Updated: 2022-03-17 17:34:52
Since the epidemic restricted people from going out, more and more people have joined the rank of making money online. And dropshipping is one of the most popular business models worldwide. People can purchase products from one country and sell them all over the world only with a computer at home.
But many people have a lot of questions about how to start dropshipping. There are three common online store models for dropshipping: general stores, niche stores, and one-product stores. It is kind of difficult for beginners to decide which dropshipping store model is the better one to choose. So, in this article, we will talk about the three store models of dropshipping.
Different from traditional retail, dropshipping is a business model that allows retailers to sell online all over the world without keeping inventory. There is a third-party supplier that takes care of the product production, warehousing, packing, and direct shipping to the customers. During the whole process, the retailers have zero contact with products but can achieve profitability through only one computer and one online store. It is the e-commerce business model that has been popular around the world for years.
Dropshipping is flexible, low-risk, and easy to start. It is very suitable as a side business. Based on different choices of niches and products, dropshipping usually has three store models: general stores, niche stores, and one-product stores.
General stores are the most common in dropshipping stores, and there is not much pressure on store layout and product selection. Dropshipping beginners usually like to use this model, selecting the current hot-selling products and adding them to the store. For example, the products in the following stores cover multiple niches. They have clear product categories and streamlined store layouts, which look professional.
If you can't find a niche, category, or product that you are familiar with, then you can choose as many potential products as possible and start with the general store model. The disadvantage of this kind of store is that it is difficult to build a brand and customer trust, so the rate of customer repurchasing will be relatively low, which is not good for building loyal customer relationships.
But the benefit is that by running a general store, you can test products through multiple dimensions until you find a winning product, then you are able to build a niche store or brand with that product!
For example, if you have products in many different niches in your general store, and after operating for weeks, you find a gadget in the fitness niche that sells well, Then you might decide to build a new store around that product. You can also add more fitness products to the store, making it a fitness niche dropshipping store. And you'll have the opportunity to grow your store into a real fitness brand!
Niche stores can be understood in two ways: One is a store that focuses on a specific niche or customer group as mentioned above, such as fitness, pets, women's clothing, etc. Another is a store that focuses on a specific element or brand, such as a store with a range of products with a strawberry element, or a store with a variety of products printed with store brand labels.
The following two stores are good niche store examples. The first one focuses on a variety of phone accessories, mainly phone cases, and features a distinct marbling element. And another one focuses on a variety of men's accessories printed with the store brand logo.
Compared with general stores, the unit price of products in niche stores is usually higher. For example, a phone case is about 20-30 dollars in a general store, but it can be 60-70 dollars in a niche store. And niche stores or brands make consumers think that you are the expert in this niche, resulting in a sense of trust. In addition, the added value brought by the store brand can bring you more profit. Therefore, from a long-term perspective, a niche store is a better choice for dropshipping.
However, the disadvantage of niche store is that it is relatively difficult to start. It requires good product selection, operation capabilities, and a great marketing and promotion plan. You'll have to spend more energy and time.
You can use ShopiStores to analyze and refer to more successful Shopify dropshipping stores. This tool ranks some Shopify stores, and you will find that most of the top stores on the page are niche or brand stores. These stores usually have a large amount of audience. So choosing the right niche is very important, because if you choose a niche with a small audience, you will lose your competitive advantage in acquiring traffic.
One-product stores focus on selling only one product, and may also cross-sell with related products. It's a clear shift from the general store full of products and promotions. The general store can lead to the trap of wasting energy on a few mediocre products. Conversely, a one-product store allows you to focus on one great product and make it the best. You may start focusing more on what your customers really need, reaching out to untapped niches.
Selling only one product has many benefits, you can focus on one product and continuously improve its quality. It is also easier to manage. Your marketing activities only need to be devoted to one product, and advertising will be more efficient. In addition, a one-product store can make it easier for customers to remember your product and associate with your brand, which is more conducive to brand promotion.
Of course, the one-product store model is not suitable for all dropshipping sellers. You should know its downsides. One-product stores have stricter requirements for product selection because there are few options for cross-selling in such stores. Once the product fails, it means the failure of the entire dropshipping store. And once the customers find alternatives to your product, they will not buy anything from you again. So choosing only one product to start dropshipping is risky for beginners. It is more suitable for experienced drop shipping sellers who have found the best product after running a general store or niche store model.
A private label product is manufactured by a third-party company and sold under the retailer’s brand. Private labeling is not only suitable for traditional retail but also widely used in dropshipping. Usually, branded dropshipping store owners build their brands through private label customization. Dropshipping sellers cooperate with dropshipping suppliers, and suppliers produce the products and packaging with the seller's brand labels and ship them directly to customers.
The benefits of private labeling come from the high product pricing, good visibility, and high-profit margins brought by branding. Products with your own brand label can quickly differentiate your store from the competitors.
However, the disadvantages of private labeling should not be underestimated. First, brand customization will bring you a higher up-front cost. Second, compared with existing well-known brands, it is difficult for your brand to be quickly known and accepted by the public.
For dropshipping sellers, they have little control over the production and packaging of the product, and no one can guarantee whether the supplier will maintain your brand reputation for you. Therefore, some small business owners choose to wholesale the products to their own small workshops to label the products themselves, but that will generate additional management fees and labor costs.
It is not recommended for beginners to directly carry out a private labeling business. But if you are an experienced and brand-conscious dropshipping seller, you might as well try to switch your business to private labeling.
Print-on-demand is different from private labeling. Private labeling allows you to customize the product inserts, packaging, label, logo, etc. But print-on-demand gives you a wide range of customization. You are able to print any unique artwork or design on white label products such as T-shirts and mugs, then sell them under your own brand. And the production, printing, packaging, and shipping will be completed by a third-party supplier. It is as easy as dropshipping without keeping any inventory. So if you are a creator or artist, you can focus more on creating while making money by a small print-on-demand business.
Print-on-demand is relatively niche, aiming to provide original design products for niche customers. There are only a few suppliers that can provide excellent print-on-demand services. And print-on-demand has a limited selection of products, long production and shipping times.
For dropshipping beginners, if you couldn't decide which niche to start with, then the general store model is a better choice. You only need to start with hot-selling products, and it is more likely to succeed. When your store runs stably, you can choose the best-selling niche product and convert your store to a niche store or a one-product store.
If you have found a profitable niche that you are interested in, you can start directly with the niche store model, which is more challenging but helps you build your brand over time.
The one-product store model could be the most difficult for beginners. It is recommended to start with the above two models and switch to a one-product store after forming a brand.
If you already have a plan in mind, then find a reliable dropshipping supplier to get started.