Although getting into the dropshipping business doesn’t seem challenging on the grounds that it doesn’t require a major investment, it still poses challenges.
You might be confused between choosing a niche or a general store. The difference between the two models is palpable.
One sells one type of product to a specific market, while the other sells many different things to a wide range of customers who don’t always have anything in common. No matter what you end up with, dropshipping remains a lucrative business because the demand for goods keeps on increasing.
A steady supply of goods is necessary to meet the surge. Your role as a dropshipper is to act as the middleman, connecting a manufacturer and buyers. Dropshipping is defined as a process whereby an individual or a group sells a product they don’t stock. Their job is to take an order and notify the manufacturer about it so it can be processed.
The reason why it’s considered low risk is because there’s no need to keep goods in stock. Is a niche store better than a general store? Please strap on your seat belt because we have a lot of information to share on this topic.
1. Niche Store
A niche store is a store that sells products within a specific niche. The narrow range of items on offer creates the impression that it sells fewer items than a general store. This is true to an extent, but let’s not forget that one niche can consist of a bunch of items, too. We can take Smartphone accessories as an example. This category can fit in many goods, such as charger heads, SD cards, protective cases, earbuds, power banks, magnifying lenses, selfie sticks, etc. You’ll never run out of ideas because new releases from these subcategories are put out regularly.
What’s good about a niche store?
A. Capitalizes on social media reach
With a niche store, you can leverage your social media reach to generate more sales. Targeting a specific audience means it would be easy to set up social media accounts and link them together because the followers share similar interests.
B. More focus on promotion
Another benefit of having a niche store is you won’t be distracted with too many items. This makes building an e-Commerce store a lot easier as you can put in more effort to optimize the on-page and off-page SEO rather than stress over what products to add to the catalogue. This is especially true if you only have a small team to do everything or worse, you’re self-employed.
C. Higher chance of repeat purchases
A niche store will also benefit from repeat purchases. Why? That’s because buyers are more inclined to become loyal customers when they realize that a store caters to their needs. They have confidence that the new arrivals will pique their interest.
D. Easier to upsell
Other than the aforesaid, this store allows you to upsell without being pushy. It’s rooted in the notion that a customer will be more tempted to upgrade when they buy something from a niche store. For the record, upselling is a strategy to entice someone to buy a more expensive version of an item with the aim to maximize profit.
What’s bad about a niche store?
A. Needs in-depth research
This type of store requires extensive research because you don’t want to tap into a market that makes it difficult for your store to progress. It could because the niche is too small that the potential customers are limited, or it’s too specific that you rarely see new arrivals to keep the inventory fresh.
B. Unpredictable outcome
Another thing that dropshippers worries is if the store fails to achieve the intended results. If a store fails to make an impact, you either have to let it go or be content with the unsatisfactory sales.
Who is a niche store best for?
It’s best for a specific target audience. Just because a store serves a specific group doesn’t mean it’s not profitable. You can still get much profit out of this business model as long as it generates a lot of sales.
2. General store
What’s good about a general store?
A. Greater flexibility
A general store has the advantage of being flexible at the start. You can begin with any niche without fear that it will look out of place later. As said before, this type of store can sell products from categories that don’t intersect. There’s no guilt over selecting items because you can abandon those that don’t sell and focus on ones that bring in sales. A niche store doesn’t have this luxury since upfront niche and market research is key to making it profitable.
B. Communicates with diverse audiences
Since a general store can virtually sell anything, the opportunity to reach various market segments is wide open. You can cater to bakers by selling baking supplies, and at the same time you can also appeal to hobbyists by selling diecast toys, RC vehicles, video games, etc.
C. Taps into more niches
Another advantage of running a general store is you can test many niches. As time passes, you can explore more and analyze the competition along with their profitability. You can use the insightful information to launch a specialty store in case you have an interest in that.
What’s bad about a general store?
A. Low conversion rate
Many visitors come to general stores only to check out products for comparison purposes. They have no intent to buy unless the store is reputable enough for them to place an order and complete the transaction. And even if a purchase is made, the buyer won’t easily be converted into a loyal customer who makes frequent visits.
B. Untargeted traffic
The fact that a general store sells an extensive line of goods will attract visitors with different interests. Not that it’s a bad thing, but that means you should prepare for higher bandwidth to accommodate the high traffic. Coupled with the low conversion rate, it’s easy to conclude why some think it’s not worth the marketing budget.
C. Difficult to build an effective SEO strategy
When you aim for several niches, your attention will be divided between them. As a result, you must bend over backwards to outdo the competition or make a dent in the segments you’re trying to penetrate.
Who is a general store best for?
A general store’s target audience depends on the product it sells, but it has a broader audience than a niche store because of its diverse nature. Meanwhile, from the business standpoint, a general store would suit anyone who doesn’t want to do strong market research before creating a store.
3. One Product Store
A one product store is exactly like the name implies. It’s a type of store that sells only one product. These stores are actually more popular than you think. Of course, they also come with advantages and disadvantages. Here are some you should know about.
What’s good about a one product store?
A. More manageable
This store model is a lot more manageable than a general store because you don’t have to keep up to date with the flow of new products. Even if the product you sell releases new versions regularly, it remains simpler than organizing a store with a myriad of items.
B. Easier to rise above the competition
A one product store needs prior marketing research because you’d want to enter a segment with a moderate level of competition. Analyzing the rivals in a specific segment helps you map out a clever strategy to stay one step ahead.
C. Gives a sense of trust
A dropshipping website dedicated to explaining one product will create a sense of trust because you can post many articles highlighting the key features. Buyers will be more compelled to buy if they feel enlightened about the quality of a product.
What’s bad about a one product store?
A. No cross selling
One of the biggest drawbacks of a one product store is there’s no opportunity for cross-selling. Cross-selling is a technique to persuade buyers to buy more than what they originally want. It’s technically impossible to do it in this store model since you have just one item up for sale.
Who is a single/one product store best for?
The target market for a one product store is people who are interested in using the product and this group is not big to begin with. That said, focusing on a smaller market isn’t necessarily a bad thing. Remember that quality traffic is more likely to convert into sales, so it’s a viable business model all things considered.
Wrap up: is a niche store better than a general store?
We have to see the comparison from different points of view. Each store model has its own benefits and risks, so it’s unfair to say one is better than the other. It comes down to what you want to achieve. If you’re clueless about conducting market research, a general store would be more appropriate. However, being too general could be a distraction rather than an aid, so please think carefully before you make the next business move.