It’s time to update this list of our hottest online niches for 2022!
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 trending and in demand in Canada, while not being in a saturated niche or selling products that are 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). Alternately, we can sell to Americans or in many other countries.
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Reducing the Risk
Having a wide range of choices is one of the benefits of doing business online, but it can also make it harder to choose a promising niche. Nobody wants to bet heavily on products without a reasonable chance of success. Being stuck with stagnant inventory is a seller’s worst nightmare. Research and testing can help to mitigate that risk.
My Secret Weapon – Drop Shipping
Drop shipping is the perfect way to lower the risk of choosing the wrong niche or product. With no inventory to worry about, we can test-run virtually any product. Drop shipping is a business model in itself. You may decide to continue with it, or bring in the best-selling products for resale and continue drop shipping other products.
Some of the most popular drop shipping suppliers among Canadians are accessed through Wholesale2B and more recently, Syncee. Ecommerce platforms like Shopify make it incredibly easy to add drop-shipped products through apps.
For more information about drop shipping in Canada, please read Drop Shipping / Wholesale for Canadian Sellers.
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. Before joining the affiliate program, you’ll have 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. Check out The Best Affiliate Program Networks for Canadians for more options.
Learn more in our big guide, How to Start Affiliate Marketing in Canada.
Data and Analysis Reveals Solid Trends
Your sales data is invaluable as you test new products, but when it comes to industry trends we rely heavily on Canadian and North American data for those markets.
“Analyze the market to uncover industry trends,” suggests SEMRush in What Ecommerce Trends Will Define 2022? “Capitalizing on some… trends depends on first recognizing how they relate to your business and being able capitalize on them. Studying markets and their audiences constantly will help you establish better strategies.”
Rolling with the Punches
Of course, everything changed in 2020. Online shopping soared and it isn’t expected to drop by any significant degree after the crisis has passed. Most Canadians were already enthusiastic online shoppers, but they placed more orders in 2020. Others started shopping online out of necessity, but will probably continue to do so now that they’re comfortable with it.
The biggest shakeup in 2020 and 2021 wasn’t the increase in online shopping, but the mass movement of Canadian businesses into the digital market. For whatever reason, most small businesses in Canada had resisted digital adoption and online sales until the pandemic forced their hand. The movement will continue into 2022, as businesses scramble to recover from offline losses and realize how critical it is to be online. It’s a crucial part of today’s contingency plans.
Additionally, new online businesses will pop up faster as Canadians look for their own backup plan, be it fulltime or a side hustle. There is a wealth of legitimate online opportunities beyond ecommerce, just waiting to be discovered.
My Hottest Online Niches in Canada
I’ve worked with a lot of products and merchants online in various capacities for more than 20 years. That gives me unique insights into the Canadian digital market.
Reacting to current trends with new products can be a dangerous game and is best left to those qualified to hit a moving target. The trick is in predicting what will change and how permanent those changes will be.
We saw an uptick in all ecommerce and website traffic and thought it best not to introduce a lot of new products for most of the year. While many have profited from items directly related to the pandemic, we chose to focus on its impact on long-term consumer behaviour.
For example, working from home is expected to continue for many positions. What do people need to work from home? Electronics, office furniture & supplies, and maybe renovate a room for a quiet home office. Those are the obvious trends. When we apply it to our niches, all sorts of opportunities present themselves.
Our natural pet care niche has steadily grown in online sales because people are working from home. Now they can be home to care for a new pet and they’ll enjoy the company, so they get one. As new pet parents, or those with a growing family of them, they need everything from dog beds to premium food. If they’re new at it, they’ll be interested in pet care books and tutorials. That can be turned into another revenue stream, increase traffic or be used as a free download to grow our email list.
“Canadians spent more than $5.7 billion on their pets this year, an increase of about $300 million compared to 2019, according to German market data firm Statista,” writes Pete Evans for CBC. “And that figure is projected to grow by more than $100 million next year, too. More than a third of all Canadian households now have a dog, and 40 per cent now have a cat, Statista says. Both figures are up from last year.”
That said, COVID has lingered far longer than anticipated. Some pandemic items will continue to sell well even after the battle is won, because they’ve become a part of our everyday life over time. For example, everyone is more aware of contagions and will continue to purchase hand sanitizer and disinfecting wipes indefinitely. We’re also considering recovery needs, from businesses roaring back to life, to mental health products to help people who are trying to deal with the trauma and loss.
In the meantime, our best-selling products within our niches naturally shifted to reflect the changing priorities of consumers trying to survive the crisis.
As always, we focus on what the market wants and how our product or service can benefit the people who want it. Trends are just another viewpoint to explore for longer-term opportunities. You’ll win some and you’ll lose some, but with practice you’ll get better at spotting the most profitable and lasting trends.
Turn to your ideal customer profiles and think about how this challenging year has impacted their life, and how your product or service can help. Head in that direction in 2022 for an increased chance at a profitable year.
Following (in no particular order) are the most consistently-lucrative product niches for me (and those I work with) this past year. Some have held steady from previous years and have proven to be solid, long-term earners. Others are newer online niches that appear to be winners right out of the gate.
- Sustainable Fashion: The sale of pre-owned clothing and accessories has become a very profitable niche. Buying used clothing was always popular here, but the sector has grown as Canadians become more aware of the environmental impact of ‘fast fashion’. Luxury items will always fly off the shelves, but don’t miss the opportunities in children’s clothing, business attire and collectibles. Forbes reported that the resale of sneakers alone brings in USD $2 billion in annual sales. Consider anything that supports the distribution of sustainable fashion as well, including platforms, apps and information. Incidentally, recommerce (selling used or excess products) in general is growing 20x faster than the broader retail market and 5x faster than off-price retailers. Having recognized a new/old opportunity, select retailers are adding used products when they had only sold new products previously. Others are taking it even further, such as the H&M Rewear Canadian recommerce marketplace.
- Specialty Fashion: Attractive, trendy fashion in plus sizes, especially 2XL & up. Many Canadians are overweight or have put on weight during the pandemic, but that doesn’t mean they don’t want to dress fashionably. Professional attire for the office has been especially popular in this niche, but it has temporarily shifted to more casual, comfortable clothes in 2021. Sportswear and streetwear are all the rage right now.
- Entrepreneur: Home business items revolving around organization, space-saving and efficiency. Mobility is still huge across the business niche. Anything that helps people work and communicate on the fly has major potential, especially if you find a gap in what’s offered by the larger B2B (Business to Business) stores. As you’ve probably guessed, tools and services that facilitate online communication and working from home have exploded in popularity in 2021.
- Health & Fitness: Natural supplements, with a focus on more obscure or trending items. Offering solutions for specific health issues can give you an edge. However, you must have legitimate expertise or experience in the category to ensure you rank well in Google’s search results. Also lucrative is the sale of anything that may be embarrassing for some to buy in person, such as adult incontinence products. Medicinal uses for Cannabis and it’s derivatives are huge right now, as are proven ways to boost immunity.
- Subscription Boxes and Recurring Deliveries: Some things still surprise me and the popularity of subscription boxes in Canada is one of them. Sixteen percent of Canadians had an online subscription for physical products in 2020. Twenty-three percent of them have over 41 subscriptions! Consumers love discovering new products, while businesses are finding success with the new channel for discovery and sales. Recurring deliveries facilitate customer loyalty and recurring revenue.
- Cannabis accessories have jumped as a niche since Canadian legalization and the pandemic has increased demand. There’s still tons of room for novelty items, whether they’re already available or something you invent yourself. Additionally, it’s the new wine and with that comes the opportunity to serve the equivalent of “wine snobs” at the high end. Many people are looking for information, leaving the door wide open for content marketing. The business opportunities for anything related to Cannabis in Canada are practically endless at this point, but make sure you’re following the law. For example, CBD is legal in Canada but only from authorized sellers & suppliers. You can stay on top of the Canadian cannabis sector by subscribing to the BNN Bloomberg newsletter, Cannabis Canada. North American Cannabis sales are expected to reach $47.3 billion USD by 2027.
- Pets: Natural everything, from food to toys. Note that Canada should reflect the American market per capita. The U.S. online pet food and supplies market is expected to reach USD 6.13 billion by 2025. Canadians spent more than $5.7 billion on their pets in 2020. Many people have added pets to their family during the pandemic, causing an uptick in sales of staples, necessities, novelties and premium products.
- Senior Citizens: Assisted living products and senior-friendly travel options have been growing steadily in recent years. Don’t underestimate or dismiss this segment of the Canadian market as too lacking in tech expertise to shop online. Seventy-one percent of Canadian seniors used the Internet in 2018 and like the rest of consumers, the pandemic forced more of them to shop online.
- Information Products & Online Education: The demand for ebooks, whitepapers and online courses has skyrocketed since 2020, when 25 percent of Canadians participated on online learning, building on the already healthy market for digital learning products. In fact, 11% of Canadians did online training or learning for the first time in 2020. Digital products do well for us because we can find or create downloads on virtually any topic, allowing us to slip them into any niche. It can be a primary source of revenue or add another revenue stream to your small business.
- Reusable Shopping Bags: It’s a little tougher to find suppliers, but shopping bags do really well if you stick to novelty bags with nice designs in large sizes. This is one product that saw a drop in 2020 because stores were concerned about hygiene. However, demand has picked up again as more stores move ahead with plans to go plastic-free due to changing city laws. Promoting them as practical gift bags over the holiday season brought in more sales. We took a tentative step into print-on-demand shopping bags in 2021, introducing unique, trendy and even personalized designs. Early data indicates they have the potential to be one of our best sellers, but I’ll know more when I update this post for 2023.
In 2022, I’m Keeping a Close Eye On…
The metaverse! There will be all sorts of related opportunities that pop up, including accessories, specializations, content, virtual real estate development, and virtual versions of almost everything ‘in real life’. The metaverse is really just the natural evolution of the internet and how we use it. What it will look like specifically is still up in the air, but there are already online businesses and creators who are doing well within it. For example, we recently learned of a 28-year-old Canadian on Asia’s top Metaverse platform making six figures as a virtual fashion influencer.
“But it goes beyond fashion,” writes Mariko Oi, an Asia business correspondent for BBC. “You can just as easily start a career as an entertainer or architect in the metaverse.”
Watch for unique metaverse opportunities in both B2C & B2B. Keep an eye on related news and what developers are up to, so you’re ready to pounce when a door opens.
If you need a website with Canadian currency, shipping options, data centres, and other Canadian functionality & features, please read:
You can learn more about starting an online store with our Checklist: How to Start an Online Store (eCommerce Business) in Canada
E-commerce is the fastest-growing segment in Canada’s digital economy. Eighty-two percent of Canadians shopped online in 2020, spending $84.4 billion online. In 2018, 73 percent of Canadians shopped online, spending $57.4 billion. Factor in the growth acceleration caused by the pandemic and the 2022 potential is astounding. Opportunities to generate revenue online in a wide variety of ways, will continue to be there for anyone who keeps their finger on the pulse of consumer demand.
??? Any questions about selling online in Canada? Please feel free to ask in the comments below or discuss this and other online business topics in the Online Business Canada Facebook group!
Note: This list of top selling product niches in Canada is updated annually. It was first published in 2015.
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Melody McKinnon's formal education is in business management, which she enhanced with more than 60 certifications revolving around business, marketing, health, general sciences and writing. In over 20 years of working online, she has owned or managed both educational and eCommerce websites.
Melody has worked with many businesses & brands in a multitude of capacities. She can often be found on CanadiansInternet.com, CanadianFamily.net and AllNaturalPetCare.com, as well as other quality digital publications. Her content has earned reference links from highly-respected websites, magazines and university textbooks.