Before we start looking at what makes a good dropshipping product, let’s deal with the elephant in the room. Does dropshipping still work in 2019 and you’ll be glad to know that the answer is a resounding ‘YES!’ Thousands and thousands of people are making money everyday dropshipping.
Many of them are making enough to pay the bills. Some of them are making enough that they don’t need to work anymore. A few are making so much that they get other people to do the work while they travel around the world. How’s that sound?
Having said that, dropshipping has become a slightly saturated market. That means that when you decide to start a dropshipping business, you need to be smarter than you needed to be 20 years ago.
As long as you take time doing your market research and don’t choose a niche that is too broad or too saturated, there is no reason at all why you can’t succeed as so many others have done before you. Now let’s get to the nitty-gritty and the point of this whole article.
What Makes a Good Dropshipping Product?
To be honest, what makes a good dropshipping product to sell is pretty much the same as what makes a good product to sell. There are only three criteria and here they are:
2. In demand
3. Easy to ship
If you have a product in mind that ticks those three boxes, you’re off to a great start already. Just think for a moment how many products fulfill the above three criteria. I can’t say how many exactly but it must run into the hundreds and thousands, if not millions. Now, remember, you only need one of those to be financially successful.
Before you start running off to the nearest dropshipping supplier’s site, hold on a minute. If it were easy to find a product that fulfilled those three dropshipping product criteria, everyone and their dog would be dropshipping. The fact that there aren’t many dogs doing dropshipping shows that while this exercise seems simple, it is not.
Immerse Yourself in the World of Dropshipping
When you think dropshipping, I am sure your thoughts go to places like Amazon, eBay, and Aliexpress. Now, the first thing you need to do is hang around these places as much as possible. Try to work out what products are trending, what’s popular, and who the popular sellers are.
You also need to learn all about profit margins, seller’s fees, shipping costs and all the other stuff you need to know seriously well if you are not going to make a pig’s ear of everything. You also need to understand all the above if you’re going to find good dropshipping products.
What Criteria You Need to Consider
If you have spent some time of the dropshipping sites above and have some ideas of what to sell, then write them down on a list. Now, let’s look at all the criteria below to see what makes a good dropshipping product and to see if it would work for you.
At the risk of teaching your grandmother to suck eggs, the retail price is the price you sell a product for. You can sell anything for any price; however, there is a price range that works best and that is between $15 and $200. I know that sounds quite a broad range but there are a few reasons why that range works well.
Selling something that people can afford is important. Of course, you could argue that going even lower would then be a better idea, but if you go lower than $15, making a profit becomes much more difficult.
Lower prices mean more sales and more sales means more reviews. Customer feedback and reviews are extremely important for credibility in this day and age. The more credibility you have, the more products you can sell.
If you try to sell products for more than $200, you can do that but you need to be aware of a few things. Anything over $200 is not considered affordable. Under $200 and people may think about buying your product but not that deeply. Over $200 and people tend to think long and hard before buying something. Plus, if you have to give a refund, that can really hurt.
Now, before we continue and while we’re still talking pricing, there are a couple of other things that are important to know.
Minimum Retail Price (MRP)
You probably know what minimum retail price is but just in case, we’ll go over it quickly. MRP is a strict policy that retailers cannot go under. If you are an Apple fan, you will have noticed that there is no point shopping around for cheaper Apple products as you won’t find them. Apple will not let retailers sell for less than a certain amount.
The advantage of MRP is that you know that you are selling the same product at the same price as everyone else. This saves you a lot of time worrying about what price to set because you don’t have a choice. However, attractive as this may sound, selling MRP products is not advisable for beginners.
Minimum Advertised Price (MAP)
The minimum advertised price means that you cannot advertise a product for less than the price stipulated by the manufacturer. What you do when your customer comes shows an interest in the product is up to you.
You can offer a discount or a coupon code, but you cannot advertise the discount or coupon prices anywhere. MAP is not considered a good choice for beginner dropshippers either.
It goes without saying that you want to make as much profit as you can but you need to be reasonable. If you’re buying something $50 and selling it for $500, you can spend your time dreaming about Mai Tais on the beach in Bali, but you’ll never get to the beach, I’m afraid.
The best margins are between 20% and 40%. Even then, don’t automatically go for 40%. You need to do your research and decide the best margin based on other sellers. Mind you, how much you buy the product makes a big difference.
If you’re buying a product $10 cheaper than everyone else, then that $10 becomes extra profit for you. You may be asking how you can find cheaper product prices. Well, you can spend your life searching for them yourself, or you can let SaleHoo do it for you.
Remember that your margin must take into account all the other costs such as shipping and packaging. Forgetting these would make your profit disappear on each sale. In fact, you may end up losing money on each sale, which would be disastrous.
Size and Weight
When you’re just starting out dropshipping, it’s best that you go for products that are small and light in weight. The best place to find products for dropshipping is China which, if you live in America or the UK, is far away. The fewer problems you have with shipping, the better.
In fact, one of the easiest services to use is ePacket, which ships to over 30 countries. They can send your product to wherever it needs to go quickly and economically, but they do have limits. At the time of writing, the maximum weight was 2kg. You’ll need to check sizes on their website as there are minimums and maximums.
Avoid Fragile Products
Shippers around the world are not exactly famous for their delicate handling of the goods under their care. If you decide to sell products that are fragile or have a lot of moving parts, you may find that you will get many, many refund requests, which you will have to honour as you are responsible for the product once it leaves China.
Now, I’m not saying you can’t do fragile products, electronics are a particularly good choice, for example. But go for these sorts of products once you know what you’re doing. When you’re starting out, go for sturdy solid products that won’t break. For a start, you’ll have far fewer refunds to deal with.
Repeat Business Is Constant Business
This is something that many new dropshippers don’t consider enough and they should. A product that requires to be bought often means repeat business and repeat business built up over time can lead to serious earnings. Let me just give you a quick example.
Say you are earning $250 a month and each month, you add another $250 to your business. Here is how your earnings will pan out over a 12 month period:
Jan – $250
Feb – $500
Mar – $750
Apr – $1000
May – $1250
Jun – $1500
Jul – $1750
Aug – $2000
Sep – $2250
Oct – $2500
Nov – $2750
Dec – $3000
Okay, I admit that these figures may be a little optimistic, the basic facts are still true. If you build a business based on repeat business, you will eventually end up with a very nice tidy income.
The other service you can offer is a subscription service. Say you are selling makeup and your customer needs a jar of skin cream a month. Rather than having to return to your website each month, your customer can just order a jar a month every month. Easy for your customer and easy for you. A win-win situation all around.
Having a predictable monthly income also allows you to do other things that you may not be able to do if you don’t know how much you will earn each month. Facebook Ads, Google Ads, and even old-fashioned print media. All these things become more possible with a regular income.
One of the biggest problems with dropshipping is that even after you have found the perfect product, you need to find the perfect product supplier and that is not easy, especially if you dealing with China. Now, take this in the spirit this is meant.
Doing business with Chinese companies is fraught with danger. There are many, many good dropshipping companies in China. Unfortunately, there are many more dropshipping companies in China that are no more than scammers. Sorting out the honest companies from the scammers is one of the major challenges you will have as an online business owner.
If you want to know how you can easily find honest dropshippers in China, you can spend half your life looking for them yourself, or you can let SaleHoo do the work for you. You can read more here.
Congratulations on getting this far, you are one of the few who could succeed in dropshipping because you can concentrate on one thing for more than five minutes. Hahaha. Only joking (sort of).
Finally, you need to find a product that will be around for a while. You’ll have to spend money to become a dropshipper for the product you eventually decide to sell. Photos and sales copy cost money. Even if you can do that stuff you will still need to spend a considerable amount of time on these things.
Choose something that you can build a business on, like makeup or gents shaving products. Selling a dancing plastic cactus might seem like a good idea, especially if it’s Christmas time, but when January comes along and your sales plummet, it won’t seem like such a good idea.
Wrapping It All Up
I was going to continue with mistakes new online business owners make but I really think we have gone on long enough about what makes a good dropshipping product. Please go on to the next piece of training if there is a link here. If not, click this link and you can read a post on mistakes from SaleHoo.
I have written more about dropshipping on this very website. Click here and you can read all the other articles I have written.
If you enjoyed the training, please leave a comment. And if you think I’ve left anything out, feel free to add that below too. Thanks and speak again soon.