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Dropshipping Niches To Avoid (And How To Choose A Profitable Niche)

May 10, 2022

A niche is a portion of the market that attracts a particular consumer. People interested in buying certain items. Things that solve a problem, meet a need, or that they want to use.

Products become saturated. Niches get competitive. You don’t want to pick niches that are too time-intensive or resource-exhausting. Because they end up not being worth the money.

Niche selection isn't always black and white. And the promise of big payouts with your niche idea might cloud your judgment. But in most cases, dropshipping niches to avoid are products with:

  • Too much emotional attachment.

  • High expectations on quality.

  • Specific deadlines on delivery times.

  • Personalized (customer needs to touch or feel it).

These situations create a significant amount of responsibility. And are a quick way to fail with dropshipping. Set your store up for success. Study this list to avoid costly mistakes and learn how you can find the profitable niches.

How To Pick The Right Niche:

  • Look For Evergreen Niches:

    Use Google Trends and search your topic. Pick products that sell consistently year over year.

  • Sell Items With No Brand Loyalty:

    Cellphones are a good example of a brand loyalty product to avoid.

  • Choose The Right Price Point:

    Your target market should be the upper-middle class.

    Households with a combined income of $100,000+ are generally happier with products. And need less customer service than low or wealthy target markets.

1. Copyrighted & Trademarked Products

Thinking about dropshipping copyright or trademarked products? Don't do it. This is one of the quickest ways to get your store shut down.

Reasons To Avoid This Dropshipping Niche:

You can't advertise on social media platforms.

Risk getting shut down by Facebook, Shopify. And even your payment gateways.

You could receive a cease and desist letter. Be faced with a lawsuit. And even get sued.

You'll never be able to brand this product.

Only sell trademarked inventory if the brand has approved you to drop ship their product. Or become one of their verified retailers. 

Ignorance isn't a legal defense. And while sometimes it's obvious that products are trademarked (think goods like Lysol, Gucci purses, etc.). You need to be sure, so you don't waste time on products already patented.

How To Tell If A Product Is Trademarked?

  • Use Google Patents. And search a broad keyword.

    If there are titles and images of your direct product. Chances are good it's already trademarked.

  • Double-check on (United States Patent & Trademark Office) USPTO to see if the product is listed.

  • Hire an attorney or professional to do a patent search for you.

Make sure you're not choosing a trademark product. And you'll save yourself a ton of money and potential headaches.

Pro Tip: Find qualified individuals to do patent research for you. And sites like Fiverr offer low-cost options.

2. Fake & Counterfeit Products

Selling knock-offs and fake products is another way to fail fast with dropshipping. Not only do you risk the legal wrath of the actual brand. Including potential lawsuits or even bankruptcy.

You're funding an illegal business. And you're increasing the price of the original product.

Reasons To Avoid This Dropshipping Niche:

You're selling sub-par products. Items that are potentially unsafe, tacky, and just bad business practice.

You're going to end up with a ton of returns and negative reviews. And risk getting your store shut down.

Counterfeit products don't usually follow Consumer Product Safety Commission (CPSC) guidelines. And they can sue you too ($1,250,000-$2 million for first-time offenders + up to 10 years in prison).

You'll run into problems with your payment gateways and social media accounts.

"The value of total counterfeiting surpassed $1.82 trillion in 2020". Research And Markets Report

Even if you inform your customers that your products are fakes. You're not protected from infringement liability.

Protect yourself by purchasing inventory from reliable suppliers. And research things like:

  • Product Reviews & Star Rating
  • Supplier Feedback Score
  • Logos & Trademarks
  • Suppliers Other Products & Guarantees
  • Test Orders

3. Lifestyle Products

General products like colanders or kitchen accessories aren't just boring. They're readily available. Customers don't have to wait for delivery. They can just go to the nearest Target or Walmart and get what they need.

Reasons To Avoid This Dropshipping Niche:

There's no desire because the items are so generic.

No opportunity for impulse buys.

Customers don't have an emotional connection with these types of dropshipping products.

Brand loyalty is prevalent in this niche.

4. Clothing & Shoes 

Stores that sell general woman's clothing usually have high levels of customer service. And with Asian sizing and questionable quality inventory. This dropshipping niche is one to avoid.

Reasons To Avoid This Dropshipping Niche:

Competition-competing against established and dominant retailers (like H&M, TGMAXX, etc.).

Countless negative reviews.

High rate of returns or refunds.

Prone to 'bracketing' (customers buy multiple sizes of the same item and then return the ones that don't fit).

"Around 50% of shoppers return clothes they have bought online because of sizing issues." Medium

But there are a few ways to build a profitable dropshipping business that sells clothing like:

  • Start in a mid-level niche. And have at least 40 products (preferably 80-100). So you can offer upsells and cross-sells.

  • Have one full page filled out per collection (product).

  • Your store has to be different (including unique and high-quality photos).

  • Establish a high level of branding and marketing techniques.

  • Invest in the extra effort (include sizing charts, etc.)

  • Sell print-on-demand clothing.

  • Create a Facebook fan page to grow your brand.

  • Use influencers. And have a strategy for curating your dropshipping products.

5. Watches & Jewelry

Dropshipping stores selling watches and/or jewelry are hard to run. And most end up being unsuccessful. Online and digital sales comprise between 5% and 10% of the global jewelry market.

But you'll be competing with brand loyalty. Trusted names like Tiffany, Mejuri, etc. that offer quality products. And because the majority of wholesale inventory is low quality. There's no chance you can charge for shipping. Especially if you're trying to sell a $3 watch for $20.

Reasons To Avoid This Dropshipping Niche:

Oversaturated products.

Negative reviews due to quality issues.

Numerous posts on social media platforms offering a free watch for just the cost of shipping. But many people consider these type of ads to be dropshipping scams.

Customer service issues.

Buyers want sustainability and will question where items are sourced.

You'll have a higher chance of success selling hand-made watches or jewelry on Etsy and ArtFire. Sites where customers are looking for unique, one-of-a-kind, or hard-to-find pieces.

6. Vitamins & Supplements

Health products are one dropshipping niche to avoid. Customers often have unrealistic expectations. Especially around vitamins, supplements, weight management, etc.

When your high ticket products don't deliver the desired results. You're going to end up with an influx of returns and negative reviews.

Reasons To Avoid This Dropshipping Niche:

Unreliable suppliers (If something goes wrong, you're liable, not them).

False claims could result in advertising restrictions on Google and Facebook.

Oversaturated products.

False claims are also a fast way to get your social media accounts shut down.

You need to be FDA-approved to sell in the USA

Health claims on the packaging are illegal in some countries.

There are ways you can make money with this niche. But you need to know the legal requirements. Specifically around product descriptions, claims, and inventory standards.

How To Be Successful With This Dropshipping Business Idea:

  • Comply with label and advertising requirements.
  • Ensure your products are safe, effective, and sourced from a reliable supplier.
  • Know the specific legal requirements for every country you plan to sell.
  • List the terms of use (particularly age, allergies, medical, or side effects.)

Intensive research and capital are a must. And you should either create a private label. Or act as a retailer for an established/trusted brand. 

7. Electronics & Computer Products

Electronics is an expensive niche. You need considerable capital to buy and test products for quality assurance. And you'll also face pushback from USA buyers reluctant to pay for products made in China.

Reasons To Avoid This Dropshipping Niche:

It's a scam-heavy niche.

Customers return/swap your product for a defective item.

Lose money covering the cost of the product plus shipping.

Negative reviews around poor-quality products.

"The global consumer electronics industry is expected to reach USD 989.37 billion by 2027". Fortune Business Insights

But dropshipping electronics can be lucrative. If you choose profitable dropshipping products. And secure a reliable supplier.

Strategies For Dropshipping Electronics:

  • Conduct intensive market research.

  • Sell high-quality inventory.

  • Run Facebook ads and incorporate sales funnels.

  • Have killer copy and sell products that solve a problem.

  • Niche down and focus on accessories (earbuds, speakers, LED lights, etc.)

  • Offer bundles and upsells.

  • Use high-def imagery and user-generated content on your site and ads.

8. Fragile & Heavy/Bulky Items

Profit margins. It's that simple. With the high cost of inventory. And outrageous shipping costs. When you calculate your expenses. You'll be lucky if you break even with this niche.

The other issue is what if it damages on the way?  You or your supplier is on the hook. And will either need to replace or refund the customer. So having a detailed return policy on your site is a must. And you need to trust that your supplier can package fragile items correctly.

Reasons To Avoid This Dropshipping Niche:

Competitors undercutting price points.

Long shipping times and risks of damaged goods.

High level of returns and negative reviews.

Reliance on your supplier to ensure products are packaged correctly.

A prime example of heavy or fragile items is furniture. It's possible to make a lot of money with this niche. But it's competitive. And you need to know a few things before you start, including:

How To Dropship Furniture And Make A Profit:

  • Niche-down. Pick a specific type of furniture. And become an authority.

  • Sell in a niche that's unique and hard to find locally.

  • Calculate potential profits (including free shipping) before you start. You need enough margin for every sale to still make money.

  • Do your research upfront. And compare the costs of a few similar products.

  • Check out your competition on Google Shopping (look at the product level-not the niche level)

9. Seasonal Products

Seasonal products don't result in consistent profit margins. You need to be constantly sourcing new inventory. And find a winning dropshipping product over and over. You might also have to find new suppliers for different products. You also have to stay on top of shipping times and fluctuating demands.

Reasons To Avoid This Dropshipping Niche:

Short selling period (10 days-2 months).

Unstable sales volume.

Requires a high level of management.

You can make money with seasonal products. But you need to know how to effectively run and automate your processes. 

Take Advantage Of Platforms Like:

Google Trend (shows you online interest in the product).

Keepa (Amazon tool that shows you buyer data. And how interested shoppers are in the product you want to sell).

How to make money with seasonal products:

  • Use seasonal products as supplemental items in your store.
  • Create a toy version of your product (example: tool kits and children's tool kits).
  • Create a festival/party version of your product (example: candles).
  • Find year-round and seasonal keywords being searched together (run PPC campaigns on seasonal items all year).

How To Find Out If A Dropshipping Niche Could Be Profitable?

Because these niches are challenging. Especially for beginners. They're good ones to avoid. But if you're willing to do your due diligence around quality control. Secure, reliable supplier(s). And research the competition. You can make money with even the ones people typically shy away from. The key is to find winning products.

Go on sites like Wayfair of check out our list of top US dropshipping suppliers to source potential suppliers. Reach out to as many as you can in your niche. Not all of them will respond. But the goal is to get several suppliers to negate the risk of supply chain issues.

And be aware of the competition. Don't worry about how many stores are selling in your niche. Instead, find successful stores selling in the niche you want to sell in.

Use tools like Alexa to research their URL. And look for their rank in the country you plan to do business. You want the number to be 100,000 or less to ensure that there's enough demand.

You also want to establish how popular they are. And how much traffic they're generating. And research:

  • Where they're getting their traffic from?
  • What are they doing well? Bad?

Don't copy. But do better. So you can grow your dropshipping business and dominate the market.

What Niche Is Best For Drop Shipping?

Niche selection is only the first step of your business. And to find the best niche for drop shipping, you need to do market research. Look for things like:

  • High-Demand Niches

  • Minimum Of 20 Active Suppliers

  • Accessory-Heavy Niches

  • Passionate Customers

  • Hard To Find Products

  • Products That Need To Be Reordered  (to secure recurring customers)

Once you have an idea of a niche(s) that fits your criteria. Conduct more extensive market research using online sites like:

Use Free Market Research Tools:

  • Facebook Audience Insights:

    Provides a snapshot of an identified target audience's interest in a specific niche. And tells you things like:

    Demographics & Location

    Activity On Paid Ads & Devices Used

    Page Likes On Categories & Topics

    You can refine your audience to research sub-niches, particular geographical locations. And complimentary product ideas.

  • Google Keyword Planner:

    Thorough research starts with keyword planning. You're looking for search terms with lots of variations. And words with high search volume.

    You also need to:

    Research exact match keywords.

    Search by location (in the countries you want to sell-not globally)

    Long-tail and detailed search terms.

  • Google Trends:

    The best platform for finding detailed insights around niche and product selection.

    You can research:

    Interest Over Time

    Top & Rising Search Terms

    Where People Are Searching From (geographical location)

    Seasonality

Take advantage of high search volume. Find niches with low product turnover. Ones that offer an opportunity for cross-sells and upsells. And are winning products. Because these are some of the best dropshipping products to sell. You want to pick niches with high customer demand. And room for expansion to make sure you're choosing a profitable dropshipping niche.

Niche selection is everything. Study what doesn't work and the trends to pick the right opportunities so that you won't have to ask is dropshipping saturated?

Conclusion:

Dropshipping is the 'number one electronic commerce retailer.' And sales from global dropshipping stores are set to hit $1655.15 billion by 2030. You're the middleman between the supplier and the consumer.

You don't need inventory. Or a large amount of startup capital ($2000-$5000). But if you understand the business model. You can make some real money with a dropshipping business.

Take note of this list of dropshipping niches to avoid. Do your product research and find a profitable dropshipping niche. And you can be successful with this online business opportunity.

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