Dropshipping is one of the easiest businesses for anybody to start; you need little or no experience, you don't have to invest lots of money, and you can even get it up and running while you're still doing your day job. Who wouldn't want to start a dropshipping business? Many people do, but there's a difference between doing it, and doing it well, so that you actually make a profit. A lot of people make the mistake of choosing the most popular dropship products, and think this will make them money - but it's often not the case. Similarly choosing to dropship the things that you buy personally, won't always make a profit. For your dropshipping business to succeed, you need to find a profitable market, or niche.

What Makes a Profitable Niche?

There are really three things you need in a market, in order for it to be profitable; passionate customers who have a willingness to spend money on the things the want or need, a small number of other sellers so you can compete, and a supplier who can provide you with plenty of products at the right price. If you can find all three, then you've probably found yourself a profitable niche for your drop ship businesses; but this is getting harder to do, with more and more people selling on the internet. A market may be popular, but are people spending money, or just looking for free information? Too much competition and you'll find it hard to get business without competing just on price. And there's nothing worse than having plenty of buying customers and virtually no competition, if you can't find a supplier with the right products.

Why You Need to Find Profitable Niches, Not just Products

The important thing to remember is that you are looking for a market that will make money for your dropshipping business, not just one or two profitable products. If you take the time to find markets with potential, you can build a business on supplying a range of products that will make you money, adapting and developing your inventory as your customers needs change. An additional benefit of focusing on markets, rather than products, for your drop ship business, is that you will be able to specialize. People will come to recognize you as the specialist in that market, which could bring you even more customers through referrals and word of mouth. You should always be able to find products to sell in a popular niche, but if your business relies on a couple of dropship products to survive, and demand for those items falls off, you could be in trouble.

How to Assess a Market's Profitability

So how do you tell if a niche is going to be profitable for your dropshipping business? While eBay is no longer the marketplace for dropship products that it used to be, because of the increasing competition and decreasing profit margins, it can give you a useful guide as to what markets could make money. Use tools like eBay Pulse to see what people are searching for in each category, and check out the completed listings to see what's selling, and importantly, for how much. Amazon is generally a better marketplace to sell from, and their "Movers & Shakers" and "Bestseller" lists will help you find markets that are performing well. Checking out the rankings for products you plan to sell, as well as their reviews and ant related items, will tell you if the market has potential. Other useful tools include "Google Insights for Search" which allows you to see the products that people are searching on line for now, and as far back as 2004 – so you can find what people want to buy today, as well as markets that have stood the test of time.

Finding the right niche for your new dropshipping business is important, to make sure you are going to build a profitable business. There are various places to find information that should help you choose the right products to drop ship, and while it will take a little bit of time and effort to get it right, as with anything you do properly, it will mean you're more successful in the long run.

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