To succeed as a dropshipper, you must understand which niches to focus on and which to avoid.
You might have heard that dropshipping is a saturated business, but that’s not true. The global market is large enough for anyone to start a dropshipping business.
However, some dropshipping niches have too much supply, thus making them highly saturated and extremely competitive. So, anyone looking to break into dropshipping must avoid oversaturated niches.
Luckily, I’ve compiled a list of 13 of the most saturated dropshipping niches to avoid in 2023. Let’s dive in.
What Does It Mean For A Dropshipping Niche To Be Saturated?
Have you ever gone to the grocery just to get pasta, only to find many different brands selling the same product? This analogy clearly explains what saturation means, and It’s no different in dropshipping.
A saturated dropshipping niche is one with too many dropshippers or stores selling the same product or similar items.
This means there is greater supply than demand, thus making it more challenging to become profitable.
The 13 Most Saturated Dropshipping Niches To Avoid For Success
1. General Apparel
The general apparel niche is affected by two problems.
One, it’s way too saturated. And two, fashion has the highest return rate in e-commerce.
Generally, selling clothing is tricky because details like materials, colors, sizes, and fits can be hard. Put simply, human bodies don’t always conform to sizing standards.
Because of this, you must be extra careful if you want to sell tight-fitting clothing like jeans, leggings, sports bras, pants, etc.
Unbranded Women’s Clothing
Although the entire general clothing niche is saturated, general women’s clothing is another noteworthy sub-niche that’s very saturated.
Unless you drill down and narrow your niche to a sub-niche within women’s clothing, I suggest choosing other options like pet clothes, baby clothes, or men’s clothes.
If you are determined to make it as a women’s clothing retailer, some sub-niches are plus-size women’s clothes, maternity fashion, women’s sportswear, and more.
Also, investing in product branding services – to make your brand pop out is a great tactic that might work for you.
2. Mainstream Products
Avoid dropshipping mainstream products like tissue rolls, stationery, cotton balls, books, and similar items because they are sold everywhere online and offline.
These items are mostly sourced in local stores because they are needed on the go. So, tell me, why would a customer order an item that will take weeks to get from you when they can simply visit the nearest store and get it?
3. General Electronics
Like clothing, the general electronics and gadgets niche for mobile and laptops is highly saturated and has a high return rate.
You especially want to be careful with common electronic gadgets like earphones, headsets, cheap electronics, and other small gadgets.
A piece of advice for dropshippers entering the electronics niche is to ensure your products are top-quality to prevent high refund rates.
Despite the high demand for wristwatches, most online stores have difficulty selling them due to the high supply and intense competition in the market.
At first, it seems smart to bulk-buy those cheap, expensive-looking watches on AliExpress that go for as low as $5 and sell them for an incredible profit. But when thousands of other dropshippers get the same idea, the market quickly gets saturated.
Besides competing against fellow dropshippers selling all kinds of watches (including branded watches and private labels), you’ll still face competition from big brands with strong reputations and large marketing budgets.
So, unless you have something unique to offer, the watch niche is a no-go area, especially for beginner dropshippers.
5. Copyrighted Products
Dropshipping copyrighted products comes with all sorts of problems.
For starters, the company with the copyrighted products can sue you for a huge fine. To worsen things, selling copyrighted or counterfeit products can hurt your brand image.
In addition, you are likely to experience customs clearance issues, suspended ad accounts, and social media advertising regulation issues.
6. Fragile Items
First, fragile items exist in many categories and can’t be classified as a saturated niche.
However, many dropshippers do well to avoid fragile items because they can easily become damaged during transit and result in high return rates. Also, longer transit times can increase the likelihood of fragile items getting damaged.
So, while the market for fragile items isn’t necessarily saturated, you should avoid dropshipping products of this type.
7. Fitness Niche
The fitness niche is among the hardest for dropshippers because of the abundance of well-established suppliers and generic fitness products.
Without a revolutionary product, you have a slim chance of succeeding in the fitness dropshipping niche, especially as a beginner.
Of course, you can still succeed with an innovative approach and good branding. Just avoid selling generic fitness products that can be found anywhere.
8. Bulky and Heavy Items
Furniture and heavy equipment might sound like great high-ticket dropshipping product ideas. But what you may not know is that dropshipping bulky and heavy items is very complicated.
First, storage and shipping fees on products depend almost entirely on their size and weight. When you forget to factor in these increased costs, it will lead to significantly lower profit margins when you sell at a competitive price.
Or, worse, it will be impossible to make sales because your product costs 5-10 times more than the consumer can easily purchase from a reputable furniture or equipment maker nearby.
Shoes are among the most sold products, so it may initially seem like a great dropshipping niche.
However, the supply is equally high as the demand, and shoes have one of the highest return rates, making them unattractive for dropshippers.
In the shoe niche, you’ll go against top shoe brands and well-established dropshippers with huge advertising budgets, so competing will be difficult.
But succeeding here is still possible if you can find a sub-niche and focus on branded shoes, as unbranded ones have a lower demand.
10. Safety Equipment
Selling safety equipment (think helmets, knee protectors, mouth guards must sound like a good idea because there will always be high demand for them.
But they are very unsafe and potentially dangerous for your company.
Ask yourself, “What happens if my supplier’s products are of low quality?” Of course, you’ll be in big legal trouble when a consumer gets hurt using your product.
So unless you’re 110% sure about the quality and safety of your products, safety equipment is one dropshipping niche you should avoid.
11. Lifestyle Niche
The lifestyle niche is oversaturated, and it’s easy to understand why. Most products under the lifestyle niche are easy to source and can be found everywhere.
This translates to a huge supply and a low online demand for lifestyle products.
These lifestyle products include grooming kits, essential oils and fragrances, yoga equipment, and more.
12. Cosmetics And Beauty Products
Like safety equipment, cosmetics and beauty products are a dropshipping niche you must avoid. That is unless you’re confident enough in your supplier to vouch for their products in a courthouse.
For one, selling cosmetics is risky because they’re applied directly to the skin. A bad reaction will damage the reputation of your dropshipping store. And an adverse reaction might end up with you having to cover your customer’s medical bill.
But besides the inherent risk, the cosmetics industry is also highly saturated. It requires substantial capital to create healthy products. And you need to execute a powerful marketing strategy to gain customers. My take: don’t dropship beauty products.
13. Seasonal Products
Now, if seasonal products get the highest demand during the seasons (of course), why are they on the list of saturated niches?
Well, seasonal products are a short-term solution. They don’t result in consistent profit margins and aren’t a viable niche idea. But it’s always a great business strategy to take advantage of the peak shopping seasons of your products.
While you can use products centered around seasons like Halloween, Christmas, Easter, and more as supplementary store offerings, building a profitable company around them won’t work because those holidays and seasons don’t occur year-round.
How To Pick the Right Niche for Your Dropshipping Store?
Choosing the right niche for your dropshipping store is crucial to your success. Think of it this way: you need to find a product or a category of products people want to buy but can’t find everywhere.
Here’s how you can do it effectively:
Focus on Your Interests
Begin with what you know and enjoy. If you’re passionate about a product, you’ll be more invested in selling it. Plus, your enthusiasm will come through to your customers.
Research and Understand Your Customers
You need to get into their shoes to really grasp what your customers are looking for. Use social media, forums, and online communities to listen to their conversations. What problems are they trying to solve? What products are they excited about?
Conduct surveys or ask direct questions to gather insights. It’s not just about demographics; it’s about understanding their behavior, preferences, and pain points.
Once you know this, you can tailor your store to meet those specific needs.
Analyze Market Demand
Use tools like Google Trends to understand what products are trending upwards in interest. Look for products with steady demand or those on the rise but not yet oversupplied.
Check Out the Competition
Do a competitive analysis. How many stores are selling the product you’re interested in? What are their prices like? If there are too many, it may be tough to break in.
Find Products with High-Profit Potential
Look for inexpensive products that you can source but sell at a competitive price. Your profit margins are important. Try your best to find the best-selling dropshipping products In 2023.
Consider the Logistics
Think about shipping. Is the product small and easy to ship, or will it present challenges? You don’t want logistics to eat into your profits or create customer service headaches.
If it’s something you don’t want to handle, consider getting a fulfillment agent like Globallyfulfill to manage your inventory.
With all this said, feel free to use my advice on choosing the right dropshipping niche to your advantage.
You’ve now learned about 13 dropshipping niches that might have seemed profitable but, in reality, are not worthy of your investment. So avoid them and put your time and capital into any of these profitable dropshipping niches and products.
As we part ways, remember, if you’re truly serious about making money from your dropshipping business, you must ensure the customers you gain don’t abandon your store because of a horrible experience or impression.
Now, while that might seem like a whole lot, a reliable fulfillment agent will process and ship customers’ orders on time; some even throw in branding, packaging, and start-up-friendly principles like a no MOQ policy and a generous 90-day free warehousing option.
However, you want to look out for the ones with access to an intelligent ERP management system that empowers you to streamline your operations effectively.
Can I Still Make Money In A Saturated Dropshipping Niche?
Yes, you can still make money in a saturated dropshipping niche, although it will be highly competitive.
But if you still plan on dropshipping in a saturated niche, consider finding a less-saturated sub-niche. Another strategy is to find a way to stand out by focusing on branded products or making your products seem unique to customers.
Learn more about the responsibilities, challenges, and strategies of being a dropshipper in this complete guide to dropshipping.
How Do I Know If A Drop Shipping Niche Is Saturated?
Increased Competition: Many competitors selling the same product clearly indicate that the market is becoming saturated.
You can use tools like Google Trends and Google Shopping to see the number of ads and sellers for a particular product.
Margins: If the profit margins are constantly decreasing for the product, it might be a sign of too much competition and insufficient demand.
Price Wars: If you notice that competitors are constantly and aggressively lowering the prices for a product, it’s usually a sign that they are trying to gain market share and that the market is becoming more competitive.
Is Dropshipping Saturated In 2024?
The answer is No. We can say a dropshipping niche or product is saturated, but we can’t say the same for dropshipping as a business model.
With dropshipping, you can sell almost any product worldwide. And with over 4.5 billion internet users today, you have a large audience to market your products to. So, no matter how many dropshippers are on the market, the dropshipping business isn’t going anywhere.
But succeeding in dropshipping is easier said than done, especially for beginners. So, it’s recommended that you partner with a trusted mentor or seek expert advice.