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How To Find A Niche Market For Your Store In 4 Steps

By Olga Lavrinovich

Find a Niche_Market

When you start a business, it’s not always easy to make up your mind on your future niche. How to find a niche? What to focus on? What if the chosen field won’t turn out to be as profitable and popular as planned?…

If you want to create a profitable dropshipping store, it’s a good idea to carry out a niche research first. Today, we will talk about the best way to do it – and share the algorithm we use ourselves. So, let’s take a look at some measurable niche criteria!

What is a niche market?

To begin with, let’s discuss a highly important question: what a niche means, exactly?

A niche is a narrow market segment with some specific products that are interesting and desirable to a certain category of potential buyers.

For example, let’s take a broad market: clothes. Within this huge market, there are lots of smaller product categories: outerwear, underwear, homewear, sportswear, and many more. And each of these categories, in turn, can be divided into numerous, even smaller niche segments, for example:

  • Classy jackets and coats for young men
  • Comfortable workout clothes for women
  • Affordable home clothes for toddlers

Now, you see it: there can be countless variations! Defining a niche, you:

  • Take a broad market as your starting point (for example, clothes)
  • Pick a more narrow category within it (for example, office wear)
  • Make it even more narrow to understand who you will be targeting (for example, smart suits and accessories for middle-aged men)

When your niche is defined in such a specific way, it lets you run and grow your business much more efficiently as you understand:

  • Who exactly is your average target audience representative
  • Which product features and online shopping aspects are most appealing and desirable to this audience
  • What should your advertising messages be and where you should place them to reach your potential customers effortlessly

And now, when you see how important it is for your store to be built around a certain narrow niche, let’s discuss how to find a niche that gives you the best business opportunities!

1. How to find a niche market using AliExpress?

First of all, we visit the website of the dropshipping supplier we’ve previously chosen. Most typically, that would be a seller’s store on AliExpress. Here we can check the relevant statistics that helps us understand if this niche and these specific products are popular with potential customers.

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While choosing a promising niche on AliExpress, we use a five-stars scale to estimate:

  • AliExpress products quantity

We look at the number of items that can be found on this platform upon the use of a particular keyword (we include only the items that have the free shipping option and the 4*+ rating).

How to find a niche market: see how many suitable items there are on AliExpress

Depending on the number of products available, we assign the following ratings to the analyzed niche:

  • 5* if there are more than 2,000 items
  • 4.5* for 500 – 1,999 items
  • 4* for 100 – 499 items
  • 3* for 1 – 99 items
  • The niche popularity on AliExpress

We set the same parameters and sort the items by the number of orders. Then we take the first 10 items and calculate the arithmetic mean of the number of orders.

How to find a niche: see how many orders these AliExpress items have

We use the arithmetic mean to assign a specific rating to the analyzed niche:

  • 5* for an arithmetic mean that’s more than 2,000 orders
  • 4.5* for 500 – 1,999 orders
  • 4* for 100 – 499 orders
  • 3* for 1 – 99 orders
  • Trusted supplier

We set the same parameters, take the first 10 stores, and evaluate them by the same parameters as AliExpress itself does:

  • How long the store has been in operation
  • What’s its feedback score
  • What is the percentage of its positive feedback
  • How much the items match the description
  • What buyers say about the quality of seller communication
  • How satisfactory is the shipping speed

We take all these parameters into careful consideration, but, in our opinion, the most crucial of them is the percentage of positive feedback. Therefore, for these first 10 stores we calculate the arithmetic mean of the feedback score:

  • 5* for an arithmetic mean that’s more than 96%
  • 4.5* for 95% – 95,9%
  • 4* for 94% – 94,9%
  • 3* for 93 – 93,9%
  • Price setting aspects

To estimate the margin potential, we take the price of the most popular item in the niche and look this item up in 10 other online stores. We calculate the arithmetic mean of these 10 different prices (i.e. the average market price) – and compare it to the price set by AliExpress seller. Then, we calculate the pricing difference and assign our rating:

  • 5* for the difference that’s more than 250%
  • 4.5* for 100% – 249%
  • 4* for 50% – 99%
  • 3* for 1% – 49%
  • Seasonal fluctuations of demand

There are types of goods (for example, Halloween decorations, Christmas gifts, etc.) that are in demand only within a limited period of time. There’s nothing wrong about having these products in your store if they are combined with some other kinds of offers (birthday cards, wedding decorations, etc.) that are not season-dependent, but it’s not recommended to rely on them solely.

If you are not sure whether the niche you’ve chosen is seasonal, check it with the help of ‘Google Trends’ tool. That’s what we do, too – and here’s the algorithm.

In order not to miss the hottest trending topics, we monitor general public interest towards various areas of life. Google Trends shows us the graph illustrating how public interest towards some particular topic is changing. We track this trend in the target region within the period of the last 5 years and assign our rating:

  • 5* for an ascending trend
  • 4* for a flat trend
  • 3* for a flat trend

We do our best to make sure that we can promote our offers on various social networks. It is also a nice strategy to choose a niche that can easily be promoted through paid advertising and SEO tools. Therefore, we also check if:

  • Some valuable content can be generated for this niche
  • We can optimize images and videos
  • There are enough relevant and competitive keywords that we can select in relation to this category

SEO potential of a niche should be evaluated carefully in advance, this is why it is necessary to rely on some quantitative indicators. This article describes this process in detail – since it’s quite a complicated issue, we decided to devote a separate post to it.

Google Trends is a wonderful instrument that gives you the necessary insight into general public interest towards this or that product. This service is designed to analyze search trends, so it can be perfect for your business because it shows:

  • How does the search volume change over time
  • What are the most popular search terms
  • Where do the people searching for this term live
  • Whether the interest towards this search query is seasonal and changes through the year

What you need to do to use it?

  1. Pick a product category. The easiest way to do this is to rely on AliExpress in order to gather all the possible categories (e.g. electronics, home and décor, jewellery, etc.).
  2. Go to Google Trends and type in this category in the ‘Explore Topics’ field. Let’s take ‘knitting’, for example.
  3. Look at the result and try to analyze it with the use of additional settings.

For example, this graph shows how the search volume changes over time, and, as you can see, it decreases gradually. To learn more about this dynamics, you can change some settings:

  • Your region of interest
  • Time frame
  • Categories
  • Type of content

finding a niche market: see the demand trend on Google Trends

What’s quite curious, this example shows the seasonal interest towards this search query. Like we previously mentioned – if you mouse over this particular graph, you will see that peak seasons for this search query are winter months.

Surely, you will also find it essential to learn more about the regions where this search query is the most popular.

finding a niche market with Google Trends: discover the regions showing the strongest interest

Additionally, you will get the chance to take a look at the most popular related search terms and estimate the speed of their popularity growth. This will be a very important piece of knowledge at the moment of planning your marketing and SEO strategies necessary to promote your dropshipping store.

How to find a niche for your store with Google Trends: check the related topics

3. Finding a niche market using Instagram

Let’s estimate whether we can use Instagram for this or that particular category. All you need to do is type the chosen category in the ‘Search’ field.

Finding a niche market using Instagram
As you can see, there are numerous results in the dropdown menu.  The names of these accounts contain your focus keyword, which is why they are shown to you. Your task here is to open every one of these accounts and see how many subscribers it has.

To evaluate how promising is this dropshipping niche, we use the following criteria:

  • 5* if there are more than 10 accounts with 30,000+ followers
  • 4.5* for 5-9 accounts
  • 4* for 1-4 accounts
  • 3* for 0 accounts

We usually try to collaborate with the accounts that have at least 50,000 followers as this provides us with quite a significant audience. The most common way of such collaboration is promotion via shoutouts – we ask the account owner to publish our advertisement posts from time to time on a paid basis.

4. How to find a niche market with the help of Facebook

To check whether the niche you’ve chosen has the necessary potential, type its name in the Search’ field on Facebook and choose the ‘Groups’ section. You will see a list of the existing groups that have this keyword in their name, and the number of their members.

We usually consider a niche to be promising and prospective if it has more than 15 groups with more than 30,000 members per each.

Additionally, it can be useful to also check out the ‘Pages’ section – it gives you even more insight into this niche popularity and its opportunities for your business.

finding a niche market with the help of Facebook: see how many related Facebook groups there are

So, the evaluation criteria here are the following:

  • 5* if there are more than 10 groups with 30,000+ members
  • 4.5* for 5-9 groups
  • 4* for 1-4 groups
  • 3* for 0 groups

To learn more about our strategies that are most typically used to promote an online store on Facebook, visit our blog – this case study shows a detailed example of a successful promotion.

Do we avoid any niches?

Yes, we do.

There are some specific niches that should be approached with great caution. We recommend you to think really carefully if you want to include them in your online store.

  • Items that are usually carefully checked before purchase
  • Large and heavy items
  • Items that can get damaged during transportation
  • Items that can possibly experience some legal issues while being taken by a postal service and transferred through customs

Now, you have a much clearer idea of how to find a niche for your dropshipping store! You can check out our list of the most promising dropshipping niche ideas – we made it in full compliance with all the aspects described above. If you want to easily calculate the potential of dropshipping niches you’re considering for your store, use our free research tool.

By Olga Lavrinovich
Olga is a Copywriting Director at AliDropship. Having graduated from the Faculty of International Business’ as an Advertising specialist, she puts years of her copywriting experience into making clear and informative guides, tutorials, and other educational materials for dropshipping newcomers worldwide.
nathan September 30, 2016 8:45:37

Best guide for dorpshipping thanks for your effort

yaros October 12, 2016 10:13:00

Thank you for your feedback!

Nirikshan October 19, 2016 5:45:26

I think this is the best case study, Thank You

yaros October 20, 2016 9:27:41

Thank you!

Neil October 25, 2016 6:44:19

It’s very obvious you put a lot of effort into the service you provide for your clients , thank you for this well written and informative article.

yaros October 25, 2016 8:18:59

Thank you! We are glad you found it useful.

di October 30, 2016 20:31:41

Im not understand – must pay 900 dolars for what? there is way to use dropshipping platform without pay?

yaros October 31, 2016 5:01:31

Hello, you don’t need to pay $900. The plugin with all its features is available here for $89

Arun November 30, 2016 13:29:46

Thank you very much Yaros, I’m following you WF post and the ones here, extremely useful! Soon, I’m going to be one of your client… Do you accept my own niche suggestions too when I order for a custom web site?


yaros December 1, 2016 5:11:53

Hi, Arun! Yes of course, we will be glad to consider your niche!

kanwal January 17, 2017 11:28:06

Thank you so much for this amazing and informative post.

Paul Ascalon February 2, 2017 12:08:01

Hi, just wanna know what happens next after taking all the scores? How do we apply it to select the right items? Shall we choose only the ones with a perfect score? Is there a passing mark?

yaros February 3, 2017 5:23:51

Here we usually recommend focusing on two main parameters – feedback score and the purchase volume.

James Barron February 24, 2017 23:41:39

HI Yaros,
Really appreciate the in depth review in choosing the right niches , I have personally been
wrestling with trying to choose the right one for a month. With this guideline I believe
I can eliminate a great deal of guesswork in settling on the right niche.

Michael Njo February 25, 2017 17:29:43

A very thorough report. The most extreme niche report if you ask me. My problem however is the keyword analysis, competition review, and keyword competition. There is no information whatsoever on these key terms and they are the most integral elements in identifying a niche. If you could please elaborate on the difference of these terms and their scale definition, I will be very grateful.

Mufaddal March 7, 2017 6:27:03

This page info is really worth reading and understanding especially for people like me , who are new to this e-commerce business world. Thanks for the info. Really appreciate.

Mike April 26, 2020 9:47:00

Just need to know where will my site be post and what is the starting cost is like to get it up and selling.

Olga L. April 27, 2020 6:11:29

Hi, thank you for your interest!
Please, check out this page to see the starting cost of different business options:

Tiffany Milan March 19, 2017 16:21:33

Thank you so much for this. You have cleared up a lot of confusion for me. Now, I can gauge the market a lot better and actually have a place to start.. Lifesaver!


Yz March 23, 2017 17:11:51

I will be very honest. I’ve been reading a lot of this stuff for the past two months or so but definitely the two kings of super value are two people: Yaros then after comes kingpinning travis.

Will May 15, 2017 21:09:08

Where are your explanations for keyword analysis, competition overview, and keyword competition?

These are crucial components that determine whether your list of niches work.

yaros May 16, 2017 4:18:11
Muhammad Ibrahim May 29, 2017 4:08:31

After Reading all the comments from the above , i feel buying the Plug in for a Customized Website immediately. But the only suspense is that i hope that there is No Hidden Costs which may disappoint me to use it immediately. I understand that i will have to pay an additional cost if i will use the Social Rabbit Tool and Hope for the others everything is included in the fees of US$299.00 + US$48.00 Yearly Hosting Fee. Thank you for any points not cleared…

yaros May 29, 2017 4:34:53

I can confirm that there are no any other additional fees. For this price you get a complete webstore ready for getting your first orders.

wayne September 4, 2017 15:08:33

Yaros is your theme for sale? will it work on shopify?

yaros September 5, 2017 4:11:10

Themes come free with the plugin. They work with WordPress only.

Mike September 19, 2017 8:43:44

Ahh.. I already choose my niche, bought AliDropship Plugin and paid my Domain before reading this article. You are not recommending Apparel but my niche fall under that category. What will happen to me? Should I buy another Domain and move my AliDropship Plugin into that new hosting and domain?

yaros September 19, 2017 10:30:31

Don’t worry, apparel niche can work great, but I recommend that you avoid shoes.

Amaury Guerra December 6, 2017 17:07:31

Thank you,Olga !
Very good tips.
Why do you include only the items that have the free shipping option ?

Don’t a paid shipping is usually faster than the free ones?

Olga L. December 7, 2017 5:20:24

Thank you for the feedback!

Free shipping option means that neither you nor your buyer will have to pay extra for delivery – in other words, your expenses are lower, you get the opportunity to increase the price to a reasonable level, and your client gets more likely to buy the item.

If you feel that for your target audience the speed of delivery is a more important factor than price, feel free to choose paid shipping option as well. In this case, we recommend to choose the items with ePacket delivery option as it’s more quick and convenient.

Nikolas Barrera December 7, 2017 22:41:23

Great article, tks

Andreas January 12, 2018 21:35:46

We are talking about pure gold info on this . Great work #Yaros and #olga

Richard January 16, 2018 1:26:31

Are you going to update the list for 2018?

Shehan Perera January 19, 2018 2:48:20

Thank you for your insight. I’m just learning about dropshopping and have purchased the Aliplugin app. Your article is really helpful to me to refine ideas.

Natalie May 5, 2018 19:45:13

hello! could you please tell me how you rate a Trusted supplier? is it special tools?

Belly Biya February 7, 2019 17:37:40

Thanks for this guide

Xzendor7 February 17, 2019 0:13:06

This is a great guide; one of the best I’ve read for researching s targeted niche store. I t really takes a lot of the guess work out of determining which niche can be profitable.

Thanks for the info Olga.

ologunde Adekunle August 7, 2019 14:11:34

Great article well explanatory more inspiring write up from you.Great job weldone

ehab August 12, 2019 22:32:52

thanks for the article ,it is very useful.
one question the link to websta is not working ,any reason ?
Thanks again

ymk August 29, 2019 21:38:12

Stuck with the same place. Seems websta is no longer active? Any alternative or being able to skip this question?

Olga L. September 2, 2019 9:04:58

Hi, thank you for pointing this out!

We’ll try to find the alternative and edit these instructions. In the meantime, you can just look for the necessary accounts manually, by typing the target keyword in Instagram search field.

Ana September 25, 2019 3:30:45

Thanks for the very helpful and still relevant article And thanks as well for the follow-up info on Websta. While you’re looking for an alternative, may I suggest editing the article with the info in your reply? At least this will ensure that readers don’t waste their time trying to use Websta or find an alternative themselves.

Olga L. September 26, 2019 7:19:45

Hi, thank you for your feedback!
Yes, we’ve edited this part already.

Tony Cook September 29, 2019 4:30:17

Really great article… incredibly helpful. Thanks Olga.

malika October 20, 2019 7:43:47

Great info ,good thanks .

Jess December 26, 2019 5:17:38

i tried the “Find Your Niche With The Highest Potential” thus the result of the search/trend/fb groups most likely affected on where i am geologically located.

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