4) For niche markets that do not have their needs adequately met, conduct research on major businesses in that field. If there are no major competitors, you can congratulate yourself on finding a suitable niche market for your Drop Ship business. If there are several major market players, you have to either develop a Unique Selling Proposition (USP) to differentiate your products from your competitors, or you can narrow down definition of your niche market to a more specific level. For example, if your niche market is group of individuals passionate about oil paintings, you can narrow down your focus to abstract oil paintings by Rembrandt or Renoir.

If you want to be a retailer of Rembrandt oil paintings, for example, note that your competitors are not websites selling oil paintings from all artists, but websites that focus only on Rembrandt oil paintings. All things being equal, an online shopper will certainly choose a website focusing only on Rembrandt oil paintings, instead of a website selling paintings from all famous artists. This is edge that a niche market can give to a small Drop Ship business.

You can use free Overture ‘View Bids Tool’ available at http://uv.bidtool.overture.com/d/search/tools/bidtool/ to gauge competition for your products. Overture is a Pay-Per-Click search engine, which provides search results ranked in order of how much businesses are paying for every click-through to business websites. This tool lists amount that each business is paying for every click by visitors. The higher bid for keyword, more popular keyword, thus stronger competition you face for your products.

5) Test your market. Once you have confirmed your niche market, you must test your products for that market. Start off your business by selecting a few of most popular products and placing them in your catalogue. Next, you announce your products to newsgroups and discussion boards and gauge their response to your products. Observe how well individuals are reacting to introduction of your products. If you did your research properly and fulfilled a need well, most probably you would receive a very warm response from forums and newsgroups.

Finally, as online retailer for your niche market, you should aim to be best online resource for market. Articles, strategies and guides should be included on your website to provide your niche market with valuable information. For example, you can write your own guides on how to properly use tools for magician tricks if that is what you are selling. However, it is not advisable to start off by selling an enormous catalogue of products. You should first establish your credibility by supplying your market with useful know-how for products, and recommending them a few popular products. As your business stabilizes, you can slowly expand your business catalogue to include other products.

Selecting a niche market is one of most important steps for setting up a Drop Ship business. It lays foundation for how your business will develop in future. Thus, spend some time carefully deciding on your niche market before taking plunge into your business.

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Additioanlly, while you are making your URL well known, make sure your web page is professional and accommodating to consumers. Make sure that checkout process is easy and convenient as well as secure. Using payment systems like Paypal might be a good idea for you because it allows a variety of paymet methods in many different currencies.

Advertising online does not have to be expensive. You can trade links with other relevant web pages, submit newsletters and articles to online ezines and directories with a resource box with a URL directing readers to your website. You can do banners and other paid advertising, but if you don’t have much of a budget try all of free options before you start paying money you do not have. As your business grow, your advertising budget can grow as well.

As long as you are creative and proactive in finding inexpensive and/or free advertising your business will grow, your revenues will grow and you will not be spending much at all on advertising. Remember, more people that are aware of your web page, increases traffic, referrals and ultimately purchases. Make sure your URL is visible to as many people as possible in as many places as possible.