eCommerce Lifestyle
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The BEST Products To Drop Ship On Shopify

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Episode 318

Podcast Description:

Do you want to know the best products to drop ship on Shopify?

 

That is exactly what Anton covers in today’s episode.

 

Specifically, you will learn the framework he uses to identify profitable products to drop ship online, including what you need to be aware of if you’re doing product research for 2022.

If you’re simply looking for a top 10 list of profitable products to drop ship, you can view our video sharing the top 10 dropshipping niches of 2022 here: https://youtu.be/SK4x3taAn14

 

If you’d like more advanced training you can register for an upcoming webinar here: http://www.dropshipwebinar.com

 

If you’re interested in enrolling in our paid programs and having our team build your store for you, you can enroll here: https://www.dropshiplifestyle.com/ecommerce-courses/

 

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-Free Training Webinar + Our List of 237 Product Ideas: https://dsl.life/youtube-go/

-Shopify Free Trial: https://www.shopify.com/free-trial/dropshiplifestyle

If you liked today’s show, please subscribe on iTunes to The eCommerce Lifestyle Podcast! The podcast is also available on all major podcast players including, Stitcher and Spotify.
Transcripts

What are the best products to drop ship on Shopify? Well, that's exactly what I'm going to be covering in this episode. Specifically, I'm going to be giving you the framework that I use to identify profitable products to drop ship online. Even more than that, I'm going to be sharing some things that are a little bit different now, as we go into 2022, and these are things you'll definitely want to pay attention if you're considering building a store of your own, and of course, taking that first step of identifying profitable products to drop ship yourself.

Also, I feel like it's important to note that this video is sharing the techniques and the research that goes into niche selection, but if you're simply looking for a list of products that you can sell, go to my YouTube channel, I'll link it up below, and on a playlist linked on the homepage you can see a pretty recent video I did called Top 10 Niches for Drop Shipping in 2022. That video gives you 10 products you could choose from.

If you're new to the channel, first off, welcome. My name is Anton Kraly. My company is DropShipLifestyle.com. I've personally been building my own e-commerce stores since 2007, and I've been helping others to do the same since 2013 through Drop Ship Lifestyle. We are the only company to ever be voted best e-commerce course by Shopify, so super proud of that. Just know you're in a place where you can get quality information, and that information today is all around niche selection, picking the best products to sell.

What you are looking at here is what I look at whenever I'm researching a new niche, whether it's for myself or I'm helping a member of our program. These are the things that I like to take niches through to see if they get a green light or a red light. Are we going to build, are we going to pivot, do we need to throw the niche away and find something else? The way this works, starting at the top, is we basically just input our niche, whatever that may be. What you can do as you're watching this or listening to this is follow along and do these same tests yourself and look at the same criteria.

Now, the niche that I will research now and put through the tests is one that was actually submitted to me yesterday on a live webinar that I was hosting. That niche is kegerators. If you're not familiar with these things, they're basically mini fridges, they make some big ones too, that you stick a keg in. There's a tap on top, so you can have lots of beer at home, or maybe put one in your office, maybe I should do that. But yeah, that's what a kegerator is.

What we're going to do is look at this criteria and we'll take this potential niche idea through it to see if this would be a profitable product to drop ship on online. Now, the first thing that I look at when I'm evaluating niches is the average price. This is very, very important when it comes to drop shipping. Honestly, this is where most people fail when it comes to product selection. For me, the minimum that I want to sell products for, the price the customer would pay, is $200. When doing my research, the niche needs to have a $200 minimum average price point. If it's higher, that is great, there's really not a maximum. The higher the price goes, just know there's potentially more customer service involved. Moreso with the 2,500, 3,000 and plus from up there, that's when you start having potentially more pre-sale questions, more post-sale followups, but anything from 200 to even like $1,500, most people will just buy and never even contact you. It's very easy to run in those price ranges.

But the real beauty of these price ranges is this is where the actual money is made. This is where you actually have a real profit per sale, so you can afford to do things like operate a business, you can afford to do things like get traffic. So often I see these people that are trying to drop ship $20 products, where best case scenario, with no ad costs, they'll make $6 net profit, and then they need to figure out how to bring on buyers. It's not possible, there's not enough margin. If you want to drop ship the best products, you want your minimum price, the sale price to your customer, to be $200 or more. Okay, the next thing we look at is competition. Now, when I'm looking at competition, specifically what I want to see is how many people are selling the most popular products within said niche. Let's use kegerators again, I'll grab that niche. Then all I'm going to do is go to this website, you might have heard of before, Google.com, and I am going to search for kegerator. I'm going to take the S off, just do kegerator. Then when I am on my search results page, I'm going to click the second tab that says Shopping. Now, if you're following along and you don't see Shopping, it's because you're in a country where Google shopping's not supported. If you want to see the results where it is supported, just get a VPN on your computer and make the internet think you're somewhere you're not.

What we do to check competition ... I'll just quickly mention this, too, so many people think, "Oh, drop shipping's too competitive," or they ask me, "Is this niche too competitive?" Drop shipping is not too competitive, niches are not too competitive. Competition in drop shipping, when you do it the right way, occurs at the product level. That's why, in our initial research phase, we're looking at the product level to see how much competition there is.

What I'm going to do, and what you could do, is scroll down under the top carousel, that's paid ads, and then go to the organic product listings, which I'm looking at right here. What I'm looking at is how many stores are selling the most popular kegerators, in this example, according to Google Shopping. The first one is one store, the next one says compare prices at three stores, then we have one store, then we have four stores. Basically, what I do is go through the first page results of the organic product listings and what I want to find is 50% or more of these results being sold by less than 10 stores. That shows me how many companies are promoting the most popular kegerators on the free listings on Google Shopping. That is what we look for there, and that's how we find it. We literally scroll through the first page of organic results and that's where the data comes from.

Going back to our research here, when I'm looking at competition, remember, I want 50% plus of the first page results to be sold by less than 10 stores, okay? If we find that, then again, that's a good sign. It shows us that there is room, the niche isn't too competitive, drop shipping is not too competitive. It shows us the most popular products are not being advertised by a million stores, which makes it not impossible, but very hard to compete. That's what we look for there to continue our research down the line and keep it moving along.

The next thing that we look for, which is super important, is the demand. Now, demand means how many people are actually searching on a given month for the products that you want to sell. Now, this is important because you might find a niche for yourself. By the way, when I say niche, I mean niche-specific store, we don't sell everything and anything. I wouldn't sell kegerators and sinks on the same store because the conversion rates just plummet and it's not as profitable. When I say, again, a niche-specific store, I'm talking about one product type, not one product, but one product type per store, like kegerators.

What I'm going to do for this research, to make sure that the demand is there and to make sure that people are actually searching for these things, is use a tool that we created for Drop Ship Lifestyle. If a member of Drop Ship Lifestyle, just go to research.DropShipLifestyle.com, you can log in. The tool that I'm going to be using for this search is the Keyword Research tool. If you're not a member of Drop Ship Lifestyle, I mean, I don't know why not, go enroll, I'll link up below how you can do so, but if for some reason you still don't want become a member, if you use Google Ads and you spend a good amount of them, they'll give you this accurate data as well inside of their keyword research tool. But the only way it works there, again, is if you have an activated account with them and you spend a sizeable amount of money or else they give you really broad ranges of demand that aren't helpful.

Anyway, I'm in the tool right now. What I'm going to do is click into the Keyword Research tool and then I am to change the search location to the United States, because that's where I do business. You could change this to whatever country you plan to do business in. Then I'm going to search, again, for kegerator. I'll click Search, let it load the results. The number I am looking for is search volume, because that shows me the average monthly searches for this keyword, for kegerators here. You can see the number is 74,000 here, that is great. The minimum we want to see here is 10,000 and this is obviously well above it. That shows us there are enough people searching for these where I know, and I feel confident based on my decade plus of experience, that we can capture enough of this traffic and enough of this audience and have them purchase from us to build a sizeable business in, in this case, the kegerator niche.

Going back here just for that criteria, so you have this, again, for your own research, we want at a minimum, so I'm going to put minimum 10k monthly searches. Again, if you're a Drop Ship Lifestyle member, go to Research.DropShipLifestyle.com. If you're not a member of Drop Ship Lifestyle, I'll link below how you can get signed up. If for some reason, again, you don't want to sign up and you spend a lot of money on Google Ads, use their keyword research tool.

Okay, next test this brings us to is the evergreen test. Now, with this test, we want to see if the products are sold year round or if they're seasonal. We do not want to sell in seasonal niches, especially for a new store. I am going to pull up the website we use to check this, and again, you can use it yourself, it's a free one. This is trends.google.com. When you go here, you could simply type in the keyword, the niche, whatever product type you're researching, go ahead and press enter. Then what it shows you is the results for interest over the past 12 months. Again, for me, I do business in the States, so it's showing United States. If you want to change it, click the dropdown and change it.

But the next thing you want to change is where it says past 12 months, what I do is click on that and then I go to past five years. What that shows me is a more zoomed out view of how many people, according to Google searches, are interested in this product type, in this case kegerator, over the past five years. Specifically, what I'm looking for here is, is this seasonal or is it not, because we want to sell in evergreen niches, where people are going to buy these things in December, they're going to buy them in March, April, May, June, July. It's going to keep coming, we can have a consistent business and we can be profitable year round.

What I can see from the results here is this is very consistent. There's no big dips, it's not cyclical. It's not every year I'll get three months worth of orders, and then for nine months, sit around and wait to make money again. Now, evergreen niches, you can do some things that are seasonal in the future after you have profitable evergreen stores, but don't start with the seasonal store. It's just going to cause you stress and it's not worth it. If you can make money all year, why sell on something that is only good for a few months? Here, for evergreen, we are just going to put yes, because it's not seasonal. So far, kegerators, all good, right?

Now, the next thing that we look at are the demographics. Demographics you can get very precise with, with how deep you look and how targeted you want to go. I keep this very, very simple. When we are looking at demographics, I break this down into three buckets. Again, very, very broad. Those are the lower income customers, the upper middle class, and then the wealthy, so three different pools of potential customers that you could sell to.

For our business model, building a lifestyle business, drop shipping, something that I'm guessing you want to do if you're watching this or listening to this, then we do not want to sell to the lower income and we do not want to sell to the wealthy. Let me explain why and how to use this when you're identifying the best products to drop ship in the new year. Let's say you were doing niche brainstorming and something you thought to sell was sofas, you saw a sofa in your living room, you're like, "Oh, maybe I could sell those." Okay, good, you're doing your research now, but what type of sofa do you sell, or what types, what subsection of sofas do you get into? Well, if you look at those products on a spectrum, they're very, very cheap and they're very, very expensive and most are somewhere in the middle.

Now, on the low end, let's say those futons that you could buy at Walmart for $99 that feel like you're sitting on a piece of cardboard, yeah, those are technically sofas, but what I want you to think about here, again, for our demographic search, is who does that type of sofa appeal to? Well, most likely, college kids trying to get something for their dorm room, it appeal to lower income households. That's not who we want to sell to. It's harder to get them to buy, there's not as much profit there, and there's a higher return rate.

Now, going to the opposite end of the spectrum, we look at the wealthy. Again, sticking with sofas, let's say you sold a sofa that was custom made Italian leather, custom made to spec for the customer, that was $30,000. You could do that, and you know what, maybe that's what you want to do. You'll make money, I say it might be good, but for most people looking to build a lifestyle business, you do not want to sell that type of product to the wealthy. Reason being is because there's a lot more pre-selling that goes into it, a lot more of a conversation and really salesmanship and it's a collaborative sale, and then, once they get it, they're a lot more demanding. If everything is not 1,000% perfect, guess what? You're giving them money back or that thing's coming back to you.

We do not want to sell to lower income. For a lifestyle business, we do not want to sell to the wealthy. We want to sell to the upper middle class. This is a combined household income of about 150k, probably now even more, because inflation is just ridiculous, but with that type of income in a household, these are the people that are used to spending money online. They have disposable income, they're comfortable spending it online, it's something they normally do. These are the type of customers that will buy that will maybe not even email you ever, they just get their products and then they leave you a review or they don't, and then you're good, the sale's over. That is what we want. We want businesses that can be automated as much as possible when we want lifestyle businesses, meaning businesses that can basically allow us to do what we please, businesses that can make us the income we need without making us work 15 hours a day. Just keep that in mind when it comes to demographic. For our little example here, for demographic, I am just going to write upper middle class.

Now, that brings us into the last thing we look for when we are starting to research profitable products online to find the best, and that is suppliers, specifically, how many buyers can we find within a given niche? Now, it's more important than ever, my minimum, I'll just say this first, my minimum has always been 20, but more important than ever that you do that. Don't think, "Well, I have 15, that's close enough to 20. Let me just build this store and try to get approved with all of them." The reason being is because right now there are inventory issues with certain suppliers and it's not something where you want to have 15 suppliers to start with, eight of them approve you and then you see that two of them have inventory issues, now you have six suppliers to work with.

No, you want more suppliers. It gives you more of a chance of having products, first of all, that people actually want and products that people are buying and products that are in stock, ready to ship out in 24 hours that will get to your customers in three to five business days, because of course, we only drop ship for domestic suppliers, meaning suppliers located in the States for us, and for our members in the UK, suppliers in the UK, for our members in Australia, suppliers in Australia, and so on and so on.

Guys, that is how to identify the best products to drop ship on Shopify. For me, it's very important that all of these pieces of criteria are met. If any of them fail, it doesn't mean I just give up. It means I think can I niche sideways, meaning find something that is related, but different. For example, let's just say kegerators failed one of the tests. Let's say the average price point, it was much higher, but let's say it was under 200, then maybe I would say, "Okay, well what's similar to kegerators? How about wine refrigerators?" Then I would research that and maybe that passes all the tests. That's nicheing sideways.

Now, as far as nicheing up, an example of that would be I'm looking at suppliers and let's say for kegerators, I only found 10 of them. Nowhere near enough, so what is something similar to kegerators that's a little bit higher of a level, maybe bar equipment or home bars. How many suppliers can I find within that niche? Is that more than 20? Will that allow to pass all the tests? If it does, then that is one of the best products in the best niches to drop ship because the criteria is there. For me, and for members of Drop Ship Lifestyle, that gives the confidence to move forward, to actually do the work that needs to be done, to get the results that come.

But when you don't have this data and when you don't know the numbers before building the business, I'll tell you, I think that's why a lot of people fail before they even really start, because they're like, "Why am I working right now? I don't even know if this is going to work." Do these tests yourself. If you have that peace of mind, you have that confidence, you should be just fine.

Of course, if you want everything we do from start to finish, not just with niche selection, but market research, all of our techniques, to web design, to how we get approved with suppliers, to how we optimize our stores, to convert to how we get traffic, to how we outsource and automate, if you want all that, that is in the Drop Ship Blueprints, again, our award-winning program. If you want to learn more about that, link in the description.

As always, thank you everybody. I appreciate you, and I'll talk to you in the next one. See ya.

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