Dropshipping Business Ideas: How To Pick the Best Idea

A dropshipping business is one where the seller doesn’t actually store – or even handle – any of the stock they’re selling.

Let’s say you’re the dropshipping business. Rather than having to buy your inventory in advance – and then store it in warehouses, or your den – you simply work with several dropshipping suppliers. These suppliers own and store the stock you’re selling.

When you receive an order through your online store, you simply relay it to the supplier. They then process, package, and ship your product – directly to your customer.

Okay – so now, we’ve realized that the term “dropshipping” isn’t quite as lofty and complex as it sounds. Picking the right dropshipping business idea, though? That’s a little more complicated.

Fortunately, it’s something we can help with – so check out our three top tips for picking the best dropshipping business ideas below.

First up? Testing the waters of your prospective market with some targeted research.

Good market research can help you understand:

• Where you want to sell: domestically alone, or to international markets?
• Who you want to sell to: is there a particular demographic you want to home in on?
• Which companies you’re going up against: by understanding your competitors – where both their strengths and weaknesses lie – you can better understand how to set your own dropshipping business apart.
• When you want to get started: market research helps you identify any consumer trends or other topical factors that may affect the best time to start up your dropshipping business.

Market research takes many forms. A good (and lower-effort) option is to incentivize your prospective customers to fill out surveys.

A more expensive – but far more comprehensive – route is to set up a focus group. This involves getting a number of people from your audience segment together, and facilitating a conversation around their needs, goals, and pain points as consumers.

With your market research completed, you’re well on your way to finding your niche.

Your niche is the specific slice of the market you’ll be targeting. It includes the product or service you’re planning to sell, the industry you’ll operate in, and your unique approach to ecommerce.

Are you a premium brand, for instance – selling less stock, but for bigger prices? Or will you prefer a higher-volume, lower-margin approach to cut your competitors out of the market? To answer these questions, understanding your niche is vital.

Why is your niche so important, then? Because, let’s not forget, there are a lot of businesses out there. (In fact, the data shows that there are 100,000 dropshippers already active throughout the world.) And chances are, many of those businesses are selling similar products to the ones you’re going to be.

Your difference? The specific niche you’re targeting. Everything about your fledgling dropshipping business – from how it looks and speaks, to the products it showcases – needs to live and breathe this niche.

If it doesn’t, you’ll simply blend into the background, and that’s not a good business model! The best dropshipping business ideas have a strong niche to help them stand out from the competition!

Now, it’s time to do some more research – and really get to grips with your audience.

Audience research helps you understand the size, characteristics, and proclivities of the customers you’re planning to target. It’s designed to give you a better sense of that “ideal customer” – that archetype you conjure up in your mind when someone asks who you’re selling to.

Audience research unearths insights about your customers’:

• Demographics (their age, gender and more)
• Budget
• Interests
• Values
• Hobbies
• Geographic location
• The types of products and services they’re interested in

Once you’ve understood all this, you can draw up customer personas. These are generalized “archetypes” of your typical customer. They feature a name, occupation, age, and gender, but also key information such as each persona’s desires, needs, and pain points. Plus their social media footprint and information sources.

With accurate personas in place, you can ensure everything you do – whether that’s putting together an email marketing campaign, or writing content for your dropshipping store’s blog – appeals to at least one of these archetypes.

Still stumped as to what to sell? Fret not. Here are our top five dropshipping business ideas to inspire you – and ignite your imagination!

#1. USB Chargers

If you’re anything like us, USB chargers sit firmly in the category of “things I always need, but never seem to be able to locate.” As easily misplaced as they are important, USB chargers power a wide range of electronic devices.

An in-demand product with high margins – one source places the USB charger’s average profit margin at as high as 50%, with a sell rate of 45% – this handy gadget could be the perfect place to charge up your new dropshipping business.

#2. Yoga Mats

Namaste! Whether or not you’re an avid yogi yourself, there’s plenty of inner peace to be found for you (and your wallet) when you dropship yoga mats.

With an average profit margin of 60% and a sell rate of over a third (35%), yoga mats – along with leggings and other yoga-related paraphernalia – are a great place to start. And, since there’s already such a specific, pre-established culture around yoga, there’s already a well-defined niche waiting for you. You just have to tap into it!

#3. Wireless Security Cameras

Forget George Orwell’s 1984 – surveillance culture is already more pervasive than ever. And, while that certainly has its drawbacks, it also presents opportunities – especially for dropshippers.

With a strong average profit margin (40%) and an even more impressive sell rate (65%, according to SalesHoo), wireless security cameras are a dropshipping business idea worth zooming in on.

And, with the home security market expanding constantly, there’s plenty of long-term growth to look forward to.

#4. Pet Carriers

Dogs may be man’s best friend, but – when it comes to your bank balance, at least – there’s no better chum than dropshipping pet carriers.

A niche which offers plenty of lucrative options (dog toys, for instance, boast an average profit margin of 55% and a sell rate of 65%), pet supplies are a bankable springboard from which to launch your fresh-(and fur-)faced dropshipping business.

#5. Phone and Tech Accessories

When it comes to the world of phone and tech accessories, the possibilities for dropshippers are almost endless.

Consider, for example, the smartphone tripod – a gadget which peaked at the onset of the pandemic, but still offers a 65% average profit margin and a whopping 75% sell rate. Or phone cases – items with a 50% margin and a strong 65% sell rate.

Add to this the expected growth of the cell phone accessories market – forecast to hit almost $75 billion by 2026 – and the stage is set for ambitious dropshippers to benefit.

From pet carriers and phone cases to carriers and cameras, there are so many dropshipping business ideas out there. Our final piece of advice, though? Don’t choose what you’re going to be selling on profit margins or sell rates alone.

Yes, these are important – you need to be able to make a profit, after all! – but what’s more important is that you’re passionate about what you’re selling. The more you love (and are committed to) your dropshipping store, the more you’ll set it up for success.