Ecommerce grew 33.6% between 2020 and 2021, and experts believe there’s plenty of room for growth. Projections indicate that ecommerce sales could grow from today’s $3.3 trillion to $5.4 trillion by 2026. Furthermore, there doesn’t seem to be a ceiling for how much the industry might grow.
There are many entry points into ecommerce. However, dropshipping remains one of the most accessible means of breaking into the lucrative global online market. Dropshipping requires minimal startup capital, is flexible, and is easy to scale.
Dropshipping is also potentially lucrative, with an estimated global market value of $128.6 billion in 2020. This figure is expected to grow to $476.1 billion by 2026. The market conditions and outlook couldn’t be better for someone wishing to start a dropshipping business.
However, like any kind of business, dropshipping has its challenges and drawbacks. One of the biggest challenges is choosing a viable dropshipping product. It’s a competitive space with low barriers to entry, so it’s important that you set yourself up for success from the start.
Dropshipping is no different from any other retail business. You’ll need to understand your products and your audience. With near-infinite products to explore, picking the winners is easier said than done.
Here are nine tips to ensure you pick the best dropshipping products.
Do Thorough Product Research
There are nearly infinite potential dropshipping products. Unfortunately, while it sounds great on paper, only a minority of products sell well. Recent estimates suggest that only around 10%-20% of dropshippers are successful.
The trick is to find out which products sell well. Each product in your catalog should have profit potential out of the gate. Try to focus your attention on the products successful drop shippers are selling, the latest trends, and products with a lot of buzz on social media.
Online marketplaces such as Wish, Amazon, eBay, and Alibaba are terrific places to discover which products are trending. You can also start with a general product category, so you don’t get overwhelmed with choices.
For example, Wish’s most popular product categories in 2022 include gadgets, hobbies, home décor, and makeup & beauty products. Similarly, Amazon’s best-selling product categories include beauty and grooming, sports and fitness, clothing and accessories, and home.
Choose a Product Niche
The next step is to choose a niche product. A niche product is an item that serves a specific subsection of consumers in a larger market. For example, beauty and personal care is a popular product category across most online marketplaces.
However, you can’t sell every conceivable beauty and personal care product being manufactured. Instead, you narrow it down to a specific niche. Following the same example, some niche products under beauty and personal care include:
- Cruelty-free mascara
- Men’s grooming kits
- Eyeliner pencils
- Pimple patches
- Travel bottles
- Hydrating eye gels
- Foundation brushes
- Press-on manicure nail kits
Fortunately, you can use software like Niche Scraper to find the best dropshipping niches. The tool works for popular dropshipping platforms, including Amazon, eBay, WooCommerce, and Shopify. In addition, the tool crawls popular selling platforms to find the best dropshipping products for various categories.
Google Trends is another terrific solution for narrowing down your niche. It lets you track the popularity of specific products across time. You can also check the product’s popularity in a particular geographical region or demographic. Finally, Google Trends lets you compare multiple products or keywords to check which has the best dropshipping potential.
You can also use Google Trends to estimate the market share for your chosen product. For example, you can check the product’s search frequency to decide whether it’s worth adding to your catalog.
Come Up With a Pricing Strategy
Ideally, you want a profit margin between 20% and 40%. That’s the range for a sustainable ecommerce business. Your profit is what you get after deducting your overheads, including supplier costs, shipping, and advertising.
The first instinct for many new drop shippers is to choose high-ticket items with the hopes of making a killing. However, expensive products have little demand. Also, refunds for high-ticket products can hurt your cash flow.
The best pricing strategy is to choose low-cost products with high demand. Then, add your desired profit margin after your expenses to determine the list price. Low-ticket items will likely give you the sales volume you need to be profitable.
Another advantage of high volume sales is credibility. You can start to accumulate positive customer reviews soon after launching your business. These reviews and ratings are crucial for attracting new customers.
Finally, don’t forget to compare your prices with competitors selling similar products.
Choose Trending Products Carefully
There’s a big difference between popular products and trending products. Popular products tend to have consistent demand, regardless of the season or economic status. Trending products are only in demand for a particular period.
So, focus your attention on popular products or evergreen products. Examples of items with relatively consistent demand include:
- Smart devices
- Electronic gadgets
- Artificial Intelligence (AI) and Virtual Reality (VR) devices
- Luggage and travel
- Sports and fitness equipment
- Kitchen gadgets
- Car accessories
- Pet care tools
- Kids’ toys
Remember the fidget spinner? Trending products are great if you get your foot in early. However, these markets quickly become saturated, and demand declines quickly and consistently.
So how do you tell the difference between a popular or evergreen product and a trending product? Simply search the product on Google Trends to see how it performed over a specific period, such as the last three or five years.
You can also search your favorite ecommerce websites for the most popular sellers. Then, find their sales history and determine which products have the most consistent sales. This simple exercise should inspire you on which products to include in your catalog.
Finally, ensure your products are unique enough to purchase online. Some products may be popular, but this popularity doesn’t translate to online sales.
For example, anyone can walk to the nearest convenience store or pharmacy to buy a toothbrush. However, they might be willing to wait a few days and pay extra for an eco-friendly bamboo toothbrush.
Learn to Spot Problematic Dropshipping Products
It’s not always about what you should sell. It’s equally important you know which items to avoid. These products traditionally don’t do well with dropshipping.
Dropshipping has been around long enough to draw certain generalities across products that do well vs. those that fail. Here are a few tell-tale signs that the product probably isn’t the best choice for dropshipping:
Too big – A quick way to test a product’s dropshipping potential is to apply the ePacket test. ePacket is a budget courier service. It’s available for U.S. drop shippers purchasing from China, Hong Kong, and Korea. The service has a size and weight limit of 90*60 cm and 2 KGs.
If your product exceeds this size, it’s probably too costly, time-consuming, and bulky to ship, regardless of your courier. This rule isn’t iron clad but is a great tip for beginners. You want your dropshipping debut to be simple, and shipping can quickly become a headache.
Lastly, be sure to shop around for the best drop shipping company for your products. Some drop shipping companies do well with certain products.
For example, Shopify is terrific for beginners. But, Printful might be a better choice for print-on-demand dropshipping. We have a great post here reviewing the best dropshipping companies for different categories of drop shippers.
Expensive to source – Most new drop shippers prefer to keep their items under $100. Remember that you get your profit when you deduct manufacturing costs, logistics, and advertising. High-ticket items like electric guitars have little margin for profit, especially for new drop shippers.
You also want to take advantage of impulse buying. This is especially true for a new drop shipping business with few reviews and little credibility. So making your products accessible is a great way to set your business up for success.
Fragile – You have no control over how couriers handle your packages. Plus, you can expect at least some impact during shipping. Therefore, fragile items like glassware might be out of the question.
Similarly, you might want to avoid products with multiple moving parts. These parts may break in transit, and the cost will be forwarded to you. But, again, the supplier typically expects payment if something goes wrong during shipping.
Restricted social media advertising – You can’t advertise certain types of products on social media. For example, Facebook doesn’t allow advertising products that make unverified health claims.
You may believe what your supplier says about its supplements. However, it’ll be challenging to sell if you can’t advertise your products in the first place. The same goes for dangerous products like weapons.
Advertising is critical for attracting new customers. So, ensure that your products don’t interfere with your ability to market your dropshipping business.
Leverage Your Personal Experience
It helps if you have personal experience with the products you sell. So, where possible, favor products you have experience using. Simply offering technical details about your products may give you a competitive advantage.
For example, say you have experience working at a baby store. You may want to consider dropshipping products in the baby and kids niche.
A first-time parent may not know what to buy. Therefore your personal experience can be an asset in this situation. In addition, you’ll be able to offer tips such as infant clothing sizes, age-appropriate strollers, or car seat safety features.
Your expertise can also prove helpful for up-selling. For example, you may recommend post-pregnancy items like breastfeeding pillows, maternity pads, and nursing bras in addition to the baby items.
Passion also plays an important role in your business success. First, passion is contagious. Your clients can tell that you care about the products you’re selling. Secondly, passion can help you go the extra mile by creating unique content to promote your products.
Solve Your Customer’s Problems
You’re getting into dropshipping to make money. So it’s natural that your focus should be on products that sell well and have good profit margins. But, don’t forget about your customer’s needs.
A great product serves people. There are many examples of great products that solve everyday problems. You can choose a specific product category and try to find items that solve everyday problems.
For example, we suggested that furniture might not be a great dropshipping product. Furniture is bulky and difficult to ship. But, you can still sell furniture-related items that make life easier.
For instance, pet hair removal brushes, odor absorbers, or cup holders for sofas are unique and handy items. These products are also inexpensive, which is perfect for impulse buying.
Other examples of unique but valuable products include:
- Hand blender and food processor combo
- Foldable bike helmet
- Portable dishwasher
- Portable espresso machine
- Weekly pill organizer
- All-in-one stain removers
- Survival bracelet
Again, inexpensive products are great for impulse buyers. Plus, you can expect more sales once word gets around about your problem-solving products.
Choose Simple Products
Some products sound great on paper. But, they don’t quite hit the mark in real life. For example, Oakley Thump sunglasses sported a built-in MP3 player and a slew of other futuristic features.
However, with a hefty price tag of almost $500, Oakley had vastly overestimated how much people were willing to pay for the novel sunglasses. Furthermore, there were numerous complaints about the weak sound, cheap-feeling material, and impractical design.
Complex products are likely to attract above-average returns and refund requests. But unfortunately, you’re also more likely to receive negative reviews from frustrated users.
Therefore, it’s a good idea to stick with products that are easy to use. Ideally, your products should also have a few replaceable parts. This strategy reduces the chances of a product breaking a critical part during shipping.
Join Online Dropshipping Communities
There are many dropshipping communities on social media platforms like Facebook and Reddit. These communities offer insightful and actionable information from experienced drop shippers. Plus, they are free to join, so you have nothing to lose.
There are a few ways to join a drop shipping community. First, you can restrict your groups to the countries or regions you intend to sell. Alternatively, you can join a niche-specific community for the products you hope to sell.