How to Choose a Niche for Dropshipping

How to choose a niche
Want to kickstart a profitable Dropshipping business? What is your niche? How to Choose A Niche? What is the product that you are going to promote in your online store?

By the end of this article on 'How to Choose a Niche and an Industry for Dropshipping', you will have identified your niche and narrowed down on your product.

And as always, for any one-on-one consulting and assistance, you may mail me at
Tariq Digital Marketing Consultant
Tariq SP
Blogger & Digital Marketing Consultant

This article will help you on how to choose a niche. By the end of this article, you will have identified your niche and narrowed down your product. After all, you do need to have a product that is popular and for which there are buyers.

My previous article on ‘What is Dropshipping & How Dropshipping Works?’ gives you a basic idea of how Dropshipping works and what you need to get started.

The article may have ignited the entrepreneur in you. And you can’t wait to get started and promoting your own products.

And that is precisely the reason behind this article.

How to Choose Your Niche.

Your Dropshipping business starts with you choosing a niche and then choosing your product to promote and brand your store around.

The product, of course, is going to be the item that you intend to sell on your online Dropshipping store. And this is obviously going to depend on the industry and the niche that you decide to venture into.

How to choose a niche is very important.

There are a lot of factors revolving around your niche. For starters, your brand name, your store identity, your target audience, your pricing, the competitors in your space, etc.

While you may be interested in a particular product, it is not guaranteed to be a success. You will need to test the market and, most importantly, if there are buyers for your product.

What exactly is a Niche Market?

Let’s start off with a small example. Who do you think makes more money? A generalist or a specialist? The answer is obvious right. A specialist.

And why? Heard of the saying ‘jack of all trades and master of none’?

Well, the same goes here too. You either be an Amazon selling everything under the sun or a specialist selling one niche.

Do you have the resources, in terms of people, multiple office locations, the shipping & delivery network, the finances, etc., to complete with an Amazon? If yes, please do so.

If your reply is no, then it’s best to go niche and build your authority around your niche. You have to be known as the go-to person for your niche.

Let’s say you run a pet store.

You have anything and everything pertaining to pets in your store. In addition to the various product in your store, you also have great content. Be it blog articles, videos, etc., on various topics related to pets.

For example, grooming tips for your pet, the different breeds, how to choose the right veterinarian for your pet, etc. And you start building an email list of pet lovers and send them regular content and engage with them.

[Related article: A Beginner’s Guide to Email Marketing (2020) ]

Now you decide. As a pet lover, would you go on to an Amazon or a pet-related store? Generalist or the specialist? The pet store, right?

Carving out a niche market and positioning yourself as an authority and as the go-to brand for a specific audience not only establishes your credibility over other competing generalists but also results in a more focused business.

The content marketing, the target audience, the promotions, all have a more focussed approach, which makes it easier for the target audience to say, “This is for me”.

A niche market is a segment of a larger market.

For example, within the market for women’s beauty products, there are many different segments or niches. Make-Up & Nails, Skin Care, Moisturizers & Day Creams, All Skin Care, Hair Care, Bath & Shower Soaps, Body Washes, etc.

You could even drill down on a particular sub-niche as well. Remember, the more specific and narrow you go down to your niche, the higher the chances of you succeeding as an authority in the particular niche.

How to Choose a Niche

Some common ways to define a niche are based on:

  • Price (luxury, moderate, discount)
  • Demographics (gender, age, income & education level)
  • Level of quality (premium, handmade, economical)
  • Psychographics (values, interests)
  • Geographics (country, city, or even neighborhood)

Choosing to focus on a niche is a strategic business decision.

Yes, your customer base will reduce and will be narrowed down.

But appreciate the fact that the customers who do end up contacting you or visiting your store are the serious targeted audience.

And that helps you plan your sales funnels accordingly, be it with leads magnets, discount offers, etc.

The perfect niche is ideally one with a broad appeal, yet gives you that unique standing.

This way, you’ll be able to promote and market to a bigger audience, yet be able to carve out your own niche market and avoid competing with the bigger players.

So, how to choose a niche? How do you go about choosing the perfect niche for you?

Here are a few pointers to help you on how to choose a niche.

1. Your Current Niche

I am guessing that, if you are reading this article, you either have a business or product idea in mind and considering the options of Dropshipping to scale up your existing business or the idea. And thus, it is a great place to start off with.

You may have already cultivated an interest in a particular niche and done some groundwork.

And thus, you could start off with your current niche. Do consider looking at drilling down or narrowing down on your niche.

The narrower you go, the more chances you building authority in that particular niche.

2. Area of Interest

It goes without saying. If you are interested in a particular niche and passionate about it, you do more justice in creating a great store, identifying vendors, studying and researching the product, creating resources, articles, blogs, videos, sales pages & funnels, etc.

This is in continuation to the first point – Your Current Niche.

After all, you wouldn’t go all out if you weren’t passionate about a product. It would only turn out to be a 9 to 5 day job and you would soon get bored.

Remember, you’ll have to churn out a lot of content around your niche and your product.

You have to be that go-to person. You have to become the authority in your niche. And that happens, only when you are seen as the expert.

Creating ‘how to’ blog articles and videos, product review articles and videos, creating product images, among more are some examples.

A lot of content has to be created. And this happens seamlessly when you are genuinely interested in this particular niche of yours.

3. Strong Value Proposition

If you look around in the online space, you’ll notice that there are certain niches that stand out. For e.g., Health & Fitness, Making Money, Dating & Relationships.

Now, have you ever considered why these are the most popular niches? Yes, one reason is that they have the broadest appeal.

But the biggest reason is that these niches offer the best ‘value proposition’. A value proposition, as the name suggests, is the way in which your business is able to offer value to the end-user. The value proposition is the way that your niche and in turn your products can change people’s lives. How can your product solve their problems? What is the benefit of owning your product?

While I wouldn’t want to go in-depth into this topic, nevertheless, it is important that I mention what Maslow’s Hierarchy of Needs is. It is definitely one great yardstick on how to choose a niche.

How to choose a niche Maslow's Hierarchy

Maslow’s Hierarchy of Needs is a motivational theory in psychology comprising a five-tier model of human needs, often depicted as hierarchical levels within a pyramid.

From the bottom of the hierarchy going upwards, the needs are physiological, safety, love and belonging, esteem, and self-actualization.

Maslow used the terms “physiological”, “safety”, “belonging and love”, “social needs” or “esteem”, and “self-actualization” to describe the pattern through which human motivations generally move.

This means that in order for motivation to arise at the next stage, each stage must be satisfied within the individual themselves. Additionally, this theory is the main base in knowing how effort and motivation are correlated when discussing human behavior.

Each of these individual levels contains a certain amount of internal sensation that must be met in order for an individual to complete their hierarchy. The goal in Maslow’s theory is to attain the fifth level or stage: self-actualization.

So, Maslow’s theory suggests that the most basic level of needs must be met before the individual will strongly desire (or focus motivation upon) the secondary or higher-level needs.

This is a huge learning for us as well. Consider your niche and products around the various levels. As the level increases, the market share reduces. Should you consider higher ticket products as you scale up the pyramid? Well, that’s a call you could take.

Target your products around the bottom of the pyramid.

From the image above, you will notice the bottom three levels in the pyramid are

  • Physiological needs (air, water, food, shelter, sleep, clothing, reproduction)
  • Safety needs (personal security, employment, resources, health, prosperity)
  • Love and Belonging (friendship, intimacy, family, sense of connection)

Can you identify your niche and products around these three levels? Introspect, and I’m sure you will be able to come out with a winning product.

Examples of Some Popular Niche Markets

I will be coming up with an article on the various popular niche markets that you could consider. Here are a few of them, that I thought would be of interest to you.

(Source: Shopify)

1. Pet owners

Total expenditures for the pet industry in the U.S. alone is an estimated $75.38 billion in 2019. There’s a lot of opportunities to develop a niche within this market, across different types of pets, lifestyles, and more.

How to choose your niche Pet niche
(Source: Pupkart)

More niche product ideas for pet owners

  • Pet cameras to watch and interact with pets while you’re not at home
  • GPS pet trackers
  • Personalized products with pets’ photos
  • Organic pet food and treats
  • Pet accessories and clothing

2. Gamers

“Gamers” is a catch-all term that contains a variety of subsets: mobile gamers, PC gamers, console gamers, table-top gamers—the list goes on. There are more than 2.3 billion active gamers across the globe, and nearly half spend money on their hobby, amounting to an industry worth $137.9 billion in 2018.

How to choose a Niche - Gaming Niche
(Source: PC Gaming Race)

More niche product ideas for gamers

  • Ergonomic products for long gaming sessions (controllers, chairs, blue-light blocking glasses)
  • Decals to personalize consoles, controllers, etc.
  • T-shirts referencing aspects of gamer culture
  • Accessories for mobile gamers

The next article in this series will be on the most profitable niches for Dropshipping in 2020. Stay tuned! 😉

I hope you found value in this article.

Please do share your views and feedback in the comments section below. It will only help me improve and in turn, help me in bringing out quality content for you.

Thank you!

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