There are few ways to really succeed in the dropshipping industry without doing a lot of market research and keeping it up to date. Well, spoilers, there is one. It’s at the end of this article.
Rule one – don’t go into dropshipping without doing your homework.
Where do you start? Begin with developing a detailed market profile. This is, frankly, an art that we can’t explain in a single article. You need to know your potential customers, what they need, and what they might want to buy. Once you know that… well, you know what to sell.
Dropshipping market research isn’t all mysterious and complicated. A good tactic for getting useful data quickly is to determine five key demographic factors for your market:
- What country or countries are they from?
- How educated are your potential customers, on average?
- What sorts of lifestyle do they lead?
- How do they like to shop?
- How do they like to pay?
Once you know that, you can begin to think about what kinds of products your market wants to buy.
Dropshipping businesses live or die by the products they offer
Ultimately, the success of your dropshipping business will depend on many things. However, the choice of which products to offer is easily the most important one you’ll make.
Simply put, if you choose the wrong products for your market, you cannot succeed. That’s where doing your dropshipping market research comes in.
Understand your competition
In the same way, you have to know who you are competing against. If you are going to serve exactly the same market, then by golly, you had better do it better. To massively oversimplify the strategy, you can either pick a slightly different market and specialise your business to serve them better than the competition, or you can attempt to do a much better job serving the exact same market. That second route won’t be easy.
Get to know what products and buying experiences your market wants.
Buying today is not just about getting the right thing for the lowest price. Arguably, it never really has been. Shoppers today want ‘a buying experience’. They know there are probably 200 retailers selling the exact thing they want, and all of them will be within a few percent of the same price. That means they’ll be choosing who to buy from based on more ephemeral factors. The buying process has to be rewarding. And there are many different ways to achieve that.
Dropshipping Market Research ‘musts’ – pricing, margins etc.
All that is not to say that price isn’t important. In the end, you will be running a business, and businesses have to run at a profit. You have to understand all of your costs – product, shipping, your salary, and that of any employees you have, etc.
If you do the dropshipping market research and it tells you that you can’t sell ‘item x’ for more than £1.29, you have to seriously consider whether £1.29 will actually make that sale profitable for you.
This decision can be nail-biting, and you won’t always get it right.
Or… there is the easy way. Partner with Armaan Resales.
Of course, we are the answer. This is our blog. But seriously, Armaan’s makes millions of products available to you and can offer a great deal of advice about how to find a market, how to understand it, and how to be responsive to its needs.
Partnering with Armaan’s doesn’t completely remove the need for dropshipping market research, but it certainly takes the pressure off.
If you’d like to know more, contact us today.