When starting your dropshipping business, you run in to the dilemma of whether to open a niche or general store. Many Shopify ‘gurus’ will bring out videos detailing their thoughts on the matter.
However, a lot of times this is done with the intention of selling their overpriced course. This article will present the pros and cons of both types of store in a logical manner, allowing you to make your own decision.
Niche stores offer a plethora of benefits. If you’re just getting started with digital advertising, it will be much easier to identify your target audience. For example, you’re starting up a Print on Demand store for Real Madrid. It could be as simple as targeting Facebook users who have liked the Real Madrid page as well as several players personal pages.
As you are targeting such focused traffic, you are likely to enjoy a noticeably higher conversion rate. You are putting a specific offer in front of a specific group of people who are more likely to purchase.
However, these stores can fade relatively quickly. A great example of this was the fidget spinner fad. Many store owners were making tens of thousands of dollars selling solely fidget spinners. When the trend faded, they stopped bringing in this revenue and had to restart from scratch.
Moreover, your cost per customer will likely significantly increase. The less people in your chosen Facebook audience, the higher your average costs will be. For example, it would be much cheaper to target 18-35-year-old women in the US than it would be to find people who are fans of Real Madrid who also like tennis.
General stores could also prove to be a great option. They let you test out more products, so you aren’t as negatively affected if one product fails to sell. For example, if you run a technology accessory store, you have more potential products to sell than if you just sold selfie sticks.
Furthermore, it will cost you less to get effective traffic to your site. The beauty of a general store is that you have a large potential customer base, which will keep your Facebook ads down. If your site is optimised for conversions, this will in turn decrease your average cost of customer.
However, it can be difficult to truly identify your ideal customer. You likely aren’t targeting users with a specific set of interests or behaviours on Facebook. Once you get more data on your Facebook pixel, it may then prove more difficult to scale with Lookalike audiences.
Ultimately, both of these options have their pros and cons. Whether you choose a niche or general store isn’t the sole factor in determining your success. Consistently apply the fundamentals and you’ll become profitable in the long-term.
That being said, as a beginning dropshipper you may be better off going with a general store that allows you to test more products. An effective general store will also likely help you identify profitable niches that you could then base a niche store around.