You’ve decided to give dropshipping a try; what next? Time to choose the type of store you want to establish and what niche to go for.
Before starting your dropshipping business, you need to decide on the type of online store you want to open. Although there are many variations of dropshipping stores, most of them tend to fall into one of the following categories: general stores, single-product stores, and branded niche dropshipping. Let’s explore each option one by one.
General Dropshipping Stores
Think of Walmart or any other store that sells a wide range of products. General dropshipping stores tend to include a wide variety of products that are not closely connected to one another. For example, suppose you choose to source items from different categories, such as clothing, gardening tools, skincare, and electronics, and add all of them to your store simultaneously. In that case, you have a general store on your hands.
Dropshippers may choose to go with a general store for the following reasons: it brings in a broader audience, allows you to test an extensive variety of products, appeals to many customers at once, offers more stability, and doesn’t require significant market research. Now, all of this may sound appealing at first glance, but general stores tend to have a few prominent drawbacks. First of all, general stores often look like a cluster of random things, which can discourage customers from making a purchase.
Likewise, the absence of niche products can make it difficult to create an effective marketing strategy, rank for specific keywords, or even engage in influencer marketing due to a lack of direction. And finally, it is significantly challenging to develop a brand for this type of dropshipping store.
Single Product Stores
This type of dropshipping store is essentially the exact opposite of a general store. Since the entire website is focused on one item, Single product stores tend to have a higher success rate compared to general stores. Frequently, dropshippers will look for trending products and create a single-product store, but the success can be short-lived if the trend doesn’t last.
Moreover, this model is often chosen because it allows targeting specific consumers with ease. Also, marketing efforts are significantly more organized due to the narrow focus, and conversion rates tend to be quite satisfactory. Nonetheless, one product stores have a greater risk of failure, so you must be willing to invest time, effort, and money into making this model work for you.
Branded Niche Stores
Many dropshipping stores tend to fit into this category and for a very good reason. This type of store sells products that have a unifying feature, e.g., women’s apparel, organic skincare, hiking gear, gym apparel, aromatherapy, etc. A large percentage of dropshippers prefer this type of store because it allows for better branding opportunities, facilitates targeting a specific audience, and removes the limits that would come with a single product store.
Likewise, there is no need to continually search for viral products since you already have a specific niche. Branded niche dropshipping gives you the best of both worlds. You appeal to a broader audience, as opposed to the one product store, and avoid the clutter and reduced branding opportunities that come with setting up a general store.
Plus, niche stores are why many customers prefer buying from dropshippers instead of wholesalers in the first place; instead of browsing through thousands of products on sites like Aliexpress, they can choose from a narrower product range that tailors to their needs instead. Opening this type of store allows you to create a branded element and experience, even if you are a dropshipper.
It’s up to you to assess which model fits your vision and budget best. Consider doing some further research on all three categories, analyzing the pros and cons, and choosing what works for you.
Choosing Your Dropshipping Niche
When choosing a niche, a good way to start is by considering your own interests. Are you passionate about sports? Photography? Styling clothes? Hair or skincare? Although it isn’t an absolute necessity to do so, being passionate about what you are sourcing and selling can definitely increase your chances of success.
Regardless of whether you have chosen a sphere you are passionate about or not, the next step is carrying out market research to understand whether your chosen niche is in demand. One of the tools you can use to check this aspect is Google Trends. Enter keywords related to niches you are exploring and see if people are searching for them. Also, you will be able to determine whether your niche is either trending or steady, based on the graph Google will generate.
To avoid leaving the impression of a general store, try to segment your niche. For example, if you have chosen the clothing industry, you could classify it into women’s clothing, then into women’s underwear, or business attire. A more segmented niche will have a positive impact on your future marketing efforts. Likewise, make sure suppliers that cater to your chosen niche are available and supply good-quality products.
Steady vs. Trending Niches
Dropshippers often find themselves plagued with the following question: take the risk and start selling trending products, or go for a more steady business model? Selling trending products can reward you with short-term success and facilitate your marketing efforts (since the products are already popular). However, what goes up must come down eventually. There is no guarantee that a trending niche will remain at the top of the charts for an extended period, which may cause you to lose out in the long run if you’ve dedicated your entire eCommerce website to a fleeting trend.
Let’s consider a relevant example - the demand for medical masks in 2020. Although medical masks were trending earlier last year, people eventually stopped searching for this term as often as they did at the start. People have stocked up on masks, decided to purchase reusable ones, or even stopped taking the pandemic as seriously as they were at the beginning - not the best factor of influence, but a factor nonetheless. According to results on Google Trends, you could have gained short-term success by selling masks from February to April, but not so much after that. However, the profits earned during that period could have been pretty significant, so it’s still up to you to decide whether the risk is worth it.
On a different note, let’s take the market for essential oils as an alternative healing and relaxation method. People will always remain relatively interested in natural medicine, but popularity can fluctuate depending on local and global events. As the image below depicts, people did purchase more essential oils at the beginning of the year (during the first wave of COVID-19), and the trend seems to be going up again during the second wave. Nonetheless, no major fluctuations were recorded, deeming the niche relatively steady. Sure, you may face stronger competition when choosing a steady niche and may not generate mind-blowing profits initially. Still, there is a greater chance of achieving long-term success and financial stability.
We’re not here to tell you that steady niches are better than trending niches, or vice versa - quite the contrary. It’s necessary to acknowledge that both paths may turn out to benefit the growth of your business. However, one option presents higher risks than the other. Of course, there is also the possibility that you will choose a strategy somewhere in between.
Let’s imagine that you decided to open a dropshipping store centered around skincare (a relatively steady niche). Add the essential products to your storefront first, and then check if there are any trending products in your chosen niche. Add a couple of trending products to your overall catalog, and see how they perform. That way, you can still enjoy the benefits of following eCommerce trends but without putting your retail business at risk.
Now that you know about the different types of dropshipping stores and how to choose your niche, it’s time to get down to business and learn about dropshipping platforms!