useful for judging specific niche markets, but also useful for judging related niche markets. For example, when judging the knitting market segment, you can also consider sewing and knitting patterns, craft materials, etc.
It is also a good way to choose a product category that can be easily promoted through PPC advertising and SEO tools. This means that we need:
Generate some valuable content for the niche market of the online store;
Optimize images and videos;
Choose keywords that are sufficiently relevant to the category and competitive. Search engine optimization (SEO) is very important for the promotion of Shopify stores.
There are several very important points to pay attention to when choosing a niche market for Shopify dropshipping.
We need to consider: which niche markets have the potential to do SEO, and which ones are completely unsuitable for SEO.
The first step is keyword research.
The name of each niche market is actually a keyword. Therefore, you must first estimate the search volume of this keyword (or similar keywords) on Google. You can use Google Keyword Planner to solve this problem.
Google Keyword Planner search volume
Step 1: Log in to your Google account and open Keyword Planner;
Step 2: Select the “Discover new keywords” option;
Step 3: Enter the name of the niche market and click “Get Results”.
You can get Google search volume for keywords related to the niche. The default time range is 12 months. You can set it according to your actual situation.
If the search volume is between 10,000 and 100,000, then this niche market is very good.
Niche markets with too much search volume, such as more than 100,000, should also be skipped. Because this niche market is too broad and competition is huge.
If the search volume is less than 5,000, skip it too: there is probably no competition and no profit.
We usually use the following methods to score:
If the search volume is 50-50 million, this niche market is suitable for dropshipping, and give this niche market a 5-star;
50,000-100,000, with a rating of 4 stars-the competition is relatively high, but there is likely to be a place for you;
The search volume is less than 5,000, and the rating is 3 stars-this niche market you can dominate, but there is no profit;
The search volume is greater than 100,000, and the rating is 2 stars-this market is too competitive to win.
As you can see, the search range of Google Keyword Planner is only 3 intervals. Therefore, you should refer to the search volume of related search terms.
If the search volume for many words is between 100,000 and 100,000, we are likely to count it as a 4-star rating (search volume between 50,000 and 100,000);
If the search volume for many words is between 10,000 and 10,000, we are likely to count it as a 5-star rating (50-50,000 searches).
The number of results with keywords in the URL
In the next step, you need to search manually to gain insight into the niche market and possible competitors.
Open Google search engine, enter the command, and then click search:
allinurl: niche name (for example: allinurl:knitting)
The result page will display the page that contains the keyword in the URL.
The number of search results can give a general understanding of the competition in the niche market.
We usually use the following methods to score:
If there are 10,000-100,000 results, this niche market is suitable for dropshipping, and give this niche market a 5-star;
There are 30-10 million results, rated 4 stars-you need to work hard to win the competition, but it is worth it;
Less than 3,000 results, score 3 stars-low competition, but also low for example;
More than 100,000 results, score 2 stars-competition is too exciting, chance of winning.
It’s also recommend some professional keyword research tools, such as MOZ. It needs to be registered in order to gain access.
How to use: Enter keywords in the search box, and then click “try free”. This tool will tell you very useful competition information.
Although all indicators are very important. But let us first take a look at the “Difficulty” indicator: through this indicator, we can know whether this niche market is beneficial to us.
We usually use the following methods to score the difficulty:
If the difficulty value is between 0-40, score 5 stars;
Between 41-60, rated 4 stars;
Between 61-80, score 3 stars;
Between 81-100, rated 2 stars.
I suggest you study all the features of this tool. Note: The free version has usage restrictions, but it is enough to evaluate some niche markets.
Analyze the niche product competition on Amazon eBay
The last step is to manually analyze the search results page. Enter keywords, we need to check the first 2 pages of search results to understand the degree of SEO competition with retail giants.
If the entire first page is occupied by Amazon, eBay and some other retail giants, your chances of making a profit will be very small. After all, these giants took away about 90% of their customers.
If the search results page does not include competitors, but includes some services: such as Yahoo Answers, or other spam marketing articles (such resources are called simple targets), this means that this niche market is free. You must seize it well. If most of the first page is occupied by retail giants, but there are at least 4 easy targets with a rating of 5 stars-this is the most ideal result, you can occupy a place in the competition and get huge profits;
If the first page is completely occupied by retail giants and scored 5 stars-this means that the competition is quite high and the chance of winning is small;
If most of the first page is occupied by easy targets, score 3 stars-you can win the competition, but the profits you get are not worth doing.
If the first and second pages are occupied by the retail giants, the score is 2 stars-the competition is huge and the chances are slim.
What niche markets should be avoided for Shopify dropshipping?
There are some niche markets need to be treated with caution. Before attempting to enter, it is recommended to think twice.
Products that need to be checked carefully before buying, such as complex electronic equipment, sneakers, exquisite clothing, etc.: When we buy these products in physical stores, we need to try them in person to see if they really suit us. If your store has these products, be prepared for a large number of refunds-your customers may not be able to determine the correct model when they first buy it.
May cause legal problems and be detained: Products such as knives, fishing tackle, shotguns, bows and arrows may be classified as problematic by the post office and detained by the customs. Therefore, make sure that the transportation will not be troublesome before shipping.
It should be noted that these requirements vary greatly from country to country/region. Therefore, it takes some time to study the problem of the target area.
Products that are easily damaged during transportation: For example, fragile glass, porcelain products, and food. These products are not suitable for long-term transportation. When a customer receives a broken product, they will be very disappointed, which will have a negative impact on your store.
Oversized and overweight products: This type of product may have unforeseen shipping problems. Moreover, the freight will be high. Buyers can’t see: buying from you is an advantage over buying directly from a physical store.
This is how we choose a profitable niche market for Shopify dropshipping. How do you choose your niche market for dropshipping business, you are welcome to comment.