Dropshipping, despite the ease it offers in setting up a business, is not always a bed of roses! It all begins with serving a market—a niche.
And like any business ventures, choosing the wrong niche can be the cause of your headaches, miseries, and worse, your failure.
You do not want this to happen, but the realization of failure is always a hindsight—it has often already happened before you find out that you made a wrong decision.
To help you prevent failure, I will show you the top dropshipping niches to avoid, and I will also explain why.
You can thank me later. Or buy me a beer 🙂 I like beer (maybe a bit too much!!).
1. Furniture and Appliances
From television sets to sofa sets, you should never dropship these products. It might be alright to dropship computer tables or a small stools, but never the big items. Personally, I would just steer clear of this sector anyway!!
Here are the potential problems you will face if you sell these items:
- Shipping – these products require a ton of money to ship. There is no way you can offer free shipping. And worse, the items can get damaged during the shipment. And if they get lost or stolen, you are liable for giving your customer’s money back.
- Returns – many products that are advertised online are not what they seem. Some furniture products are actually smaller than what they are purported to be, and television sets and other appliances may not work as advertised. As a dropshipper, you are in no position to test each product that you sell.
- Poor Quality– this is mainly directed at appliances. Maybe the product sent is the wrong power rating for the customer’s country! Maybe it has poor wiring and is a fire hazard. These are things to run a mile from!
If the items shipped to your customer are damaged or if they do not work, what will you do?
Your customer is going to ask for his money back, and you cannot expect this customer to pay for shipping the item back to the supplier.
You will end up paying for it. Most dropshipping suppliers are not willing to take on these returns, this is why their products are often priced so low.
The last thing you want is to be sued or reported to your local government’s consumer protection agency.
One last thing you should consider is the legality of the product. Is your supplier even a legitimate distributor of the product you are selling? If you are going to dropship branded appliances, are you sure that these are original?
If your supplier is manufacturing imitation products, this supplier will be shut down. The worse that can happen is if your store is found out and you get a legal notice from a lawyer to cease and desist your operations.
2. High Technology and expensive gadgets
One of the top 10 profitable niches is gadgets. While there is a huge demand for technology products and the gadgets that support them, this is one of the worse things you can dropship.
Let us take a look at the reasons.
- Competition – you are not the only person selling gadgets like phones and tablets. There are thousands of you. You have nothing unique to offer to your consumers—what is sold on Amazon is the same with what you are selling.
If your competitors have money, they may not even be dropshipping. Instead, they buy in bulk at significantly lower prices—so how will you compete?
- Pacing – technology changes so fast, and there is always a new model for each product every year. Your products in the technology industry are never evergreen. If you dropship technology and gadgets, you will be changing your inventory every now and then.
And with an inventory change comes with a cost, not in the inventory itself but in your marketing strategy and website maintenance.
You need to remove the old products and replace them with new ones. You have to create new ads and launch new marketing campaigns instead of just using the existing ones.
- Insurance – you need to ensure the gadgets that you ship. This should help you prevent losses. You cannot ask your consumer to carry the financial burden of shipping insurance. In your customer’s eyes, you are responsible for paying the insurance cost. This just adds to the cost for you!
Technology is a fast-paced niche. It is best for huge companies that have a team of workers and writers who will update the content of their website. In fact, many companies do not even dropship these products. Instead, they just do affiliate marketing and let the manufacturer or supplier take care of the sales process.
Don’t get me wrong, simple technology products can work great….the automatic cat feeder and such like! Just stay away from high priced cutting edge tech products!
3. Expensive Jewelry and luxury items
Jewelry is great, provided that it is not made of real diamonds or mega expensive stones. There is a market for jewelry, and there is big money to be made.
But is it worth it?
Let us take a look at the cons of selling real jewelry.
- Fake – okay, many suppliers offer real jewelry, but there are also those that sell fake ones. Again, you cannot have all these products pass through your hands just so you can verify if the jewelry is real or not.
The only way you can dropship real jewelry that is 100% legit is if you go straight to the manufacturer like DeBeers—but hey, companies like this do not dropship.
- Buyer fraud – do you know how easy it is to fake jewelry? Really easy. So, if you shipped a real piece of jewelry and you chanced upon a scammer, this scammer is going to replace the stone and tell you that what you sent is fake.
What is your course of action? There is really nothing you can do but give the customer back his money. And then, the fake jewelry will get returned to your supplier. This will end up in a huge legal mess. And no matter how you look at it, you are going to lose.
The best thing you can do is to sell faux jewelry, and make sure you make this clear to your customers—that they are not buying real stones. Fake or fashion jewelry that is inexpensive can be a great option.
With casual jewelry items, it is not likely that your customer is going to ask for a refund—they know what they bought (hopefully!). The only reason a customer is going to ask for a refund is if the item she received is damaged or not as described.
Leave the diamonds and big brand designer labels to the big boys!!
4. Typical clothing and accessories
Whenever a person finds out about dropshipping, the first thing that comes to mind is to sell clothes. To the uninitiated, it is easy to justify that clothing is a basic need, and that there is a market for it.
The logic is true, but it does not work all the time. The only way you can make a clothing store work is if you sell something unique.
Here are the reasons why should avoid the clothing niche:
- Competition – like gadgets, you are not the only person selling clothing. Since this is an industry that even a child understands, any person who has taken a dropshipping course almost always starts with selling clothes.
Literally, there are thousands of clothing stores. And if you add brick-and-mortar businesses, how else will you compete, especially if the clothes you are selling do not bring any new novelty or uniqueness to it?
And because there are so many of you, there is no way you can price your clothing store at a good profit margin. The industry is a cut-throat one, and you better stay away.
- Fads Come and Go – like gadgets, clothing and fashion change quickly. The fashionable dresses today will no longer be in demand next year. As such, you have to choose new products to display on your clothing dropshipping store.
And if you do this, you have to change your marketing banners, your hero banners, your ad copy, and so much more. You also need to buy a new piece of clothing to send to your influencer.
All of these entail cost—a cost that you will have to repeat spending every time a new fashion statement develops.
- Quality – you will never know how the clothing feels until you buy one. Many cheap clothing today is made of polyester—they are cheap, but they do not last.
Worse, they do not feel good on the skin. The last thing you want is to have customers accuse you of fraud—that your ads are misleading. That the clothese you sold them are sub-par!
Another issue with clothing is that there really is no standard size. Sizing is going to be your worst nightmare. If the customer wants to return it, you would have to issue a refund.
Here is the thing: some suppliers do not accept refund because of inappropriate size selected. In this case, you will take the financial hit of the return.
The only way to get around this would be to offer a tightly marketed print on demand product, to a specific interest group. Dog t-shirts to dog lovers, for example. Do not bother with the general clothing market in my opinion!
5. Shoes and private wears
Shoes, underwear, and lingerie fall into this category. Anything that is personal should not be a part of your dropshipping store unless you have strict rules to go by, and your customers understand these rules.
Here are my reasons for not recommending these items for your dropshipping store:
- Size – like clothing, there is no standard size for shoes. There is American size, European size, and Asian sizes. Even if you have standard sizes, the human foot varies to a certain degree that the right size will not even fit.
Some people have flat feet, and some have wide feet. If you sell shoes, you should be prepared to deal with refunds and returns all the time.
- Used before return – can you just imagine a person trying underwear and realizing that it does not fit? What if he or she tells you that they want to exchange it for a different size?
It is gross. That is what it is. If you say that you do not accept returns, then no one is going to buy. As you can see, the customer is always going to assess his or her risks. If you do not allow refund and returns, do not expect customers to even attempt to make a purchase.
They would rather buy their shoes and underwear from a physical store where they can try the shoes, or at least see the underwear and visually judge whether it fits or not.
Socks, on the other hand, are great for dropshipping. No customer returns socks. Besides, socks are clothing that is almost always made of flexible material. There is no way a customer will get the wrong size of socks—they will always fit. Let the novelty sock printing begin……… 🙂
6. Industrial equipment
The best high-ticket items to dropship are also the worst.
With industrial equipment, I do not refer to huge tractors and robots. What I am talking about are electric tools like circular saws or things like John Deere style lawnmowers.
Here are my reasons why I do not recommend these products:
- Shipping – again, these items are heavy, and some are huge. You cannot expect to use e-Packet for this. If you ship internationally, it is likely that the shipping cost is more expensive than the product.
- Defects – sometimes, industrial equipment pass through quality checks even if they are defective. I have bought one online myself, and this can happen to your customers too!
Since you do not get these items to test them, there really is no way of knowing if they work. And what if there are missing parts? An issue like this can cause you a lot of headaches.
- Accidents – this is the worst thing that can happen. If the item you sold caused an accident, you can be held liable. As a seller, it is your obligation to ensure that the products you cause are not hazardous. If the equipment you sold resulted in a horrible accident, you may find yourself explaining why you are not liable in front of a jury.
Leave the large equipment and the dangerous equipment to the original manufacturers and suppliers. If you are really passionate about selling them, dropshipping is not the best way to make money off these products. The best thing you can do is to become an affiliate marketer for them.
7. Large hobby equipment
This one has nothing to do with tools. An example that I can provide is a kayak. While this sounds good because it is niche-based, there are some problems lurking in this niche.
- Speed of sales – a kayak or any large hobby item is expensive. Any person who looks at your item is interested, but this interest does not translate to readiness to buy. A kayak costs at least $300, and it is not easy to part ways with that money.
So, what happens? This customer is going to tippy-tappy around, remaining undecided for months—months where you pay for your online store’s subscription and you make no sale.
Also, the customer is likely going to compare your kayak with another seller’s kayak. And if your competition offers something better, you are dead in the water.
- Defective product – since you do not perform the quality check for these products, you will also not know if they work. Yes, there are high ticket dropshipping suppliers that do not do their jobs well.
If the products have scratches and defects but still usable, your customer is not going to leave positive feedback about it. At most, they will leave you a 3-star rating.
- Shipping cost – large hobby equipment takes a lot of money to ship. The kayak costs more than $400 to ship internationally, and this does not include the cost paid for customs duties.
What if the kayak is broken during shipment? This is going to be a pain—your customer is not going to shoulder $400 to ship it back to your supplier. No, it just is not going to happen.
Stay away from expensive hobbies—they are profitable, but they are also costly. There comes a point where it takes only one defective product or return, and your profit from the other sales you made will go down the drain.
At best, you need to sell hobby equipment that is affordable and easy to ship. Like tents and camping bags. With products like these, you have a target market, and you can appeal to the customer emotions to make an impulsive purchase. Even if they return the item, the cost of the refund is not going to hurt you that much.
Dropshipping Takeaways 🙂
There goes our list of dropshipping niches to avoid.
Just because something has a market does not mean you should get into it. Always remember that you are a dropshipper, which means that you are only functioning as a middle man between a supplier and a customer.
The problem with this model is that you are never in control of the quality of your products and what you ship. And yet, in the eyes of the customer and other people, you are liable for selling your products.
Always stay on the good side of the law—do not be tempted to sell counterfeit goods. The last thing you want is to get sued and have tour assets frozen or taken from you.
Avoid these dropshipping products that I showed you today—they could be the cause of your sorrow. Do not end up being bitter about dropshipping because you made a bad choice.
Instead, exercise caution and wisdom in choosing the market you want to serve and the products you want to sell.
I learned the K.I.S.S terminology in high school! Keep It Simple Stupid! This should be your mantra for picking dropshipping products. If you want to promote expensive or complex products, become an affiliate for Amazon or such like. For your dropshipping store, find trending products that are relatively cheap, light and unlikely to break or be the wrong size 🙂