How to Choose the Right Niche for Your Shopify Store?

By Moshe June 9, 2021

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Choosing a niche for your Shopify dropshipping store can be difficult. There are many different options, and most of them have their pros and cons. In this blog post, we will discuss some of the factors you need to consider when deciding which niche is right for you!

Evaluate your passions and interests

Evaluating your passions and interests will give you a better idea of what niche is right for you. If you’re passionate about a certain niche, it will be much easier to start a store in that niche and maintain it over the long term.

It would help if you also considered your strengths and weaknesses. Your niche should correspond to what you’re good at or are interested in learning about. For example, if you have a lot of knowledge about the latest gadgets – then maybe an eCommerce shop selling tech gadgets would be right up your alley!

If you have no particular passions or skills but still want to open your dropshipping store, you can go with a more general niche.

The most important thing is to choose something that will be profitable for your store and make sense from the start to save yourself some trouble later on when running your business!

Passion is a surefire way of finding your ideal niche! If you can’t think of any passions or interests, try to research what other people are passionate about. This will help you learn more about different niches while also giving you ideas for potential niches.

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Consider the profit per sale you want to make

When looking for a niche to start your Shopify dropshipping store, you must consider the profit per sale variable. You will find out that some niches will have a lower profit per sale than others.

One of the most critical factors you will need to consider is how much profit per sale you want for your dropshipping business.

For example, if you want to start a dropshipping store that sells beauty products, the profit per sale would be much higher than selling pet supplies because pet supplies are typically cheaper.

To figure out if a niche is profitable, you need to think about the profit margin. For example, an expensive product might not be worth it because of the low margins involved in dropshipping. A product with higher margins will make more sense and would be easier for you as well! You also want to take into account another aspect of the niche: demand.

Check the demand

As mentioned, an expensive niche might not be profitable if there is no demand for that product. You want to make sure you are picking a niche with high margins and high demand so you can make money in the long term!

The best way to figure out demand is by typing the niche into Google Trends and seeing how often people search for it.

Google also has a tool that you can use called Keyword Planner, which tells you what keywords are popular in your niche. You want to find something with high margins AND high demand, so you’re guaranteed success.

Another great way to validate the demand for your niche is to do a Google search for products related to your niche and check the number of results. For example, if you’re going to sell makeup, run a Google search for “The best eyeliner 2021” and see how many results are returned with similar products. There is high demand for these kinds of products if there are many results, and you should consider this niche as a good option.

Narrow down your niche

It’s essential to narrow down your niche as much as possible so you could have a better chance of succeeding in finding the right audience for it. Make a list of all sub-niches that belong to your niche and choose from this list. You may want to repeat this process a few times to see which niche gives you the best results.

For example, Pet Care > Dog Care > French BullDog Care > Breeding French Bulldogs (target dog owners)

Check the competition

Since you’re competing in a niche with other sellers, you must research ahead and check the competition. Suppose there are already many dropshipping stores selling similar products as yours. In that case, this is not an optimal niche for starting a dropshipping store because you’ll be competing against established shops with more experience and an established brand, and you’ll have a lower chance of success.

If you find a niche with quite a few dropshipping stores, but the niche is still viable and popular, this might be a good option. On the other hand, if you find a niche with many dropshipping stores and see the same products being sold by many different stores, it’s best to avoid this niche. If there are not many dropshipping stores competing for a niche that you find interesting, then it could be an opportunity worth exploring.

If you find an interesting niche with a few competitors, go and check the competitor’s stores to see how they’re doing. Check how they promote the products and what audience they sell the products to. You can learn a lot about a niche by observing what other successful stores are doing.

You should also check if your potential niche has any copyright issues or trademark restrictions because these can cause legal problems for your dropshipping store.

competitor research

Check the shipping rates

Another aspect of choosing a niche for your dropshipping store is looking at the shipping rates. What are people charged to ship items from this niche?

Some niches have very high shipping rates, which would discourage buyers and make it difficult for you to compete with other stores in that niche, so be sure to check out potential shipping rates before deciding on a niche.

You can check out the average shipping rate on your competitor’s sites to get an idea of what your potential niche product shipping will cost.

Variety of products

This is a pretty important aspect of choosing the right niche. A lot of people are making the mistake of choosing a niche with only one or two products. This is not ideal because there are so many niches that offer more than just these few items, and also, people don’t like to shop in stores where they can’t find all of the things they need.

This also narrows down your feature opportunities for reselling to the same customers. If you only offer a niche of four items, then your reselling options are limited to those same four items.

As a rule of thumb, you want to have at least ten items in each niche so that it’s more appealing and gives people the chance to find whatever they need all in one place. This also makes marketing easier because you can target different audiences and test other products.

Look for reliable suppliers

It would be best if you were sure that you could find reliable suppliers for your niche. Make research to find suppliers with the product you want to sell at a reasonable price.

You can research suppliers on Alibaba or contact them directly if they have an email address available. Make sure your supplier is trustworthy before buying from them because many counterfeit goods are being sold as original products. The best way to avoid this is to research the supplier and brand.

Search for reviews on Google or Amazon to see what other people have said about them, and make sure you are buying from a trusted seller that is well-known in your niche.

You may want to order some product samples to test the quality before placing a large order.

In any case, make sure that you have alternatives in case something goes wrong.

Testing

While the market research you’ve already done is helpful, testing a few niches and products is what will ultimately lead you to your most profitable niche.

One way to test your niche before building a store is to create a landing page and publish it on Facebook.

You can use this landing page to show different products, prices, or offers so you can see how well they perform in terms of engagement and sales.

Test a few niches and keep what’s working while cutting out those that aren’t bringing anything new to the table. This also helps you avoid narrowing your niche too much, making it harder to get noticed.

Conclusion

While it seems like a lot of hassle, niche research is vital for your Shopify dropshipping store. It sets you apart from the competition, and it makes choosing products easier because you can target and test specific audiences. Researching takes time, but it will help save time in the long run when picking out items that sell well, so put the time into research, and your shop will reap the benefits.

Building a Shopify store? Learn how to set up product importing on Shopify with Importify.

Frequently Asked Questions

How do you choose the right niche for your Shopify store?

Choose a Shopify niche by evaluating your passions and interests, then checking profit per sale, demand, and competition. Narrow the niche down, confirm reasonable shipping rates and a good variety of products, line up reliable suppliers, and finally test before committing.

Why should I consider my passions when choosing a niche?

Choosing a niche you are passionate about makes it easier to start and maintain your store over the long term. Aligning the niche with your strengths and interests also reduces the research effort and keeps you motivated.

How do I check demand for a dropshipping niche?

Use Google Trends to see how often people search for the niche over time, and Google's Keyword Planner to find popular related keywords. You can also run Google searches for niche products and gauge how many results and similar products appear.

Why does competition matter when picking a niche?

Competition matters because entering a niche crowded with established stores selling identical products lowers your chance of success. A niche with some competition but still room to differentiate, or one with few competitors and real demand, is often a better opportunity.

Should I test a niche before building a full store?

Yes, testing is what ultimately reveals your most profitable niche. Creating a simple landing page and promoting it, for example on Facebook, lets you measure engagement and sales for different products before you invest in a full store.