The top dropshipping niches to avoid in 2024 are:
Niche selection is essential to your drop shipping journey, so you need to get it right if you don't want to fail. You'll need to do extensive research to find a dropshipping niche with high search volume and low levels of competition. Also, you want to pick one that brings the best profit margins.
On Reddit, Competitive-Pen-5310 says safety equipment, health supplements, and copyrighted counterfeit products. The Redditor further says fake items are “an amatuer and lousy idea” with “legal repercussions.” When selling health products, dropshippers should also list down ingredients and usage to avoid potential problems from buyers.
Meanwhile, YouTuber Myke E-Commerce points out that technological products should be avoided, too. Besides, electronics often have high return rates, competition, and quality issues. In short, meeting customer satisfaction can be a constant struggle.
Penny Chen of E-Commerce with Penny also tells her YouTube viewers against dropshipping “highly fragile and delicate items.” For instance, glassware products are “easily broken or damaged” and thus “require extra care during shipment.”
As someone who did dropshipping in 2017, I'd also warn that the business model can be really difficult. You can expect to spend a lot on ads, plus you'll often have to adjust to fluctuating supplier prices. In the long run, it really wasn't sustainable and required far too much work to maintain.
We outline 9 dropshipping niches to avoid. We also share about the most successful niches you might want to check out.
1. Copyrighted & Trademarked Products
Dropshipping copyrighted or trademarked products can lead to your store being shut down. Ignorance of trademark laws is not a valid legal defense when brands start coming after you. To legally sell trademarked products, you must obtain brand approval to dropship their items or become one of their verified retailers.
Identifying trademarked products isn't always straightforward. While some products - like Lysol or Gucci purses - are obviously trademarked, others may require more research. You want to verify the trademark status of products before you start selling them online. This due diligence helps you avoid legal complications.
Why you should avoid copyrighted and trademarked products as a dropshipping niche:
- You can't advertise on any social media platform.
- You risk getting suspended by Facebook and Shopify. Your payment gateways may even get shut down.
- You could receive a cease and desist letter and get sued.
- You'll never be able to brand a copyrighted or trademarked product.
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 the items are already trademarked.
- Double-check with the United States Patent & Trademark Office (USPTO) to see if the product is listed.
- Hire an attorney or a professional freelancer to do the patent research for you.
2. Fake & Counterfeit Products
Fake and counterfeit products are another way to fail quickly in drop shipping. Not only do you risk facing legal action from the original brand, you’re also supporting illegal operations. Additionally, counterfeit products contribute to driving up the price of genuine items.
Even if you inform customers that the products are fake, you remain liable for infringement. To protect yourself, it’s essential to only purchase inventory from reliable suppliers. Key areas to research include:
- Product reviews and star ratings
- Supplier feedback score
- Logos and trademarks
- Supplier’s other products and guarantees
- Placing test orders
Many dropshippers fail because they neglect to carefully vet their suppliers. Selling counterfeit products often leads to a high volume of returns and negative reviews. Moreover, it puts you at risk of losing money and can shut your business down in the long run.
Why You Should Avoid Fake & Counterfeit Products as a Dropshipping Niche
- You're selling sub-par, potentially unsafe products is poor business practice.
- You're likely to face numerous returns and negative reviews.
- Counterfeit goods do not comply with Consumer Product Safety Commission (CPSC) guidelines.
- Offenders can face fines of $1.25 million to $2 million, with up to 10 years imprisonment.
- You’ll also encounter issues with payment gateways and social media accounts. This can lead to further disruptions in your business.
3. Lifestyle Products
Lifestyle products are part of a niche with the highest variety of categories. Products like colanders or kitchen accessories are all too common. Stores like Target or Walmart offer these products, which reduces the need for customers to shop from your dropshipping store.
According to BrandsGateway, you can expect a lot of competition in this niche. There are literally tens of thousands of these stores popping out every day, trying to make quick profits. Therefore, for a beginner dropshipper, it would be a real nightmare to start a business with so many rivals around you.
Why You Should Avoid Lifestyle Products As A Dropshipping Niche
- The products are too generic, leading to low customer demand.
- There’s little potential for impulse buys, as the items are easily available in physical stores.
- Customers rarely form an emotional connection with these types of products.
- Brand loyalty is strong in this niche, making it harder for new dropshippers to compete.
4. Clothing & Shoes
The clothing and shoes niche may appear attractive but is highly challenging. You’ll be competing against established retailers (such as H&M, TJ Maxx, etc.) which dominate the market. This niche is also notorious for generating negative reviews. Plus you'll have to deal with frequent returns due to sizing or quality issues.
In fact, a Radial report says apparel has an estimated return rate of 40% to 50%. This can cut into the potential profits of your dropshipping business.
Why You Should Avoid Clothing & Shoes As A Dropshipping Niche
- High competition from established retailers
- Frequent negative reviews
- High return/refund rates due to sizing issues
- Prone to 'bracketing' behavior, leading to higher return volumes
- Poor customer satisfaction due to inconsistent sizing and quality
However, there are a few ways to build a profitable clothing and shoes store online. Consider the following strategies:
- Start in a mid-level niche. Have at least 40 products (ideally 80-100) to allow for upsells and cross-sells.
- Fully develop each product collection page by offering detailed information and visuals.
- Differentiate your store by using unique, high-quality photos.
- Focus on strong branding and marketing techniques to stand out.
- Include sizing charts and other tools to minimize returns.
- Consider selling print-on-demand clothing to offer customizable options.
- Create a Facebook fan page to build and grow your brand presence.
- Work with influencers strategically and curate your product offerings carefully to enhance appeal.
5. Watches & Jewelry
Watches and jewelry dropshipping stores can be hard to run. Online and digital sales comprise 5% and 10% of the global jewelry market. However, brand loyalty plays a significant role. Competing against established names like Tiffany or Mejuri is a major challenge.
“Brands matter a lot in the watch world,” points out a watch enthusiast on Reddit. “Buying from specific brands really say something.” Besides, most buyers trust big brands more than random dropshippers they find online.
Moreover, trying to sell a $3 watch for $20 is not sustainable. Instead of dropshipping, a better idea is to sell handmade or unique pieces on platforms like Etsy and ArtFire. Customers in these platforms are often looking for one-of-a-kind watches and jewelry pieces they can buy online.
Why You Should Avoid Watches & Jewelry As A Dropshipping Niche
- The market is oversaturated with similar products.
- Quality issues often lead to negative reviews and customer dissatisfaction.
- Social media ads offering "free" watches (just pay shipping) are frequently perceived as dropshipping scams.
- Customer service challenges are prevalent, including returns and complaints.
- Buyers want sustainability and will question where you source your products.
6. Vitamins & Supplements
Unfortunately, this is a big downside to drop shipping and why a lot of people ultimately quit the business model. There are ways you can make money with this particular niche, but you need to know the legal requirements. (Specifically around product descriptions, claims, and inventory standards).
Vitamins and supplements should also be avoided by dropshippers. Customers often have unrealistic expectations regarding vitamins, supplements, and weight management products. When high-ticket items fail to deliver the desired results, you’ll likely face a surge of returns and negative reviews. This can quickly lead to your store being shut down. This is a major downside to dropshipping, and it’s a reason many people eventually quit the business model.
While it’s possible to make money in this niche, you must be familiar with the legal requirements. You must be knowledgeable about product descriptions, claims, inventory standards, and regulatory policies. For instance, the Federal Trade Commission (FTC) has stringent guidelines on how health products can be marketed. Failure to comply can result in hefty fines.
Why You Should Avoid Vitamins & Supplements As A Dropshipping Niche
- Unreliable suppliers can cause problems. If there’s an issue with the product, you—not the supplier—will be held liable.
- False claims made about the products can lead to advertising restrictions.
- The market is oversaturated with similar products, making it difficult to stand out.
- Unverified claims can quickly result in your social media and advertising accounts being shut down.
- Food and Drug Administration (FDA) approval is required to legally sell health products in the US.
- Health claims on packaging are illegal in some countries.
Of course, it's still possible to find success in the vitamins and supplements niche. For example, you can:
- Comply with label and advertising requirements.
- Ensure your products are safe, effective, and sourced from reliable suppliers.
- Know the specific legal requirements for every country you plan to sell.
- List the terms of use (particularly age, allergies, or side effects.)
Alternatively, you can consider creating a private label or becoming a retailer for a trusted brand.
7. Electronics & Computer Products
Electronics and computer products are an expensive niche. So you'll need considerable capital to buy and test products for quality assurance. Additionally, you'll face resistance from US buyers who may be hesitant about purchasing products manufactured in China.
On Reddit, QP_marketnetwork shares that electronics are potential fire hazards. Shipping can also be tricky since gadgets are sensitive. Your customers may receive damaged or defective products.
Why You Should Avoid Vitamins & Supplements As A Dropshipping Niche
- This niche is prone to scams.
- There is a high risk for customer returns.
- You'll lose money covering the cost of product returns and shipping.
- Negative reviews frequently arise from poor-quality products.
To succeed in this niche, conduct thorough market research. Focus on selling high-quality inventory. Run Facebook ads and incorporate sales funnels to boost sales. Use persuasive copy that highlights how your products solve specific problems. Niche down by selling accessories like earbuds, speakers, or LED lights. Offer bundles and upsells to increase profitability. Finally, leverage high-definition imagery and user-generated content to enhance your listings and advertisements.
8. Fragile & Heavy/Bulky Items
Fragile and heavy/bulky items are often unprofitable due to slim margins. Shipping fees can also be a significant challenge when dealing with these products. In some cases, rates can cost higher than the items' prices. This could deter potential customers from making the purchase.
Moreover, shipping fragile products - such as dishware, figurines, and glass - can pose difficulties. Some may be damaged during transit, which means you or your supplier will have to replace the order or refund the buyer. This can further cut into your earnings. Plus dissatisfied buyers may also leave negative reviews, which can damage your online store’s reputation.
One Reddit user says dropshippers are better off avoiding this niche entirely. “If the product is fragile, don’t sell it,” writes nehilomusic. “Try to avoid every roadblock that can possibly be in your way before selling anything.”
Why You Should Avoid Fragile & Heavy/Bulky Items As A Dropshipping Niche
- Competitors frequently undercut price points, making it harder to maintain profits.
- Long shipping times increase the risk of damaged goods during transit.
- A high volume of returns and negative reviews can quickly impact your store's reputation.
- You rely heavily on your supplier to package products correctly, adding another layer of risk.
9. Seasonal Products
Seasonal products may seem enticing. However, they often fail to provide consistent profit margins. Case in point, you’ll need to constantly find winning dropshipping products for each season. Plus, you'll often have to work with new suppliers for different items.
Taking this route also means you can only sell your products for a few weeks or a couple of months at best. For example, Halloween costumes and Christmas decorations are only in-demand during their season. You have a short window of time, so dropshippers often have to spend expensively on advertising to gain traction for their products.
Meeting customer expectations when it comes to shipping times is also a must. You want to get your products to your customers hands as soon as possible. Failure to do so can lead to more problems, such as return and refund requests.
Why You Should Avoid Seasonal Products As A Dropshipping Niche
- Short selling period that typically ranges from 10 days to 2 months.
- Unstable sales volume can lead to inconsistent profits.
- High management requirements to keep up with sourcing and sales.
To make money with seasonal products, you need a strategic approach. Start by incorporating seasonal products as supplemental offerings alongside your core product line. Get creative by developing toy versions of your products, such as pairing professional tool kits with children's versions. This can appeal to gift-givers and hobbyists alike. Expand your product line by sourcing festival or party-specific variations of your existing items. If you're selling candles, try offering Valentine or Easter-themed ones in your store.
To maintain visibility throughout the year, do keyword research to identify relevant search terms. Use this information to run targeted PPC campaigns on your seasonal items. This multifaceted strategy can help you capitalize on seasonal demand while strengthening your store's presence and diversifying your revenue streams.
How To Find Out If a Dropshipping Niche Could Be Profitable?
You can find out if a dropshipping niche is profitable by doing thorough research. You want to check out what the competition is doing and which products are current bestsellers in the market, which could change from time to time.
To find a profitable niche, Ben Knegendorf and Jon Warren of Dropship Breakthru encourages dropshippers to:
- Start by identifying the target audience, not the product.
- Serve a need by building a business that solves problems for specific customers.
- Avoiding overly competitive products.
- Choosing a niche that encourages repeat purchases from customers.
- Validating suppliers by ensuring the niche has enough suppliers and high-ticket products.
Meanwhile, Anton Kraly of Drop Ship Lifestyle says dropshippers should focus on products with an average order value of $200 to over $1,000. Dropshippers should also tap 20 to 30 suppliers to offer product variety and minimize risks. Anton also adds that targeting the upper middle class market can be the best strategy. “The upper middle class are most comfortable and most used to spending money online in our price range without needing a bunch of pre-sale and post-sale support,” he points out.
What is the Most Successful Dropshipping Niche?
The most successful dropshipping niche is one with a passionate community. Find a group of people you can target who will spend the money to own the latest item or solution-based product. You can also focus on trending things that aren't easy to find or products with a low-turnover rate. However, you want to pick the right niche with a ton of products. Then you can offer bundles or cross-sells and increase your customer lifetime value.
The key to success in dropshipping is finding popular niches with in-demand products you can sell right now. So you need to consider a few things like:
1. How Do I Find Popular Niches?
You can find popular niches by using Google Trends and searching relevant keywords. Pick a steady niche that offers a lot of product categories that can sell consistently throughout the year.
You can also check out TikTok Made Me Buy It to see winning product ideas and top sellers online.
2. What Can I Sell That is in High Demand?
You can sell items in high demand that don't have brand loyalty attached (like cell phones). Instead, look for dropshipping products that:
- Solve a specific problem
- Improve a person’s quality of life
- Save time or effort
- Are hard to find locally
3. How To Price Dropshipping Items for Maximum Profits:
You can price dropshipping items for maximum profits by using this formula shared by Mario Martinez on the AutoDS YouTube channel:
Dropshipping Profit Margin = Income - Expenses ÷ Income x 100
"Make sure you include all of your expenses no matter how small ," adds Mario, emphasizing the need to take subscriptions and other costs into consideration.
On average, dropshipping store owners earn 10% to 30% profit margin. In any case, you want to find a product that attracts high sales volumes to maximize your profits.
How To Check If a Dropshipping Niche is Saturated?
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, or complimentary product ideas.
Google Keyword Planner
Niche and product research starts with keyword planning, and you're looking for search terms with lots of variations and words with high search volume. But 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 a profitable dropshipping niche and product selection. For example, you can research:
- Interest over time
- Top & rising search terms
- Where people are searching from (geographical location)
- Seasonality
Take advantage of high search volume and find niches with a lot of accessories or products that need to be reordered (to secure recurring customers) because these are some of the best products to sell. You also want to pick niches with lots of customer demand and room for expansion. (Then you have a better chance at choosing a profitable drop shipping niche).
Is Dropshipping Saturated in 2024?
Dropshipping is not saturated in 2024 as a business model. However, certain product niches could be. Still, the business model should still work for e-Commerce sellers who:
- Are digital marketing experts
- Focus on less competitive niches
- Start with a sufficient budget for product testing
- Avoid easily accessible suppliers
- Have a long-term mindset to build a business
- Don’t just try to copy what dropshipping influencers are teaching
The success of a dropshipping product depends heavily on the digital marketing strategy for promoting the product. Dropshippers that try to use the same marketing channels to promote the same products as everyone else are less likely to succeed. Moreover, dropshippers should avoid heavily competitive and saturated product niches to increase earning opportunities.
Why are Saturated Niches Not a Good Idea?
Saturated niches aren't a good idea for dropshippers. First, consider that the industry is super competitive. Hundreds of new sellers enter the market every day because of the low barrier to entry. Moreover, the business model already has razor-thin profit margins. So picking a saturated niche is usually a sure way to fail as a dropshipper.
In 2024, dropshipping is hard enough without trying to break into a market already tapped by other dropshippers. Not only do you need to have a better offer, shorter shipping times, and a high-quality item.
Saturated niches are best avoided unless you are a master at video ads, ad copy, and marketing. But even then, you're up against a ton of competition, so it might not be worth it.
Why Local Lead Generation is a Better Business Model Than Dropshipping
While it's still possible to make money from the right dropshipping niches, you'll also have to consider its disadvantages. It is definitely not a get-rich-quick scheme as it may take at least 4 to 6 months before you can see any profit. You need to take the time to learn the business and become a good marketer. You also need to constantly look for winning products and reliable suppliers.
This is why I personally prefer local lead generation. As a former Shopify dropshipper myself, I found the whole business model to be difficult. The low profit margins wasn't encouraging, plus I had to invest a lot on Facebook advertising to attract sales. Fluctuating supplier prices also hurt potential earnings, so I eventually decided to venture elsewhere.
I eventually stumbled upon local lead generation, which has been the best decision for me. With lead gen, I don't have to worry about finding trending products online. All I have to do is build niche-specific websites from scratch, rank them on search engines, and then rent them out to small business owners. I could target, say, "towing San Francisco" and make money from the leads once my website achieves top Google ranking.
With numerous niches to explore and over 41,683 ZIP codes in the USA, the possibilities are endless. There are no risks of saturation. Each ZIP code presents a market full of sub-niches and untapped opportunities.
Local lead generation is just more lucrative and scalable than dropshipping. It has allowed me to work less while earning $500 to $3,000 from each of my sites. Today, I earn up to $52,000 per month with little or no maintenance work required from most of my sites. I also earn from running a coaching program with over 7,500 students and counting. If you want to be a lead gen master and learn about our proven 3-step repeatable process, get in touch with us.
