Hey, guys. Trevor here with eCommerce Paradise. Welcome back to the Ultimate Guide to Drop Shipping. This is video number four, Picking Products to Drop Ship, so this video is all about choosing your niche.
The last video where we were talking about finding the best drop shipping suppliers was more about market research, finding your competitors, finding your suppliers, and getting niche ideas. This is all about going through those and actually choosing the specific one you want to choose, and this will make or break your business. So take this slowly, and go through it all the way. Don't skimp on this part of the process, okay?
So with that said, I think it's really important that you consider, number one, that you don't choose your niche based on you passions, that you actually choose it based on profitability. And this all goes in line with your research that you've done. So you should've done a lot of research to find out which products are expensive, which products are in line in the right price range, and which products match all the other criteria that I gave you in the last video.
And it's important to note that even though there might be tons of competition that a niche definitely is profitable if there are competitors, right? So don't feel like because there's too many competitors that you won't be able to compete. In fact, I show you in the drop shipping master class, and in this drop shipping mini course, how you're able to compete with your competitors, even if they're really big online stores. And the number one thing is building a niche-specific site, right? And that's what I teach in the drop shipping master class, how to build niche-specific stores.
So with that being said, let's get into how you're going be able to set yourself apart when you choose your niche, okay? So you might have some ideas. You might've narrowed it down to 5 or 10 different niches, and at this point, you really want to be sure that you're going to be able to set yourself apart. So here's a few suggestions on ways you can look forward as you build your business to be setting yourself apart.
Number one is to actually create your own product. Creating your own product is a great idea. You can do it now or you can do it later. It depends on your capital abilities. So if you have money to invest, like a few thousand dollars, consider actually doing research beyond just retailers, but looking at what are the best-selling products in you niche, right, and then actually going to alibaba.com and researching what the cost is to get that similar product directly from China. And what are the liabilities involved as well?
And then if you can consider that as an investment, then, and you think it's worthwhile, then you can actually import that product to a fulfillment warehouse in the United States and sell it either on Amazon or Shopify or Ebay. And then you can ship it direct, have it shipped directly to your customer from the fulfillment warehouse. So you'll still be doing drop shipping. That's a great way to set yourself apart, create a brand name, and have other online retailers actually sell your product later on. You can start that way, or, like I said, you can just do the internet stuff as an online retailer and grow into that later on when you feel comfortable and have the capital ability to do that.
Number two, getting access to exclusive distribution or some sort of exclusive pricing is a great way to set yourself apart because, obviously, that way, you're going to be able to compete better in the market place and have more profits, right, so that you can grow your business more.
That's very difficult to obtain, however, so you're going to have to come up with a really great sales plan for the distributor and actually follow through on that and show them some real numbers in order to get them to want to commit to that, right? And if they need marketing, if they help with marketing, and you can do that for them, and you actually come through, and you get some really good sales numbers for them, then you should ask for exclusive pricing or exclusive distribution.
You can turn a supplier that likes to approve anybody into a supplier that only approves select retailers by telling them you'll do more to sell their products if they give you exclusive pricing and exclusive distribution.
All right. Next one is to actually sell at a lower price, so, obviously, with MAP pricing, which means Minimum Advertised Price Policies, which we work with as a online retailer in the the eCommerce Paradise Academy, the thing about that is that you can't sell below that price. But you can offer discounts, limited-time, expiring coupon codes. And I highly recommend doing that.
So the way you do that is you can set a coupon code on your whole site. Or you can set a coupon code on specific products. And people use that in check-out. And they get a lower price than what they would've had to pay somewhere else, right?
And that kind of a thing is awesome to do because it will win you customers. You have to be careful that you're not selling, giving away too much of your profits but that you give away just enough to keep that customer. So a good way to do that, of course, is look at the competitors and see what they're doing in the market place.
Next one to add value to your business to set yourself apart in your niche that you choose is to add value in non-pricing terms, so think about free gifts that you'll be able to give away or digital products that you'll be able to give away along with that physical product that they buy from you. So that kind of stuff is really important to understand because you'll be able to actually gain a lot more customers using those methods.
Another great way is actually adding value via content, so if you have a niche that has a lot of questions, common questions, and stuff like that, you can make blog posts, blog posts based on how-to keywords in your niche. And that kind of stuff will really help you sell products in the long run.
There's even apps in Shopify that I cover in the course that you are able to put guides and how-to blog posts within product pages, and that way people will read them and trust you more and be willing more to buy from you, as opposed to a competitor that doesn't teach them.
All right, and then always think about getting high-quality product images. Is it a product that you're going to be able to go and see in person and take really good high-quality images of?
If the supplier's in the US, then chances are, you can some how get to their warehouse, and they'll have demo products available in their warehouse. Or they'll be at a trade show somewhere. You can go in person and take high-quality images of their products. You'll be able to set yourself apart for the competition a lot better that way, so make sure it's something you'll be able to do that with.
All right, and then the next one is a product that has a lot of components and customization features and is confusing. All these types of products are difficult to sell online, so the competition will be less. And it also gives you a ability to set yourself apart from the competition if you're able to easily distinguish between the different components and parts and options available. And if you can create your site into some what of a comparison website, with lots of content about how you can make that decision better, then they're more likely to make that purchasing decision with you.
All right, then any product that has a technical setup or installation, basically, you can offer services to do that for them. So there's things like white-glove delivery services. And those are in the hundreds of dollars. And so anything that's in the hundreds of dollars, you'll be keeping a 20% margin on usually. So that can equal out to a great boost in your revenue right there. So any product that has that kind of technical setup or installation or is much bigger, then that kind of product is great to sell online, okay?
So as far as the content goes, let's talk about different types of content really quick because I think that was a really key point I just made there. Creating buyer's guides is really important, so the keyword you should be targeting is whatever your product collection is, whatever the name is ... Let's just say skateboards ... you would make a article called Best Skateboards or Best Longboards or Best Skateboards for Street Skating, Best Skateboards for Vert Skating, that kind of stuff, and then you'll go over all the different types and all the brands and all the variables and differences between the two or three or four. And so that way, your buyers will be able to understand which one they should choose for their needs.
Developing really in-depth product descriptions is also key to making sales online and setting yourself apart, so is that niche a niche that you'll be able to dig into and figure out and do? Or can you afford to outsource that, one, or the other? It's going to have to be one or the other because you can't just take the manufacturer's product description and make a business out of that. You have to create your own unique product descriptions.
In the course, by the way, I teach you how to outsource those and how to optimize those descriptions listings to make the most sells, so that's something I do cover exactly how to do in the course.
So one thing you can do also is actually get from the supplier their specific product guides, like user manuals and installation guides and setup guides. Those kinds of things are really useful. You can upload those to your website and embed them into the product description as something your customers can download, and then you can also send them an email after the fact when they buy specific products with that user manual downloaded again. So that's providing more value.
The next thing is to consider whether this a niche that you can do in-depth product review videos and useful videos like installation videos. So if it's a product you'll be able to obtain in person and do them yourself, then that's awesome. If not, then consider taking my course because I'll teach you how to actually get into to Fiverr and outsource those videos for your customers. That way you'll be able to get a lot more leads, and you'll be able to satisfy your customers better.
All right, and then, of course, I talked about understanding helping your customers understand components and comparing them and stuff like that. But another great thing to do is to understand component compatibility. So it depends on the product. But for, say, with the skateboard, you're not going to be able to have a big skateboard drop with a small deck. So you got to tell people you have to the same-sized deck as a skateboard truck in order to fit and to skate properly. So that's something I would explain to my customers if I was doing skateboard drop shipping.
But again, skateboarding is a niche where you're not going to be able to create a massively popular, profitable drop shipping store from it because the price point is too low on normal skateboards.
All right, guys. Well, the next section of this video is going to be all about your customers, right? You have to understand who's the best customers that you want to be targeting. There's a lot of customers that are different types of people, and they should be treated differently with different types of funnels and what not and different marketing communications.
So three different types of buyers I like to really target, it depends on the niche. But some niches are hobby niches. And those types of hobbyist people are types of people that like to spend a lot of money on their hobbies. And those hobbyists are great to build a relationship with because not only will they spend a lot of money, but if they like you, they'll also refer you to all their hobbyist friends who also spend a lot of money.
So if you want to get into a hobby-style niche, just understand you'll be talking to hobbyists a lot. And those types of people are really into it. Now, the only issue with that is that sometimes they can get very technical and stuff like that, and it's okay if you aren't very technical about it. But you just have to be willing to figure out a solution to their questions, right? And the way you do that is you call your suppliers, or you look it up online yourself, okay?
The next type of business I like to work with or next type of customer I like to work with is a business. So business clients are really cool because they will need to order from your over and over and over again. If you give them a great incentive to that, and if you build a relationship with them by becoming their friend, then they'll definitely want to purchase from you as opposed to the competition or Amazon or eBay, right? So definitely call business customers.
If you have a business ordering form you, call them and ask them, "Hey, where did you find us? What made you want to order from us? We really appreciate your order, and we want to be able to set up a relationship with you so that you feel comfortable ordering from us over and over and over again."
Give them a special discount, maybe even a special account on your website. Make it really easy for them to log in. Tell them how to bookmark your website and that they can call you at any time or email you with questions. And then make sure that you're there to actually follow through on that and to help them out because those kinds of customers are super lucrative. Some niches are just strictly business-to-business niches like commercial products and stuff like that, so you'll be dealing with a lot of small businesses and large businesses in those types of niches.
So commercial industries are really great to get into. I highly recommend them. However, they do require a bit more of the upkeep on the customer satisfaction, right, because you have to actually be calling them and establishing real relationships. But if you're that type of person that's willing to do that, then this can be a very lucrative customer type for you.
All right, and the next type, which I covered in both, is repeat buyers, people that are going to buy from you over and over and over again. Those are the types of people you want to really treat well.
A lot of people call them your VIP customers. Those are the types of people that are going to bring money and revenue into your business constantly and are going to refer more people to you than anybody else. So treat those people the best. Build specific sales funnels for them. Build specific account types, specific email sequences, and all that stuff, specific videos just for them, because you want those people to keep coming back. You want to build that relationship, establish it, and build it and grow the friendship more.
All right, guys, so with that section being out of the way about the types of people you want to deal with, let's talk about considerations when you're selecting products.
When it comes to considerations, you want to think about the pricing, I think, is the most important part. Pricing is important, and I cover this in other videos that the most important thing is you get a product that's priced over $200. So if it's at least 2 to $500, that's great. Two to $500 products usually require the least amount of customer support. However, they also have the least amount of profit per sale.
So you have to have up to 10 sales per day, on average, to create a profitable business. However, if you're selling a product that's some where around $1,000 level, and you have a 20 to %30 margin, you're only going to need a few sales a day to make a profitable business because you'll be making a couple hundred to a few hundred dollars per sale or more.
So with that said, it might take a bit more customer service to sell those expensive products. But you can do a lot of automation with that. You can create FAQ pages and question and answers within the website. And you can go and get reviews. And you can do videos and stuff like that. Everything that's going to help that customer make that decision online, as opposed to having to call you, those are things that you should be doing if you want to consider selling at the higher price line.
That's really all I mess with now is products that are priced over $500 and mostly over $1,000, up into the thousands of dollars, two to three, maybe five or more.
Now, as you go higher in price, the amount of sales you get is lower, but the amount of profit is higher. So it's worth it to put in time and effort to building those listings out.
Now, understand also that when you're looking at a niche that unless they have MAP pricing, in many of the supplier's products, you really don't want to go into the niche because it's just going to be a race to the bottom. So MAP pricing should be definitely a foundation for what you're going to do.
And then, of course, there's the potential for marketing. I mean, you really want to be able to set yourself apart in that niche. If there's already a ton of websites that are doing really, really, really good marketing, it's going to be difficult to compete. But look at the websites that are your future competitors in that niche and think are they doing good marketing? Are their product descriptions filled out? Are their websites really good? Are they doing videos? Are they doing really good email sequences? Are they doing specific funnels for their customers? Are these websites professional ecommerce websites, or are they newbie, novice websites? And if they're newbie, novices, then you can definitely compete and beat them in their own game.
All right, guys, and next one is the ability to upsell accessories. So a niche should always have accessories to upsell. And you should always think about that. Every single product page should have a product option on it to add accessories. There can be multiple accessory options, and you should have pictures of the accessories, links to separate listings where the accessories are, and things like that. That's going to help the customer understand the accessories and how they benefit them and actually go ahead and purchase the accessory along with the main product.
You can be that one-stop shop for somebody in that way, and they're really going to like you and shop from you more often if you are that one-stop shop. So lots of accessories is great for a niche.
As far as returns go, you want a niche with low returns and low turnover. The problem is, is with things like fashion, is that you get a large return rate, very high returns, so you want to make sure you choose a niche that has a low return rate.
Niches with big products that are really well-built and easy to use, easy to set up, whatever, those types of products are great to sell because it's more expensive and difficult to return them. And also, if they have really good, high-quality suppliers and products that are being made, then it's less likely that they're going to be defective, right?
Industries that have been around longer, so more than 10 or 20 years, 30, 40, 50-year-old industries or more, are great like the furniture industry, for instance. All the sub-niches within the furniture industry are wonderful because they've been around for a long time, so they've had time to perfect the product quality and perfect the processes for fixing damaged products, for fixing defective products so they don't have to be returns.
Another great way to identify a profitable niche is to look and see locally if those products are available, so look at your local Walmart, REI, Target, Best Buy, whatever the niche happens to be. But if they can't find that product locally, then they're obviously much more likely to have to buy it online and have it shipped directly to their door. So that's a good way to do it.
And generally speaking, smaller products are usually better. But it really just depends. Smaller products are easier to sell, so you have more competition. And they're more likely to be able to be found locally.
In this case, I usually, actually say that bigger products are better because they're more complicated to sell, they're not found locally as often, and so you'll be able to compete better with them. And there's a lot more accessories and upsells to sell with them. So in my trainings, I usually teach you to sell big products actually. It goes against the grain, but that's okay.
So next thing, when you're trying to identify a profitable niche is measuring demand. Let's get into demand a little bit. Using the Google Keyword Planner tool is really cool. There's also a tool called kwfinder.com. You go to ecommerceparadise.com/kwfinder, link is below in the description, and you'll be able to use that tool to identify how many searches per month are being done on the keyword in your niche. So just product-based keywords, whatever that happens to be, skateboard, longboard, for instance.
You'll be able to look at the different match types of that keyword, which means if you're looking for phrase matches or exact matches, you'll be able to see different variable keywords, and it'll look at those search volumes as well.
You'll be able to see where they are higher and where they are lower, so skateboards are probably higher in Southern California, whereas, kayaks are probably higher in the Great Lakes area because there's a lot of lakes to swim around with kayaks.
Long-tail variations are really important. You have to understand that product keywords are the most lucrative keywords to be typed in, so if you want to find some product keywords, specifically in your niche, by maybe just searching Amazon, and then type those basic product keywords into Google.
Keyword Planner, you'll be able to see how many searches per month happen on those products, and if it's a lot, because people are buying them a lot, and that's a really good sign. And you should definitely check that out.
All right. The next thing to look at for a product niche selection is Google Trends. Google Trends is really good. It's important to get in there because you'll be able to understand the seasonality of a niche, and you'll be able to understand whether something is trending up or trending down. So Google Trends is really cool. Just type it into Google, and you'll be able to see your niche there. And that's really important to look at. You can see the geographical concentration, like I said, seasonality, all that good stuff.
And then you have to go and look at your competition and measure them and see how they're doing SEO-wise because it's not just about the ads, which I teach in the course how to do ads, but it's also about showing up organically for product-based keywords, brand-based keywords, product-type keywords, things like that, generic keywords, right?
So if they're doing really good for SEO, you're going to have a lot of competition. And that's okay because you're going to be able to compete with paid advertising. But eventually, later on down the road, you want to be getting backlinks and organic rankings, especially for those product-based keywords, so that you can show up and get those sales organically. And you don't have to pay for them all the time, right? So that's important.
If your competition has a lot of SEO, then you're just going to have to make sure that you understand that backlinking and creating unique content is going to be a really big part of your business growth in the long term.
Yeah, so let's get into the next section. The authority of a competing site can be decided upon easily by just looking at the Ahrefs profile of them. Ahrefs is an online tool, A-H-R-E-Fs.com, or ecommerceparadise.com/ahrefs. Link below in the description, and you can see what the page rank is for that particular website.
You can also use a website like similarweb.com. You can use all sorts of SEO websites and stuff like that. Page rank is important because if a website has a high page rank ... A niche authority site has a high page rank ... then it's going to be tough to compete. But it's also going to be lucrative to be able to find out if you can do guest posts on that website that'll link back to yours somehow, right? So that'll be really cool. And I'll get more into that later in other videos. It's not really important when you first start out, though.
So some metrics to consider is what's the quality and the useful is of your competitors. If they have a really useful website, then you can definitely extract all the different things that they do, right?
So if they do a really good job at product comparison, you can extract all the different ways they do that and import that into your own website. You can hire a VA to do that even.
If they have a really good reputation in their niche, they have things set up like BBB accounts and stuff like that, lots of trust seals, lots of expensive trust seals, just understand that, and you're going to want to mimic that with inexpensive trust seals, at least, so that you'll be able to compete.
And then the best way to really choose your niche and to finalize your niche decision is really just to choose one and get started. When it comes down to it, you'll need practice with marketing, so choose the best niche you can out of all of them and then get started.
Give yourself a few months, as a timeline, in order to launch if you're doing it part-time or a few weeks if you're doing it full-time. And then once you do that, give it a few more weeks or a few more months to grow. And the goal is to hit six figures in revenue within, I would say, three to six months of launch, okay? That means $100,000 in sales. With a high-ticket drop shipping store, three to six months after launch. That's the goal, right?
So with that said, that's what I teach in the drop shipping master class. You can sign up there with the link below, and if you're not quite ready for that yet, definitely jump into the next video where I'm going to teach you more about the drop shipping methods that I teach and how to get launched fast and how to get going. The topic in the next video is going to be all about actually starting your business.
So up to this point, you've done research in the markets, you've found competitors, you've found suppliers, and now you should've chosen a niche. So it's time to actually start your business so that you can start building your website and actually get this thing launched.
So with that said, I'll get you in the next video. And we'll see you guys there.