What’s the key to a successful dropshipping business? Finding quality products for your dropshipping business.
Dropshipping has become a major force in the retail industry. There are little startup costs, which makes the barrier to entry low. It’s also easy to manage, and you can do it from anywhere in the world.
If you want to get into the e-commerce game with little risk, dropshipping is the way to go. How do you decide what products are going to sell?
Check out this guide to picking quality (and profitable) dropshipping products.
What’s Your Niche?
Is dropshipping a business or a hobby? If you answer it’s a business, then you need to treat it as such.
That means you need to start with some careful planning and plotting. You probably have a ton of ideas in your head, but you do need to get them down on paper.
Start by writing down the vision of your dropshipping business. You’ll need to research who you’re selling to (target market), and your competition.
Out of this, you should have a niche. A niche is a small part of a target market. Instead of trying to market to everyone, you can choose to market to women, men, people who are interested in travel, people who love crafts, soccer players, etc. The possibilities are endless.
The difference between targeting everyone and targeting your niche is that you’re able to speak directly to the needs of your niche. When you’re selling your product, you can understand why your niche would want it, whereas trying to sell it to everyone would be difficult to do.
These things are important pieces in creating a successful business. They will also help you pick quality dropshipping products that are aligned with your vision for the business and price them accordingly.
What Are People Buying?
Now that you know your niche and the basics of your business, you can start researching what they’re buying.
Make an initial list of products that people are buying that are trending. You’re going to use a more discerning eye in the next step to narrow that list down.
The products you choose should be aligned with your niche and the vision you have for your business. If your vision is to create a site for soccer players to buy training products, it doesn’t make sense to offer products for babies.
Pick Products that People Want (Not What You Think Will Sell)
A common mistake among e-commerce sellers is that they pick products they think will sell or just products that look fun.
They don’t do the research to tell if the products are going to sell or not. They just sell the products, hoping and wishing that they’re going to sell.
As you’re going through your initial list of products, ask yourself the following questions:
- Are these items difficult to find?
- How can you market them to your site’s current visitors?
- Are the items large or are there special shipping considerations?
- Will my niche have a need for the items?
- Will they find the items interesting?
- Why would someone want to buy this?
- Are your competitors selling this item? If so, for how much?
- Can I price this item competitively and still make a profit?
These questions force you to take a deep look at your product line to make sure they’re going to sell and be profitable.
Once you have your quality products for your dropshipping business, you have to price them. There are a number of factors that go into pricing a product. The strength of your brand, the type of customer relationship you want, and your profit margin all play a role in how you price your product.
You’re in dropshipping to make money. You have to set a price in order to make a profit. The first step is to gather all of your costs to sell the product. That includes marketing costs, administrative costs, buying the product, and any other operational expense.
Then you want to determine what your profit margin is going to be on top of that. Some products have a low profit margin of only 10%. Others have a high margin of 60%.
When you add your profit margin with your base costs, you have your selling price.
You Really Have to Know Your Customers
The reality is that pricing a product is more complex than that. You have to know what your customers are buying and for how much.
You ultimately have to know . You also want to know if they’re researching the product before they buy or if your product is an impulse purchase.
This is where the importance of your brand and the customer relationship come into play in pricing products.
Let’s take a t-shirt with a quote on it. The reality is that it’s an $8 t-shirt, but people are willing to spend $14 on because that’s what they’re willing to pay for your products to sell for.
Now, if you slap a fancy brand name like Armani on it, that t-shirt will sell for at least $50. Why? Because there’s a huge amount of status behind the brand that people are willing to pay for.
You might not have a strong brand like Armani, but there is probably something else you offer your customers that they’re willing to pay more for.
Maybe you offer incredible customer service, or you offer a money-back guarantee.
With an impulse purchase, the price has to be low enough so the customer won’t think about buying the product and having buyer’s remorse.
How to Find Quality Products for your Dropshipping Business
There’s a trick to find high- quality products for your dropshipping business. The key is to find products that you know that your niche will purchase at a profit.
That requires research and an understanding of the vision of your business. Once you have your dropshipping products chosen, you can then use Yakkyofy to help you source them in China with B2B price, to dropship them with private label and to automate all your order fulfillment process.