Product Research for Shopify Dropshipping: 6 Step Process For Success
Will dropshipping still be profitable in 2021?
The industry is set to gross $150 billion USD in 2020.
But the way the industry works evolves constantly and at an accelerating pace.
Progressive dropshippers are more and more turning to specialized stores (niche and one-product stores), private labeling, and creating serious and trustworthy brands.
However, one thing has stayed a crucial part that determines whether a store is going to be successful or not – finding the right products to sell. That’s where it all starts. In this article, we’ll go through the steps of effective product research and validation of new product ideas and show you some main points where you can drastically save your time and money.
AliExpress Product Research
AliExpress is an unavoidable place when it comes to product research and product testing. It’s a mine of hidden gems, but also a place where you can bump into unreliable suppliers and poor quality products. Let’s see what are the main signs to look for and tools that can help you in researching the products on AliExpress.
1. Choose a niche or one-product store
Start by narrowing the search to a certain niche or even a micro-niche. You can choose a wide approach (e.g. Sports equipment) or be more specific (e.g. Hiking, Yoga…). Creating a niche store has many benefits since it allows you to experiment more, test different products, build a brand, and it creates opportunities for upselling and cross-selling.
While there’s no right answer on which niche to choose, here are the basic criteria that will tell you whether some niche has dropshipping potential.
Niche with a high demand
There are various ways to check if and how many people are showing some interest in a niche or a certain product:
- Google Trends. – just type in the keyword and Google Trends will show you the volume of interest over time. You can also use it to compare different niches as well as to find target markets where that niche is searched a lot.
- Social Media – check how many theme pages are out there on Instagram and what engagement they have, search for Facebook Groups and Pages, surf Pinterest… All that will also give you an insight into the popularity of the niche.
- AliInsider Niche Analyzer – one of the features that AliInsider Product Research Tool offers is to analyze different niches, their profitability, and dropshipping potential. Simply type in the niche name in AliInsider list with 30.000 best-selling AliExpress products and you’ll be able to see what percentage of those products are from that niche, how many products are sold each day, and how much money dropshippers make.
It’s always advisable to choose niches that are trending during the whole year and not only in a specific period. New Year decoration or swimsuits can definitely make you some profit when those seasons come, but if that is the only thing your store relies on, the rest of the year will leave you with little or no sales at all.
Approachable target group
When thinking of a good niche for dropshipping, besides high demand, it’s very important to have an idea of how you can approach your target group. Do they use Social Media, which platforms exactly? Are there any theme pages and influencers that you can contact for promotion? All that will tell you how easy or expensive your promotion could be.
The niche you’re familiar with
Even though your interests don’t influence the number of sales, the whole business would be more natural and enjoyable for you if you choose a niche that you’re familiar with. You’ll deal with customers that you understand better, you’ll know what kind of products they might like or need, while the content creation will be much simpler.
Besides niche stores, creating a one-product store is also a good recipe for dropshipping success. One-product stores don’t give you the chance to experiment with different products, but they allow you to direct all your investments, energy, and time into the promotion of one specific product. So what kind of product should you choose then?
2. Recognize a winning product
Same as everything in dropshipping, winning products don’t have an exact formula, especially because the number of sales relies on many factors, but there are basic criteria that you can follow and you’ll be closer to picking the right products for your store.
Those are the products that are meeting a certain need for your target group. When a customer sees an ad that promises to solve his problem, he won’t ask more if he really needs it, as he might do for another pair of trousers or sweater. He knows that he won’t be facing the same unpleasantness once he purchases your product.
Different massage products are a great example since those are the ones that are stating clear: Shop now, you won’t have back pain anymore.
The next thing we ask is if this product has some unexpectable and wow characteristic, and more important – can that characteristic be presented in a short video? Can we grab customers’ attention and make them say ‘Wow I want this!’ in just a couple of seconds? A basic hat or a hairpin certainly can’t do that.
Elastic Sofa Cover
The products that add exclusivity to your offer are the ones that can’t be found in a local store or the closest shopping center. They are hard to find offline, new, atypical, and unique to an average customer, and shoppers easily get a feeling that your store is the only place where they can find it.
We always want to look for products that could be sold for at least a 250 – 300% price markup. Having in mind the expenses for advertising, shipping, and all the additional apps we use, anything less than that would keep us on the edge of making a profit. Moreover, look for products that can be sold for at least $20 since the ones cheaper than that will be very difficult to make you a decent profit.
3. Check product popularity
By choosing any category on AliExpress and sorting the search by the number of orders you’ll get the products that have a lot of sales. But have you ever been confused with the declining number of total orders that some products show over time? That’s because a few people know that AliExpress’s total orders represent the number of orders in the last 6 months.
The more valuable and precise metric than that is the product’s average daily sales. That’s where AliInsider software can be a useful tool for determining if the product is trending right now. Right on the AliExpress search page, it will show you the date when the product is added to AliExpress, if it’s not older than six months, as well as product average daily sales, so you can see how popular the product is at the moment.
Another useful sign in searching for profitable products is Rising Star validation. Rising Stars are the upcoming trends that started to sell fast but still have a relatively low number of orders. That could be your chance to pick some winners while they are still fresh and unsaturated.
4. Find a reliable supplier
Once we’ve found a product that matches winning product criteria, we want to find a supplier that has a relatively low product price, short shipping time, free or inexpensive shipping price, as well as positive reviews.
This is the place where you can save a lot of time with Ali Insider Suppliers Finder because it gives you the list of all suppliers that sell that product along with information about shipping time and price, possible countries to ship from, AliExpress price, and the number of orders.
If you want to go into deep product research, it’s always good to check Price History too, since drastic leaps in prices could indicate unreliable suppliers and you won’t be able to predict your profit, plan promotions, and discounts.
5. Keep an eye on the competition
If you want to set a competitive store, the next thing you do is checking on your competitors, which products they’re selling right now, and how they are doing it. A quick way to do so is to check competitors directly in AliInsider Chrome Extension where you’ll get all the stores that are selling that product, found by the product image. Once you’re there, look for inspiration and ideas for product descriptions, bundles, videos, etc. You can also see the date when the product is added to their stores which will tell you how new a certain trend is.
Product research shortcuts
Doing valid product research is hard work. It takes time to go through endless pages of AliExpress, analyze products, research the market, test, and fail many times before finding the right product. But don’t get disappointed too soon – let the software do the hard work for you.
By checking the AliInsider list of 30.000 best-selling products at the moment you’ll have an access to the top-performing products on AliExpress based on the real data. Once you’re there, you can search for the products that are already dropshipped by others, find Rising Stars in a click, check product saturation, top-selling countries, and more.
Shopify dropshipping product research
Hope that this article has given you an insight into the essential product research techniques and shortcuts for finding winning products. And while no one can promise you which product will be ‘the one’ for your store and how profitable it will be, by following the given steps, tracking the trends, and keeping an eye on the competition, you’re on the right road to run a lucrative dropshipping store.