A few years ago I was in the same boat struggling to find the answer to this question..
I went from the general women's jewelry niche, to niche bracelets, to a general store, to a halloween store, to a valentine's store, and so on.
It was a constant battle mentally wondering why couldn't I get anything to work after losing hundreds of dollars and on top, getting no where in months while seeing others win.
The truth is, in hindsight, any one of those niches could've worked but I quit too early on them, did not commit to the niche, and left before any results were made apparent. In fact, one of my bracelets in my early bracelet shop made a sale but I did not continue selling it since I had no idea what I was doing.
I just hopped around.
But as I just said, any niche can work. You just have to find one that you can settle on. You don't even need to be passionate about it, you just need something to sell. Really, as a dropshipper, you're just an expert marketer. Give us something to sell, program us follow a methodology, and you can make some big bucks in any niche.
My biggest breakthrough came from just settling with women's clothes. I certainly was not passionate about it, I'm also a dude, and on top, I didn't know much but I decided to commit since it was a large market, summer was around the corner, and I knew something around women's summer clothing would pop. SO I gave it my best.
I went down to my last few $100 to my name and miraculously, I had something that turned from $100 left to $100k in revenue before the end of Q2 a few years back.
Mind blowing.
My main point here is to understand that ANY niche can work. It doesn't matter. What matters is what the market wants. Period.
Mr. Market will tell you exactly what it wants. And by this, I mean the customer you're selling to. You cannot force people to like and buy what you have. You can only channel their desires and needs at any given point towards a product or service which fulfills their needs.
That's why we test dozens and dozens of products to find one that sticks and speaks to their desires.
Once you discover that, whether its totally undiscovered or already selling (the product), you can make some big bucks.
Find a niche, and commit to it.
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I have a low budget of about $700 and want to get things right this time. What products would be good to test and which products tend to do the best? I don't wanna be wasting money on products that won't convert or won't give a positive ad return since I don't have a lot.