One of the most challenging parts of starting an online business in Canada is choosing a profitable niche. We have less competition within our borders than we would in large markets like the US. However, we still need to select products that are in demand, while not being in a saturated niche or easily obtained locally. We also have to stay away from items easily obtained from the US (such as those that ship inexpensively in an envelope).
My Secret Weapon – Drop Shipping
Drop shipping is the perfect way to lower the risk of choosing the wrong niche. With no inventory to worry about, we can test run virtually any product through a website, auction or sellers’ market like Amazon. Drop shipping is a business model in itself, so you may decide to continue with it or bring in the best selling products for resale and continue drop shipping other products. The most popular drop shipping suppliers among Canadians are Wholesale2B and World Wide Brands.
RELATED POST: How to Sell Your Product in Canada
Testing the Waters with Affiliate Programs
You can also test product popularity through affiliate programs. Simply find a merchant selling the product (or something similar) and use direct linking options to see how it sells for you. Obviously, you will need to verify that they ship to Canada if they’re located elsewhere. Your margins will be considerably lower than with drop shipping, but it’s a less intimidating option for some. An easy affiliate network to start with is Share-A-Sale.
My Hottest Online Niches in Canada
I’ve worked with a lot of products and merchants at various levels for almost 20 years, which gives me unique insights into the online Canadian market. Following (in no particular order) are the most consistently lucrative product niches for me (and those I work for) so far this year.
- Specialty Fashion: Plus sizes
- Specialty Fashion: Trendy maternity
- Health & Fitness: Natural supplements with a focus on more obscure or trending items.
- Smoothie Supplements: Powders (super-foods, protein and so on)
- Pets: Natural everything, from food to toys.
- Bulk Baking: Unique decorations, cupcake liners, etc.
- Novelty Packaging: Unique cellophane bags, favour boxes, reusable gift bags, etc. and related theme packages. Nothing you can find at your average dollar store or department store.
- Information Products: eBooks, whitepapers, and online courses. This niche does well for us because we can find info products on virtually any topic, allowing us to slip them into any niche.
- Reusable Shopping Bags: It’s a little tougher to find suppliers but the niche does really well if you stick to novelty bags with nice designs.
- Seasonal Decorations: This one can easily get out of hand so try to focus on truly unique items. Don’t be afraid to approach local artisans and crafters with consignment-type deals or the like. This is a great category for after-holiday discount shopping if you have room to store items for the next season.
Bonus: A category to watch is products targeting Canadian senior citizens. The niche has been a risk because although there are a lot of baby boomers in their senior years, they typically aren’t comfortable shopping online. That’s changing, however, as many learn more about computers and as middle age techies enter their golden years. We’re seeing a steady increase but not an overwhelming demand… yet.
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