Guide To Choosing The Right Niche For Your Drop Shipping Business

If you are planning to start or purchase a drop shipping business, you do not have to go through the stress of managing and looking after stocks and inventories. Nor do you have to go and get shipments delivered right at the doorstep of your customers. However, building your own drop shipping business is no cakewalk either. There are a lot of things you need to do, in order to make it big in drop shipping.

One of the first steps to consider before you get started with a drop shipping business is to pick the right niche. It is essential for you to follow the correct approach to picking the right niche for your drop shipping business. The correct approach to finding a niche for your business involves a certain level of research. You need to be aware of certain things before you make a decision, in order to be able to make the most of your drop shipping business.

Things To Consider While Choosing The Right Niche For Your Drop Shipping Business

Guide To Choosing The Right Niche For Your Drop Shipping Business. Woman Shopping photo

Find the right niche that caters to a defined target audience, offers profits and has good demand.

1. The Product Price

A very important factor to consider while choosing a niche is the pricing of the products that fall within the niche. You cannot randomly pick any product niche and build a drop shipping business out of it. Sure, you need to have some level of passion and knowledge about the kind of products you wish to be sold through your business, but you cannot view it as the ideal criteria for choosing a niche.

It is true that reasonably priced products are usually liked by customers. They tend to prefer opting for purchases that offer a better bargain. However, one must opt to sell products that are highly priced. Contrary to popular belief, it will be more profitable for you if you sell products that are highly priced.

Now understand the logic behind this. By selling products from both highly priced categories as well as low-priced ones, both involving the same amount of marketing effort and money, you will be at a loss.

If you are selling products for $50 and $1000 for instance, you will be putting in an equal amount of work. Putting in a lot of effort for a low-margin product will not be profitable for your brand. Ideally, you should be looking at a profit of 20% on the gross revenue for best results.

Thus, one must pick a niche in which products are priced at good rates, and offer about 20% of profit on gross revenue.

2. Product Availability

A very important factor to consider while choosing the right niche is the availability of the products from that niche. Ideally, products that are not available locally tend to do well. When you are selling products that are not available easily in a particular area, you are catering to an already strong demand. As a result, you must consider products that belong to a niche that are not available locally, yet have a high demand.

3. Identify Your Target Audience

While picking the niche for your drop shipping business, you also need to take into account your target audience. The ultimate goal is to go for an option that provides you with maximum profit. If you are catering to an audience that is very wealthy, you will have to put in efforts and resources to live up to their expectations of high quality. This means high quality of products, customer service and so on. In this sense, very high income groups as a target audience do not show profitability in any sense.

In case of lower income groups, persuasion, inquiries and whole lot of other things will make the job more costly and difficult for you.

You should try and target the upper middle class groups. They have a fairly high level of income and are usually comfortable to spend money on products online. Choose products that cater to the needs of the upper middle classes.

4. Loyalty Towards Brands

There are some products for which there are brands that already have high levels of customer loyalty. In the case of kitchen appliances, for instance, there are certain brands that are already customer favorites. In this sense, it becomes difficult to break that loyalty and draw attention towards your business. To make it easier, you must pick a niche for which there is limited customer loyalty or none at all. It will be easier for you to build a presence in that case.


Picking a niche for your drop shipping business can be streamlined and simplified by following the easy steps mentioned above. The ultimate goal for you is to ensure maximum profits and picking the right niche carefully, is essential for doing that.

Sites like ExchangeMarketplace offer a great platform to get started with your own drop shipping business. You have the opportunity to buy a drop shipping business that has already been running, and generating traffic as well as revenues. There are drop shipping sites from a variety of niches available on ExchangeMarketplace and it’s just a question of nailing the niche you want to target and purchasing a business within that niche to get started!

You’ll also like to read:

Leave a Reply

Your email address will not be published. Required fields are marked *