Thinking of starting a dropshipping business, but don’t know what kind of store to set up?
Then you’ve come to the right place.
You see, most people start a dropshipping business without any clear picture of what they want to provide their customers. For them, dropshipping is about making a profit, and that’s it.
One thing you should consider carefully is what type of dropshipping store you want because your decision will make an impact on the products that you’re going to sell and, ultimately, what your store will be known for.
There are two types of dropshipping stores:
- General Store
- Niche Store
There’s also what we call Single-Product Store, but that’s a story for another post.
Now, these stores are practically the same for some people as they both need to generate revenue, but they couldn’t be more different.
Let’s take a closer look at General Stores first and see what sets it apart from the other:
What Is A General Store?
A general store offers a variety of products from different niches. It’s like a department store – only with more ease and convenience as customers get to browse and purchase things wherever they are at any time of the day with just a few clicks.
Here are what sets a general store apart from a niche store:
It’s easier to set up — No niche research or heavy branding is required. This is because you will be selling products to a broad range of audiences, spanning different demographics and interests.
There’s a higher chance of finding a winning product or niche — Selling more items creates more opportunities for you to find a winning product, which you can either scale up or turn into a brand.
General Store Examples:
The Cons Of Running A General Store
While those mentioned above may be reasons enough for you to start a general store, it also has its fair share of disadvantages.
There’s more work to do – To put it simply, having more products to sell means that you have to create more product pages to showcase each of them in detail to your customers.
It’s difficult to brand – Since a general store is like a department store, there would be no specific theme for you to brand your products with.
It has low customer loyalty and return sales – Based on the previous point, if a store is difficult to brand, then there’s no brand story to tell. That would make it harder to capture the attention of the audience, hence the low customer loyalty for general stores.
Customers would also have no reason to go back to a store filled with unrelated items after buying something from it because they likely only need what they’ve bought.
It has higher competition – Most people start a general store because they don’t have to do a lot of research, styling, and branding for it. However, this causes more competition because now anyone can set it up. There are no barriers to entry.
It’s only a matter of who can sell better, even to the point of competing on prices or offering tons of freebies.
More money is spent on Facebook Ads for product testing – If your ad doesn’t work for a specific product, you’ll have to try again with another until you find your winning product. However, it will cost you more to market to a different audience every time you test a product from other niches – especially with Facebook Ads, where you have to pay to season your Facebook Pixel with new data.
Now, let’s take a closer look at the Niche Store this time and see what makes it stand out:
What Is A Niche Store?
In dropshipping, a niche store is a store that sells goods for a specific group of people. Experts and enthusiasts usually run this type of dropshipping store; hence, you can think of it as a store built for those who share the same interests with the owner.
Here’s what makes a niche store stand out:
It’s stable – With a niche store, you only need to capture the attention of a specific group of people – and you can market your products to the same audience again and again.
You can create a brand based on what your audience need or want – Over time, you’ll get to know more about your audience. You can then tailor your marketing based on what you’ve learned about them to create a brand that will help build up their trust in your store.
There’s a higher conversion rate – Let’s put it this way: by creating a brand, you will have better credibility. And with better credibility, you will get a higher conversion rate.
There’s customer loyalty and higher return sales – Customers prefer to buy products from niche stores simply because their branding tells a consistent story that shows their sincerity towards them.
If they have a quality brand that delivers quality products, they would earn more trust and increase their sales from returning buyers who have experienced their credibility first-hand.
Product testing with Facebook Ads is less costly – You can reuse your audience on Facebook Ads to run new campaigns for your products, provided that that audience worked for you once.
You don’t even need to spend time and money to test new ads on different audiences as you can use Facebook’s Look-Alike feature, which allows you to reach more people by promoting your ad to Facebook users similar to your existing audience.
Easier to produce content – Producing content for a niche store is easier because you will become more familiar with your audience’s needs and wants. You can then use what you’ve learned about them or anything related to your store’s niche to generate better quality content for SEO.
Google ranking – Google ranks a website higher if it has interlinked related content. For example, those a product page linking to other related products.
Discovery of related products – You can showcase many related products and it proves to be a natural way to increase the average order value as your customers would likely click on anything that sparks their interest and is related to what they want to buy in the first place.
Niche Store Examples:
The Cons Of Running A Niche Store
You’ve already seen what makes a niche store stand out. However, there are some disadvantages to this kind of dropshipping store that one should think about carefully before starting one:
Fewer product choices – You will have fewer product choices with a niche store because you are only selling things intended for the specific group of people you’ve chosen. Some products might have low demand as compared to trending products in other niches.
Requires more research – To make your niche store a success, you need to do more upfront market research because you need to understand the culture of the people within the niche to provide the right kind of products for them and market these successfully.
Takes time to develop – A niche store takes more time to develop because you are selling products to a specific group of people who will likely be the only ones interested in browsing through and purchasing from your store. This is why branding and targeting the right audience for your chosen niche is a must.
General Stores vs Niche Store: A Brief Comparison
As a summary, check out this table we’ve made for you to see how general stores and niche stores compare:
|General Stores||Niche Stores|
|Product Research & Testing||Minimal research|
Lots of testing
|Product Organization||By product niche|
Offering upsell & cross-Sell options is important
|By product type|
Longer descriptions & better images to create a themed experience
|Marketing||Very sales and advertisement-heavy||Rely on branding and audience building|
|Cost & Profitability||More costly with product testing|
Higher profit margin
|Less costly with product testing|
Lower profit margin
General Store or Niche Store, Which One Is Better For You?
We have prepared two lists of questions for you to answer with YES or NO.
|Can you do branding well?||Do you know many online sales tactics?|
|Do you enjoy taking time understanding your customers to sell them what they want?||Do you enjoy repeating the cycle of import product-edit product-run ads to test the product demand and try another product if fail, scale if win?|
|Do you know any niches that you are personally acquainted with?||Do you know any current trending products?|
|Do you know how to research a niche?||Do you know how to look for winning products?|
|Are you well-versed in organic marketing (e.g. building Instagram account, Facebook page, SEO)?||Are you well-versed in PPC marketing (e.g. running Facebook Ads, Instagram Ads, Google Shopping Ads)?|
|Do you have a budget of at least $10k?||Are you low on budget?|
|Can you appreciate the importance of good design in business?||Do you know about A/B testing?|
If you answered more “YES” in List A than in List B, then a niche store is better for you.
Final Thoughts: General Store or Niche Store?
For beginners in the dropshipping industry, a general store is a more lucrative option as compared to a niche store. That’s because if they invest everything in a niche store and it doesn’t work as expected, they will have nothing left.
Here’s a tip: you can go for a sub-niche store and elevate it horizontally instead. It means that if you have selected “men’s basketball clothes,” then don’t just promote basketball clothes. You can sell anything that relates to basketball – including clothes, mobile covers, shoes, stunt cameras, and other things. This way, you can have the best of both stores.
Another tip is to start a general store testing on different products. When you find a winning product, then you can open a niche store selling that.
And oh, do you know? Running a general store on Shopify also requires you to have an extra plugin called Trackify to prevent confusion with Facebook Pixel’s calculations. Stay tuned for our next article regarding this!