Choosing the Right Niche: B2B vs. B2C for Beginners

What's up, guys? Welcome to the eCommerce Paradise podcast. This is your host, Trevor Fenner.

Today, I'm going to discuss for beginners what kind of niche is better to get into, B2B or B2C. So if it's your first time listening to the podcast and you haven't got my niches list yet, go to eCommerceParadise.com slash niches. It comes with a free mini course as well as a free Shopify store trial. So go check it out, eCommerceParadise.com slash niches. Make sure you subscribe to the channel as well.

All right, so when it comes to getting started with high-ticket dropshipping, you really want to not buy it off more than you can chew. In the beginning, it's really tough to get a store profitable when you have a huge product catalog and you have customers that are hard to reach. So the best thing that I recommend doing in the very beginning is actually to avoid a B2B niche unless you already have experience in sales in a B2B niche.

For an example, I used to work for a lock and security hardware company in Los Angeles back around 2010-ish. I worked there for about five years, right? And it's a very B2B niche. You're selling locks and security hardware to locksmiths and security companies. In fact, they only sold to those companies. So it's a distributor company. It's like a wholesale company. Now, if I wanted to break off and do a similar thing, I could definitely do that.

I could have taken a list of the clients that I worked with and gotten some sort of a account with a different distributor and maybe somehow figured out how to sell to them. Definitely could have done that because I already had sales experience in that niche. Another idea is I could also set up a store selling high-ticket products within that niche, like specific products, like let's say safes. Safes are products that can go anywhere between $500 to $5,000 or more, and you can sell them online.

And I've done that before. I've had stores selling safes and I've sold them. The problem with safes that I don't like is that they're huge, bulky items that can cost a ton of money to ship. And so because of that, you lose a lot of margin and there's a lot of trial and error when it comes to figuring out how to set pricing right. And since I had already worked in that niche, I didn't really have the passion that I wanted to have with the store that I work with.

And what makes me really passionate with high-ticket stores is getting really good margins. So if I see that a store isn't getting very good margins, I start to lose my passion in that niche pretty fast, even if it's something I have experience in. So the main thing really is with high-ticket dropshipping is high margins. You've really got to focus on high profit margins. That's the only thing that's

going to make your business work. If you're going to try to sell products that have 10, 15, 20% margins, it's going to be difficult to make a net profit at the end of the month after all your expenses. It's also going to be difficult to scale because you're not going to have so much money to spend on scaling. But if you have 20, 30, 40% margins after shipping costs and all that, then it's definitely going to help and you're going to be able to scale a lot faster. So keep that in mind.

But when you're first getting started, it's definitely better to... Choose a niche that is a consumer-oriented niche, it's a lot easier to find these customers on the internet through Google Shopping and through shopping portals than it is to find business customers. Business customers will search the internet, but oftentimes they'll actually go with companies that they've been referred from other businesses and stuff like that.

So although it does take longer to start, a B2B business can be very profitable in the long run. It just usually takes a bit longer to start. So what I usually tell people that are just getting started is choose something like a consumer niche that has a bit more competition. You know, people sometimes complain, oh, it's too many competitors. But really, that's not actually a bad thing.

When you're looking at a niche and there's not that many competitors, you have to wonder yourself, why are there not that many competitors in this niche? Maybe there's something wrong with it and that just doesn't work for this business model very well. And it's probably the case. A lot of times, and I'll give you an example of a niche that's very difficult to make work, is a commercial kitchen equipment niche because commercial kitchen equipment is very complex and very big.

And the suppliers like to work with brick and mortar stores and stores that can provide service and in-person support. So it's going to be very difficult to find a lot of suppliers, especially the suppliers that the big competitors have. Now, so it's quite difficult to get one of these businesses started as well because they have huge product catalogs, a ton of products, just like ridiculous amount of products, into the thousands or tens of thousands of products in their catalog.

And so because of that, it's very difficult to onboard all those products from the suppliers. So when you're looking at consumer niches, on the other hand, usually you're going to deal with a smaller product catalog in general. So the smaller product catalogs are a lot easier to deal with as a beginner because in the beginning you don't have all the resources, technology, software, and teams to be able to onboard big supplier catalogs.

You're going to be able to only work with suppliers that have maybe 10 products, 20 products, 30 products, that kind of thing. So under 100 products per catalog. So manually onboarding supplier products can take a lot of time. And when you're doing it by yourself, especially in the beginning, it can take like a half an hour just to get one product done. But you can streamline your processes, maybe start getting a system down.

And once you get that figured out, maybe it'll take you a few minutes for each product, that kind of thing. But then some products, some categories have a ton of variants and different types of versions of that product people can buy. I've seen, for instance, in fireplaces, electric fireplaces, there can be up to 50 variants in each particular product with different sizes and colors and types of stones and whatnot.

So you really have to do a lot of research and look very specifically at different types of niches to be able to choose one that you think that you're capable, of handling in the very beginning.

So as a beginner, again, easier to choose a consumer niche, one with tons of competition, so that you know that you're going to have plenty of search volume, so you know people are selling it, it's working well for them. Choose something without a huge product catalog where the catalog doesn't have a ton of variants. They're simple products. Try to choose something that is not so big and bulky. So you're not going to end up with big shipping costs. They're going to eat away all your profit.

So something a little bit smaller is better. A few good examples of niches are like telescopes or scopes in general. That's a good one. Solar kits, solar power generation kits. That's another decent one. Niches that I also tell people not to go after are niches where the products are quite delicate or there's a lot of complications with them.

That, you know, one of the niches, the top niches that I've sold in the past that I don't really sell anymore is electric bicycles because those have tons of problems. And so what you encounter is, yes, you might make some sales and they might be decently profitable, but at the end of the day, the customer is getting a damaged product or they're getting a product that has problems and won't start or won't work.

And so then they're filing chargebacks and you're dealing with returns and you're just losing money. So I definitely don't recommend that niche anymore for beginners or anybody really, even though there's a ton of people selling them, it's a pain in the ass to sell. And at the end of the day, you're actually going to end up getting a lot of your profits eaten away by that stuff. But there's tons of awesome niches available. I include them all in my niches list.

And there's more than that too. And I'm working on building that more as well.

So lots more to come there. So just a few tips there for beginners to get started. I hope that helps. Definitely check out my offers at ecommerceparadise.com. Currently, I have a High Ticket Dropshipping Masterclass, which is a full 30 plus module course, how to get started, launch and scale a High Ticket Dropshipping store. I also have a turnkey service, a done for you service, where we will build you out an entire store for you.

So some links for those, ecommerceparadise.com slash masterclass and slash turnkey. I have more services as well, so go check those out.

And the last thing is I also offer private coaching. You can get some private coaching, 100 bucks an hour, ecommerceparadise.com slash coaching.

Thanks so much for listening, guys. if you're interested in setting up a Shopify store and getting a free trial definitely check out my link ecommerceparadise.com slash Shopify Shopify is the platform I use it's easy to learn, easy to use it's the best one out there now so check that out alright and make sure you subscribe and I will see you in the next episode take care.