It’s time to update this list of our hottest online niches for 2020!
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 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 accessed through Wholesale2B (for a complete solution) and World Wide Brands (directory of certified wholesale drop shippers). Ecommerce platforms like Shopify make it incredibly easy to add dropshipped 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. 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. 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.
My Hottest Online Niches in Canada
I’ve worked with a lot of products and merchants in various capacities for more than 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 with) this year. Some have held steady from previous years and have proven to be solid, long-term earners. Others are new 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 recently 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.
- Specialty Fashion: Attractive, trendy fashion in plus sizes, especially 2XL & up. Many Canadians are overweight, but that doesn’t mean they don’t want to dress fashionably. Professional attire for the office has been especially popular in this niche lately.
- 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.
- 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.
- Subscription Boxes and Recurring Deliveries: Some things still surprise me and the popularity of subscription boxes in Canada is one of them. Eleven percent of Canadians have ordered an average of two subscription boxes in the past year. Twenty-three percent have over 41 subscriptions! Consumers love discovering new products, while businesses are finding success with the new channel for discovery and sales. Recurring deliveries, of course, facilitate customer loyalty and recurring revenue.
- Cannabis accessories have exploded as a niche since Canadian legalization. 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. 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 in 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.
- Senior Citizens: Assisted living products and senior-friendly travel. Seventy-one percent of Canadian seniors used the Internet in 2018.
- Information Products & Online Education: eBooks, whitepapers and online courses. Online learning 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 & Utensils: 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. Reusable utensils are expected to be big as more cities ban single-use plastics. Anything that makes these items more environmentally friendly, including fast biodegration, has a lot of potential at the B2B level as well. This is a niche that requires testing though. For example, reusable utensils require more innovative solutions that make them easy to clean and carry. Otherwise, people dismiss them as too inconvenient.
If you need a website with Canadian currency, Canada Post shipping options, Canadian servers, etc., 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, going from $4.2 billion in 2010 to over $13.6 billion in 2017, according to Statistics Canada. The opportunities to generate revenue online 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!
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