Real World Competition Guide

Step-by-Step Guide: Research Real-World Competition (Retail Stores + Local Market)

Use this for each niche idea you’re considering for a dropshipping store

Step 1: Set Up Your “Competition Notes” Template (1 per niche)

Create a doc/spreadsheet page for each niche with these sections:

  • Niche Idea:

  • Target Customer:

  • Problem Solved:

  • Primary Product Types:

  • Local Competitors Found:

  • Retail Pricing Range:

  • Best-Selling / Most Visible Items:

  • Quality + Branding Notes:

  • Gaps & Opportunities:

  • How We’d Differentiate Online:

  • Verdict (Green/Yellow/Red):

Step 2: Identify 5–10 Retail Store Types That Would Sell This Niche

For each niche, list where a customer would already buy these items locally.

Examples of store categories:

  • Big box: Walmart, Target, Costco

  • Specialty: pet store, fitness store, beauty supply, baby store

  • Home: Home Depot, Lowe’s, IKEA, At Home, HomeGoods

  • Grocery + pharmacy: CVS, Walgreens, Kroger

  • Local: boutiques, gift shops, farmers markets, mall kiosks

  • Discount: TJ Maxx, Ross, Dollar stores

  • Hobby: outdoor stores, craft stores, gaming stores

Action (per niche):
Write down at least 6 store types that could carry your niche products.

Step 3: Do a “Local Search Sweep” (Map It)

Search your area using Google Maps (or Apple Maps).

Use searches like:

  • “pet store near me”

  • “home organization store near me”

  • “fitness equipment store near me”

  • “baby boutique near me”

  • “beauty supply near me”

Action (per niche):

  • Find 10 relevant stores

  • Save/store their names

  • Note distance and rating

Step 4: Decide Your 3-Store “Field Test Route”

Choose:

  • 1 big box

  • 1 specialty store

  • 1 discount or local boutique/market

This gives you a realistic view of:

  • mass market pricing

  • premium pricing

  • bargain competition

Action (per niche):
Pick 3 stores you can realistically visit (or research deeply online if you can’t visit).

Step 5: In-Store Competitive Audit (What to Look For)

When you’re in the store, your goal is not “copy products.”
Your goal is to understand how the market sells and where gaps exist.

A. Shelf Space Test (Demand Signal)

  • Is there an entire section for this niche?

  • How many brands are present?

  • Is product stock low (selling fast) or fully stocked (slow)?

Write down:
Top 3 categories that have the most shelf space.

B. Price Ladder Test (Pricing Reality)

Capture prices at 3 levels:

  • entry price (cheapest)

  • mid price (most common)

  • premium price (highest)

Write down:
Price range + the most common price point.

C. Packaging & Branding Test (Online Opportunity)

  • Does packaging look modern or outdated?

  • Is it “generic” or strongly branded?

  • Does it explain benefits clearly?

Write down:
What makes products look trustworthy (or not).

D. Feature & Benefit Test (What They Sell, Not What It Is)

Look for phrases like:

  • “pain relief”

  • “easy to use”

  • “space saving”

  • “odor control”

  • “quick setup”

Write down:
Top 5 benefit phrases you see repeatedly.

E. Customer Behavior Test (Real Proof)

If possible, observe:

  • what people pick up

  • what they compare

  • questions they ask staff

Write down:
Any patterns or repeated questions.

Step 6: Take “Evidence Photos” (Optional but Powerful)

If allowed in your area/store:

  • product shelf section

  • price tags

  • packaging claims

  • end caps or featured displays

If photos aren’t allowed:

  • write quick bullet notes

  • record a voice memo in your car afterward

Step 7: Repeat Online: “Local Stores With Websites” Check

Even local competitors may sell online too.

Search:

  • “[Store name] + online store”

  • “[niche] + [your city] + shop”

  • “[niche] + boutique near me”

Action:
For each niche, find 3 local sellers that also sell online and note:

  • their prices

  • shipping/pickup options

  • promotions

  • website quality

Step 8: Look for Gaps You Can Win With (This Is the Gold)

You’re trying to find reasons a customer would buy from you instead.

Common “gaps” in retail/local markets:

  • confusing selection (too many choices)

  • no education (no clear “best for ___”)

  • outdated branding

  • poor bundling (everything sold separately)

  • lack of niche-specific collections

  • no community vibe

Action (per niche):
List 3 gaps you could solve with a better online experience.

Step 9: Define Your Differentiation Strategy

Pick 1–2 strong angles:

Possible differentiation angles:

  • Curated store: “Only the best solutions for X”

  • Bundles: “Complete kits”

  • Education: “Guides + how-to pages + quizzes”

  • Premium look: brand positioning

  • Speed & ease: simple buying experience

  • Audience-specific: targeted for one group only

Action:
Write your differentiation in one sentence:

“We win by doing ___ better than local stores.”

Step 10: Score the Niche Based on Competition Reality

For each niche, score 1–5:

  • Local saturation (1 = low competition, 5 = everywhere)

  • Price pressure (1 = good margins, 5 = race to bottom)

  • Differentiation possible (1 = hard, 5 = easy)

  • Customer clarity (1 = unclear buyer, 5 = obvious buyer)

  • Brand potential (1 = weak, 5 = strong)

Decision:

  • Green: proceed + validate online demand

  • Yellow: proceed only with strong differentiation

  • Red: drop it or change niche angle

“Per Niche” Checklist (Quick Version)

For each niche idea, complete:

  • ✅ 10 local stores found on maps

  • ✅ 3 stores audited (big box + specialty + discount/local)

  • ✅ price range captured

  • ✅ top products & benefit claims written down

  • ✅ 3 gaps identified

  • ✅ differentiation statement written

  • ✅ scorecard completed