{"id":3297,"date":"2021-12-28T02:28:00","date_gmt":"2021-12-28T02:28:00","guid":{"rendered":"https:\/\/mdlst2020prod.wpengine.com\/blog\/?p=3297"},"modified":"2022-08-25T18:41:41","modified_gmt":"2022-08-25T18:41:41","slug":"dropshipping-product-mix-important","status":"publish","type":"post","link":"https:\/\/www.modalyst.co\/blog\/dropshipping-product-mix-important\/","title":{"rendered":"Why Your Product Mix Matters for Dropshippers"},"content":{"rendered":"

When you start a dropshipping business<\/a>, finding products from sites such as AliExpress may seem like the fastest way to launch your online store.<\/p>\n

While your speed to market may be only a few hours, you should remember that millions of other online stores have taken the same path.<\/p>\n

To win as a dropshipper, your product mix needs to be differentiated. <\/strong><\/h2>\n

Differentiation is arguably the most important part of developing a strong, sustainable retail brand.<\/p>\n

Although it may seem logical to offer as many products as possible, from sources such as AliExpress, to appeal to as many customers as possible, this is seldom the case.<\/p>\n

On the flip side, having too small of a curated selection can narrow your customer funnel, causing you to fall short of meeting your customers\u2019 needs, which can ultimately limit your profit potential with a dropship model.<\/p>\n

The most successful dropshipping businesses devote research, testing, and analysis, after scouring sites such as AliExpress, Wish, and Shein to find reliable dropshippers and niche dropshipping items to sell.<\/p>\n

The lesson here is that your product mix needs to be differentiated to hit the sweet spot with your customers.<\/p>\n

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The perfect product mix will carefully balance your resources and profitability while still catering to the specific needs of your market.<\/p>\n

Once you\u2019re confident in your strategy, it\u2019s important to monitor and test it to make sure it stays relevant as the dropshipping<\/a> landscape and your customers\u2019 needs continue to evolve.<\/p>\n

Let\u2019s discuss some key reasons that your product mix is so important, along with some tips to develop and optimize yours.<\/p>\n

Differentiating Your Brand as a Dropshipping Business<\/strong><\/h3>\n

In addition to factors like customer service and experience, your dropshipping product mix<\/a> is essentially your brand identity. It is, after all, why customers shop with you. In classic marketing theory that stems back to the 1940s, key business success is having a unique selling point or proposition (USP).<\/p>\n

What\u2019s different about your brand that customers can\u2019t find elsewhere \u2013 a product or experience that makes them choose your store over your competitors and keeps them coming back for more?<\/p>\n

For you particularly, this may manifest as a combination of products and their price points, as well as any special services or offerings.<\/p>\n

One product-specific strategy is to offer niche products from independent dropshipping suppliers. Depending on your offerings and audience, you can benefit greatly from featuring products that aren\u2019t widely distributed across millions of retailers on the web.<\/p>\n

Take for example Syght Glasses<\/a>, a company that made nearly $2,500 in 5 weeks by importing specialty gaming glasses from China. Or Hello Matcha<\/a>, a dropshipping business that capitalized on the niche trend of matcha powder to make more than $900 in just 3 days!<\/p>\n

\"\"<\/a>Image credit: Shopify<\/a><\/p>\n

Segmenting and Satisfying Your Customers as a Dropshipper<\/strong><\/h3>\n

Ideally, you\u2019ve already created buyer personas for your ideal customers<\/a>.<\/p>\n

Once you know who your customers are, think of a strategic product mix as a secret weapon for engaging them and keeping them happy. When your products are consistently fine-tuned to cater to a specific audience, you\u2019re carving your space as a leader. Customer segmentation is a key for an effective business.<\/p>\n

Knowing who you\u2019re selling to and what makes them tick can create a powerful, streamlined business model.<\/p>\n

Every decision you make \u2013 from dropshipper partnerships to dollars spent on advertising \u2013 are more likely to hit home and generate your desired sales and brand awareness goals.<\/p>\n

This creates a positive feedback loop. Your ability to speak to your customers\u2019 needs makes them happy.<\/p>\n

Making them happy develops brand loyalty and secures them as long-term customers. Research shows over and over that retaining existing customers is much more profitable than constantly finding new ones. Harvard Business Review reports that acquiring a new customer can be as high as 25 times more expensive<\/a> than keeping one, and a customer retention rate of just 5% can increase profits by an incredible 25% to 95%.<\/p>\n

Maximizing Your Profits with Dropshipping Products<\/strong><\/h3>\n

Enticing dropshipping products + a positive shopping experience = higher profits. A pretty straightforward formula, don\u2019t you think?<\/p>\n

Once you\u2019ve made your initial decisions, it\u2019s important to keep tracking and refining. This is what sets the best brands apart: they have their ears to the ground, always listening to their customers, examining their behaviors, and looking for ways to keep them engaged and excited.<\/p>\n

One strategy for keeping your audience captivated is creating buzz around expanding your existing product line or offering a new product, which translates to residual revenue. Think of the frenzy over every new iPhone model that\u2019s ever been released. To get some inspiration, drill down into your current performance metrics to see what your customers like the most, and experiment with adding new products that are likely to pique their interest.<\/p>\n

Keep reading for some actionable tips on how to do this.<\/p>\n

Apply the \u201cData Triangulation\u201d Concept<\/strong><\/h3>\n

You may be familiar with the Pareto principle<\/a>, or the 80\/20 rule, which says that 80% of your business will come from 20% of your customers. This also extends to products: 80% of your dropshipping sales will be for 20% of your product mix. When you crunch the numbers, this means 64% of your revenue will be your top customers buying your top dropship products.<\/p>\n

Data triangulation is examining these factors to find the sweet spot. Who are your top customers, and which top products are they buying? How can you build off of this momentum \u2013 expanding your product line to capture more interest, offering added incentives like free shipping<\/a>, promoting on different platforms or channels, or otherwise?<\/p>\n

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Image credit: Econsultancy<\/a><\/p>\n

Of course, these exact numbers aren\u2019t always the case, but it\u2019s a time-tested and valuable guideline for understanding supply and demand.<\/p>\n

Tips to Develop and Optimize Your Product Mix<\/strong><\/h3>\n

Use Google Trends<\/strong><\/h4>\n

Google Trends is an awesome free tool to see how often users search for a particular phrase on Google. This can help to test your predictions about how a new product might perform in your store (because let\u2019s face it, intuition alone doesn\u2019t always mean the highest success).<\/p>\n

For example, take a look at the Google Trends results over the past 5 years for a \u201csubscription box.\u201d<\/p>\n

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While this trend experienced its highest growth during the 2014-2015 year, it\u2019s still continuing to climb. If you look closer, you\u2019ll see that subscription boxes spike from late November to mid-December every year, meaning they\u2019re a popular holiday gift. This means that as a general rule, you might have more success breaking into this market during the holidays, provided you have a strong offering and competitive strategy to keep up with more established brands.<\/p>\n

Within the main search of \u201csubscription box\u201d (or whatever else you choose), you can also drill-down based on:<\/p>\n