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By the year 2025, some estimates suggest that the dropshipping industry will be worth more than 557.9 billion US dollars. One of the biggest factors driving the growth of this vertical is the development of digital platforms that allow dropshippers to identify the hottest trends, market their products to a wide audience, and identify the best possible providers available.

With all of the above in mind, entrepreneurs in the dropshipping industry face stiff competition from both direct and indirect sources. Traditional eCommerce sites, handmade goods, and competing dropshippers are all competing for consumer attention, so savvy entrepreneurs need to use all of the tools at their advantage to increase their chances of resonating with their target audience.

This is the reason why we’ve put together a comprehensive guide to help you achieve dropshipping success by finding the perfect niche. In this article, we’ll go over the current industry outlook and give you tips on how to find dropshipping niches that produce stellar results.

How to Find the Best Dropshipping Niches

Whether you’re located in the US, Europe, or Asia, choosing the best dropshipping niches will have a direct impact on the performance of your business. Therefore, entrepreneurs that want to ensure success early on the need to focus on spotting the best specialties.

Taking the time to track new trends is important, but remember that there are many elements that will affect the product and overall customer experience. If you can’t set up a system where orders are processed and delivered quickly, your chances of succeeding will not be as high as dropshippers that have a solid mechanism in place.

This is where FindNiche and similar market analysis platforms can be extremely useful. Through these tools, you can explore different market trends and additional factors that will guide you to the right choice. While this should not constitute your entire research, these tools can ensure that you are on the right track, so you will focus mostly on making adjustments to your dropshipping business as a whole.

If you want to choose the best dropshipping niche, you have to: 

Track Trends on Big ECommerce Sites

The first and perhaps most important step is to track the different trends on large eCommerce sites like Amazon and eBay. Most consumers still shop from big platforms because of convenience and the size of their inventory. Therefore, analyzing the traffic patterns, most popular products available, and the niches with the best performance in these leading eCommerce platforms can reveal valuable insights to usher you in the right direction.

For example, since the beginning of 2020, most consumers around the world have been limited in one way or another due to the global health crisis. Although some verticals suffered due to these restrictions, consumers also focused on self-development and exercise at home. The result was a huge rise in demand for home gym equipment, sports clothing, yoga mats, and similar products on Amazon and other sites.

Dropshippers that are able to analyze these trends would identify these products before the demand increases, allowing them to set up effective campaigns that reeling in more customers once the demand wave hit. Furthermore, this allowed these dropshippers to establish the best deals and find providers that offered the best prices, allowing them to stay more profitable for longer.

Follow Influencers in Your Field

One of the best ways to identify different trends before they are obvious is to follow influencers in the fields you want to focus on. Influencers have a significant amount of power over consumers because they not only highlight new trends, but they also start these movements by bringing attention to innovative products and solutions consumers would not know about otherwise.

Dropshippers should always choose a relevant influencer, for instance, businesses that specialize in women’s clothing should follow fashion brands and similar influencers. 

However, it’s important to note that there are different types of influencers, so you need to research each option carefully in order to find the right fit. You want to follow an influencer who is creative and engaging, but that also avoids controversy. Getting negative attention will not yield a loyal base of followers, so you should avoid taking tips and ideas from an influencer who publishes insensitive or potentially offensive content.

It’s worth noting that micro-influencers are also gaining a lot of traction with consumers. Micro-influencers have between 500 and 5,000 social media followers, which is a relatively small base. However, because most micro-influencers avoid paying for traffic, their audiences are much more engaged, so getting feedback from these users is much more valuable than larger samples.

Evaluate the Competition

Through FindNiche and similar tools, you can analyze what your competitors are doing and how well they’re performing to get a good idea of the potential of a specific niche. You should also pay close attention to how competitive each industry is. For instance, you should see how many Shopify stores are selling the products you’re interested in and decide whether you want to join the fight for the top or focus your efforts elsewhere.

What’s more, FindNiche allows you to directly sort products depending on how competitive they are. You can choose between “High,” “Medium,” and “Low” competition and browse through the selection of products that are available. This is a great way to find a niche if your specialty is too competitive or if you have not found one yet because you can see a wide list of options that have the competition level you’re most comfortable with.

In parallel, if you are interested in Amazon product research, you can refer to the Best Sellers on Amazon to get some ideas, or you can apply some tools, such as AmzChart. It does not have a specific filter about competition, but you can analyze the winning products on Amazon based on the Best Seller Rank, star ratings, reviews, and other indexes. It’s a free tool, so it would save your time and money to get some ideas about the best dropshipping niches. 

Consider Shipping and Other Logistics Elements

In addition to the products, trends, and influencers, there are dozens of other logistical elements that may and will affect the performance of the products you sell.  Comparing the price and quality of each product are good places to start, but you’ll also want to explore the shipping options available. 

For instance, if you’re getting products from Alibaba, shipping to the South American market may take months, which would increase turnaround and force you to go a long period without getting a return on investment.

Likewise, your customers may experience delivery issues if you choose a country with strict import regulations. Instead of having to return money to your customers because your products are stuck in customs, do your research and only sell products to certain areas.

Read Consumer Patterns to Predict Which Niches Will Perform Best

Reading consumer patterns takes a lot of practice and there is no one-size-fits-all solution. Entrepreneurs have to examine local, regional, national, and global factors to determine which niches will perform best.

A great example would be some home fitness and entertainment equipment during the global health pandemic. Since the global COVID-19 outbreak began, people have to keep staying at home. To kill time, there has been a huge demand for home workout tools, DIY materials, and similar products. According to the data from FindNiche, they were once in the top sellers with a large number of orders. Undoubtedly, dropshippers that identified these trends early on were able to benefit from the surge in demand. That said, it’s important to remain ethical and avoid overpricing products as this is not a sustainable business strategy.

Learn more About the Best Dropshipping Niches Today

Entering and establishing yourself in the dropshipping industry may be challenging, but knowing what steps to take can help simplify the process and increase your chances of success.

The tips above should help you identify the top dropshipping niches in 2020 and allow you to set up a successful Shopify store. Having tools like FindNiche is crucial for your success, but you should also evaluate any other factor that may potentially affect the performance of your campaign.

If you want to learn more about finding the best dropshipping and eCommerce niches, follow our blog or contact the team at FindNiche today for more assistance.