Dropshipping may be the perfect option if you're looking for an easy way to start making money online. With drop shipping, you create and sell products online without carrying inventory. The key to a successful dropshipping business is to source products from the best and most profitable dropshipping niches.
Read on to help you find the most profitable dropshipping niches in 2023. This article will provide information on what niche research is required and tips for finding profitable niche product ideas. Once you've found the right niche, get started dropshipping today!
What Exactly is a Dropshipping Niche?
Dropshipping is a great way to start a business that can be profitable and hassle-free. To dropship successfully, you first need to identify a niche. This could be anything from kitchen gadgets to pet accessories to automotive parts. Choosing the proper niche is vital for your business strategy and long-term goals.
You need to ask yourself some key questions before selecting your niche.
- What am I passionate about?
- What do I know a lot about?
- What age bracket(s) do I think my store audience will be?
- Do I have a preferred gender for my ideal customer?
- What geographic locations do I want to sell to?
Choosing a profitable dropshipping niche involves knowing the type of audience you covet. The audience demographics and psychographic traits will help you pinpoint a few different niches to research further. Doing market research will provide dropshipping niche ideas you'll need to validate.
For example, let's assume you have a primarily male audience within the United States that fits within the age brackets of 25-34 and 35-44. With this limited information, you could make the following assumptions about your audience.
- Homeowners or soon to be
- Married or soon to be
- Have children that are not teenagers or grown
- Have careers or jobs
- Have little time for themselves if all above is true
If the above demographic traits are validated as being correct, your options for niches might be:
- Home Improvement
- Sporting Goods
- Men's Health & Wellness
- Men's Fitness
The following steps would be to research these niches to determine if they meet the criteria of being profitable as well as the level of competition within each. If a niche is popular, chances are it will have high competition and profitability. Profit usually drives competitiveness but not always. Sometimes a niche is chosen based on its appeal to a massive audience.
Sometimes niches are selected based on passion. For example, if you had a passion for fitness, you might decide your focus would be on that niche. Or maybe you are handy so home improvement would be a great fit.
The point is to do your homework and outline the niches you want to research further to narrow down the field to a few that would suit your skillset and know-how. Finding the best dropshipping niches is more an exploration of yourself and what resonates most in your life.
Profitable Dropshipping Niche Research Tools?
Dropshipping can be a profitable way to make money online, but finding the right niche can be challenging. Fortunately, various market research tools are available to help you do the work. Some popular free options include Google Trends, Google AdWords Keyword Planner, and Facebook Audience Insights.
Many powerful paid tools should be considered for what they provide. Let's outline some of the options available for doing dropshipping niche research.
Google Trends for Researching Trends
When starting a dropshipping business, one of the most important things you can do is identify trending keywords. By doing so, you'll be able to target your audience with greater precision and improve your chances of growing your store traffic.
Google Trends is one of the best ways to gain valuable insight into what is trending. Several tools within Google Trends can help discover hidden and trending value.
Recently trending is a great way to see what has been searched most recently. Typically this will show what was most talked about recently (within 12-24 hours).
Google Trends Year in Search report provides insight into topics of interest that have stood the test of time. You can go back to 2001 and look at any term or subject to see how it has faired.
Additionally, with Google Trends, you can look at any term against another and see which is more popular, as well as other key insights that can help you to decide how to move forward.
From the chart above, you can see the comparison of home improvement and home and garden. Home improvement has been the more searched and trending topic worldwide over the past 5 years.
You can change your filters to narrow the information down to a country, a time range (one hour to 2004-present), or a custom time range; by category and search type (image, news, Google shopping, and YouTube). Check out our article on how to use Google Trends for dropshipping research for more detailed tutorials.
Related Article: Dropshipping Research Using Google Trends
Google Trends is a free tool with unlimited potential to help find profitable dropshipping niches in 2023.
Google Keyword Planner
Google Keyword Planner is an excellent tool for finding profitable niches to market products. By entering niche keywords and seeing where the level of competition, you can determine which keywords are most commonly searched for online. This information will help you target profitable markets with high potential profits.
There are multiple ways to use the tools within Keyword Planner. Still, a simple way to get started is to use the search volume and forecasting tool by inputting keywords related to your prospective niche ideas to validate their popularity in search volume.
Continuing with the home improvement example, you can see that the term home improvement shows 201,000 monthly searches within the USA (based on settings) with a 49% increase YoY and low competition. Now don't let that fool you. That is simply for the term itself, not the category.
The information is invaluable to further research sub-categories within the niche to see what is searched on most. Home repair, housewares, and tools are three high-value areas, but home repair also has low competition. That could mean opportunity.
Google Keyword Planner is free, but you must use a Google Ads account to access it. Signing up for a Google Ads account is also free and doesn't obligate you to run paid campaigns.
Additionally, using Google Ads for keyword research can give you an idea of which keywords most effectively attract people's attention online. With this knowledge, selecting the best keywords for your advertising campaigns becomes easier.
Facebook Audience Insights
To utilize Facebook for audience insights, you'll need to be logged in to your account. You can click on this link once logged in to avoid trying to navigate to the Ads manager: facebook.com/ads/audience-insights
Once there, you'll see the general audience panel as it applies to the business category for your company page or account. This shows you the general demographics of your audience on Facebook.
To view additional audience insights, you'll want to use the filter provided by Facebook. This will allow you to enter a location, age range, gender, and interest. We added home improvement within the age range of 35-54, did not filter by gender but chose the United States as the location.
When selecting home improvement, we were relegated to choose the master category of home and garden, which means that home improvement is not separated from home and garden on Facebook. Therefore, the results show that the majority share of the audience by gender is women, therefore breaking one of our key demographics of males.
One thing to remember when using Facebook is that the tools are only valuable for determining the audience and their use of Facebook. Facebook is the largest social media site globally, with over a billion users. Still, we recommend using it only if you want to advertise on the platform or are looking for a niche in which you can leverage Facebook.
How to Find Profitable Dropshipping Niches Using Paid Tools
Moving on to paid tools for researching profitable dropshipping niches. Many dropshipping businesses rely on paid tools daily to inform them about profitable dropshipping products within their niche to ensure they can always stay up with the competition if not ahead.
Many paid tools can assist with finding profitable niches. Here are some tools we think provide the best insights and overall value.
SellTheTrend is well-organized and packed with features. It's also more than just a research tool. With SellTheTrend, you can connect with suppliers within your niche and outfit your store with top and trending products.
Powered by 7 million products across 83 niches with AI tools to assist in remedial tasks and content creation, SellTheTrend is poised to be a player in the dropshipping niche in 2023 and beyond.
The Build Monthly plan starts at $39.97/month or $32.97 if you pay yearly, which gives you two months free. with a 7-day free trial to test it out. That may seem pricey, but considering you are paying that price and essentially getting a fully functioning storefront, it falls in line with other options and provides tremendous value. A few of the key features are outlined below.
- SHOPS Ecommerce Platform
- The NEXUS Product Explorer
- 1-Click Push To Store: 5000 Products
- Connected Stores: 3
- Chrome Extension
- 24×7 Support
- Monitor Custom Stores & Products: 100
- 1-Click Order Fulfillment
- Store Intelligence Spy Tool
- AI Tools
Thieve is another popular niche research tool, and deservedly so. Thieve is incredibly popular and is jam-packed with value, incredible features, and a low buy-in. What we like most about Thieve is that the selected products are based on real user data, so you know that the 4000 daily products you are evaluating are the best.
Thieve has a unique way of having you evaluate products. You will recognize the technique if you've ever used dating apps. The swipe-left and swipe-right nature of evaluating products that resonate with you do a great job of gamifying product selection.
You can sign up today for a 14-day free trial using your email, Google, or Facebook. Once you start the sign-up process, you will be asked to select a plan. Pricing is reasonable at $15/mo for Dropship and increases significantly to $49/mo for Pro. An annual plan saves you 23% off the month-to-month plans.
Niche Scraper is the third on this list but certainly, no slouch compared to the others. With Niche Scraper, you can evaluate any store on Shopify, review the top niches for the year or week, and scrape products from AliExpress, Shopify, or Amazon directly from the platform.
Niche Scraper provides tremendous insights and overall value for niche and product research. If you can't determine what's trending and popular using Niche Scraper, you're likely not using the platform correctly.
Niche Scraper has a free forever plan, but it has limitations. You can certainly use it effectively, don't expect to get into the weeds with it. You'll want to upgrade to the monthly Pro Membership once you get started and gain momentum in your research. The Pro plan costs $49.95/month. An annual plan is priced incredibly at $199/year, which gives you 6-months free.
Regardless of the tool that resonates most with you, research the most profitable dropshipping niches to determine how to move forward with your online store. Choosing the best dropshipping niche for your skills, knowledge, and passion will better set your dropshipping store up for success.
What Type of Dropshipping Products Sell More?
Finding a dropshipping niche in which to invest your time and money is typically about products. The best dropshipping products power the best dropshipping niches. Not just the popularity but their availability, price, competitiveness, and overall profitability. Understanding the products that sell within a niche will lead you to some conclusions about yours.
Knowing what products sell the most on Amazon is essential to get started. Amazon sets the bar for online merchants in terms of sales volume, so taking a peek at the best sellers across various niches you are evaluating can give you quite a bit of insight into choosing a niche and stocking your store. You can get started on Amazon here: https://www.amazon.com/Best-Sellers/zgbs/.
Remember that product quality is critical – ensure that everything you sell meets the high standards of quality that your target market expects. Quality products ensure minimal returns, which means happy customers and profitable dropshipping niches.
5 Top Dropshipping Product Categories
This article doesn't extensively cover the most profitable dropshipping products. You can find more info in our best dropshipping products article. But to help find the best dropshipping niches, you need to know where the biggest opportunities lie.
1. Women’s Clothing
Women are more likely to buy clothing-related products than men, which is one of the main reasons dropshipping for women’s clothing can be profitable. Additionally, most women are looking for unique and stylish items – two things dropshipping offers in abundance. Therefore, if you're interested in dropshipping women's clothing, start by researching the niche market and understanding its specific needs.
2. Portable Audio & Video
Tech products typically do well, and new portable audio and video products are cropping up yearly with technology evolving rapidly. Younger generations appreciate the portability and style of these products and are a big target audience for any dropshipping business.
3. Beauty Products
Beauty products are one of the most popular categories for dropshipping. This is because they are high-margin and have low upfront investment, making them ideal for businesses looking to start an online store. There are various ways you can market and sell beauty products as a dropshipper – from online advertising to social media marketing.
4. Party Supplies
Party supplies are one of the most popular dropshipping niches and for a good reason! They make great gifts, are affordable, and can be customized to fit any occasion. Coming out of the pandemic, party supplies were purchased more because there were more in-person gatherings. When choosing party supplies, you must price your products high enough, so shoppers feel confident spending money on them, but not so high that you lose profit margin.
5. Pet Products
Pet products are another high-margin category that is great for dropshipping. Pet owners often pay more for quality products for their pets than for items for themselves. Plus, pet products can be customized to match the needs of each individual customer, and dropshipping them can be profitable in both large and small quantities.
How to Measure Competition in Your Dropshipping Niche
To run a successful dropshipping business today, you need to be acutely aware of who your competition is in your niche before you start selling. You can use a few different methods to measure competition, but the most accurate way is through market analysis.
This involves measuring how saturated the market is, looking at how many sellers are in the niche, and understanding their selling habits. Once you have this information, it's time to find out how they're doing and learn from them. There are a few ways to measure competition in your niche: competitor reviews, Google Trends data, spying tools, and SERP analysis. Use whichever approach is most accurate for your dropshipping niche.
It's easy to assume that the popularity of a category will likely be directly correlated to the competitive volume of sellers online. If you choose to sell within a popular niche, you'll need to understand the level of effort, marketing needs, and costs to ensure your store has staying power and can build a brand that resonates with customers.
Number of linking domains
There is no one-size-fits-all answer to this question, as the number of linking domains will vary depending on your niche and competition. However, identifying the domain authority and the level of keyword value a competitor has is a valuable way to judge the effort needed to penetrate the niche.
There's no better tool than Ahrefs for reviewing and analyzing backlinks and domain authority for a website. We highly recommend using its powerful tools for your competitive research.
Authority of competing sites
Identifying competing sites' authority is crucial when starting a dropshipping business. This can be done using Ahrefs, which will give you an idea of how much traffic they are generating and how profitable their niche market is.
Take, for example, https://www.nastygal.com/. Assuming we were looking at them as a competitor in the women's clothing niche. When we review the URL in Ahrefs, we get the following back.
The domain rank is 77 out of 100, which is strong. They have over 2 million backlinks from 22.1k referring domains. The website ranks for 350k keywords, bringing them over 3.4M monthly visits. The value of this organic traffic is $1.5 million. This is intense competition within the niche. However, you have to consider the size of the niche and the CAGR for the next few years.
According to Statista, “Revenue in the Apparel market amounts to US$1.53tn in 2022. The market is expected to grow annually by 4.92% (CAGR 2022-2027). The market's largest segment is the segment Women's Apparel with a market volume of US$0.79tn in 2022.”
With a 4.92% CAGR estimated through 2027 and the largest segment being Women's Apparel, you might still consider this niche to invest in. Still, you'd need to understand that competing will be challenging and require lots of resources; that's time and money.
Once you've determined the legitimacy of your competition, it's time to compare prices, quality, and shipping times before deciding whether to enter the market. Stay informed of dropshipping competitors so that you can stay ahead of them – this way. You'll have more opportunities to profit in this highly competitive industry.
Qualitative metrics when researching your dropshipping niche
You can measure your niche's competition in a few ways: traffic, sales, and keyword rankings. Once you gather the data from these measures, you'll better understand whether you can compete in the niche. For example, if you are seeing multiple competitors with huge volumes of traffic, a solid organic presence, and an incredibly deep backlink portfolio, chances are that niche will be challenging to compete in.
You should also consider adding qualitative metrics such as reviews and ratings (from sites like TrustPilot) into the mix. Doing so will give you an idea of customer satisfaction levels – essential when running any business online!
Taking the same example, Nasty Gal shows a 3.8 rating across 9,732 reviews on Trustpilot. Most negative reviews are about poor returns policies or customer service. This provides not only a perspective on a competitor that is qualitative in nature but also provides areas of emphasis should you decide to pursue the niche. Customer service and lavish return policies will give a competitive edge.
How to find success with your niche dropshipping business
Dropshipping is a great way to start a business that can be profitable and meaningful. To make the most of dropshipping, you first need a clear idea of what you're looking for. Once you understand the market, the products, and the viability of a niche, you can move forward with getting your online store set up.
Choosing an easy product to start with is also important – this will help minimize your learning curve while starting your dropshipping store. If you're inspired to dive deeper into dropshipping, you should choose to specialize in one particular niche. Doing this will give your business more focus and growth potential.
There are some additional ways to find success within your dropshipping business. We've outlined a few initiatives below to help grow success within your niche.
Understand your ideal customers
Before starting a niche dropshipping business, it is important to understand your ideal customer and what your ideal customer wants. Once you know this, creating a sales funnel and marketing strategy will be easier. A dropshipping store can be profitable if done correctly.
Manufacture your own product
Making your own product can be a great way to get creative and build something you design and control entirely. You can also choose to sell the product online, depending on what niches you are interested in targeting. There are many different products that you could make – from clothing accessories to homemade foods.
Yes, dropshipping is not about making your own product, but there may come a time when success is measured by the slightest of margins, and manufacturing the product might help you create better margins.
Have access to exclusive pricing or distribution
Dropshipping is a great way to start a business and make money online. One of the best things about this business model is that you can access exclusive pricing or distribution. Exclusivity is a massive advantage but not easily attainable.
When and if you get it, you can charge high prices for your products or services, making it easier for you to earn profits. The best dropshipping businesses work towards exclusivity with their suppliers.
To be successful with dropshipping, it's important to find niche markets that are growing rapidly and have a high potential for future growth. Doing research into these niches will help you identify profitable products or services to sell. Once you've identified a product or service that perfectly meets your target market's needs, you must promote it well!
Sell at the lowest comfortable price
When it comes to selling online, it's about finding the right niche and exploiting it at lower prices than anyone else. By doing your research well, you'll be able to identify products that no one is selling yet. Next, find a way of shipping the product quickly so that customers have an enjoyable experience while shopping with you. And last but not least – make sure your profit margin remains intact.
Add value in non-pricing terms
Businesses that want to succeed in today's market need to add value in non-price terms. Business owners can win over customer loyalty by offering a unique, high-quality product or service.
Good customer service should always be top-of-mind, as it demonstrates your dedication to satisfying your customers. Being up-to-date with trends and developments relevant to your niche will also help you stay ahead of the competition.
Choosing the right dropshipping niche for your skills and interests will help you remain invested, encouraging you to add value for your customers.
Understand your market
E-commerce is all about understanding your target market. You need to research your niche and find products that offer great value to them, whether it's high-quality products or unique offerings. Your brand will be better remembered for the value you provide than the product you sell.
For effective marketing, you need traffic and conversions – which can be achieved by optimizing your website for search engines, posting on social media platforms like Facebook and Twitter, paid advertising, and email marketing campaigns. Knowing how to reach your buyers is critical for success.
Search engine optimization and keyword research should be a huge part of your market research effort. The more keyword volume, the more valuable a keyword is to gaining long-term success through organic traffic.
Work with good dropshipping companies
It is important to work with dropshipping companies you can trust. Look for companies with a good reputation and long track record of success. Choose a niche you are passionate about and has the potential for high growth. Do your research before signing up – understand their terms and conditions first.
The best dropshipping niches typically have lots of supplier options so spend the time to research as many as needed to ensure you're selecting the supplier that meshes well with your business strategy
Related Article: The Best Dropshipping Suppliers
Dropshipping niches to avoid
Before you start your dropshipping journey, it's vital to understand the niches and products to avoid. There are nuances to each category that might make it more challenging to succeed. Some of the most notable categories to steer clear of are listed below.
Furniture – Anything heavy will be a shipping nightmare and a customer service drain.
Illegal or Illicit – Adult products, gambling, tobacco products, anything that could be over-scrutinized. Additionally, many of these categories cannot use paid promotion on platforms like Facebook and Google Ads.
Firearms & Weapons – There are too many insurance and legal consequences even to want to test this niche.
Fragile Products – A tough one to determine as being a niche to avoid, and it will depend on the dropshipping partner you have as to the quality of the shipping and the limit of damage.
For a more in-depth review of dropshipping categories to avoid, check out our Best Dropshipping Products article.
Best Dropshipping Niches Wrap-up
You want your online dropshipping store to succeed. Having the right business strategy involves aligning your interests with your dropshipping niche. An eCommerce store is not likely to be successful if its operator has lost interest or given up too quickly because it chose the wrong niche.
It can be hard to run an eCommerce store and sell online within a niche you are not passionate about. Therefore, before you start your dropshipping venture, ensure you have spent the time researching top dropshipping niches and select the one you are most interested in pursuing.