Opening a dropshipping business can be a great source of income if properly executed. But, before you begin building an online storefront, there are several key decisions you will need to make. You'll need to decide what you want to focus on selling. Another big decision you'll need to make is whether you are more interested in general or one-product stores.
Unless you are a big company like Amazon or Walmart, it is likely not a good idea to try to sell everything and anything. Those companies are marketplaces where merchants generally compete on price. Dropshipping stores compete differently, usually in terms of brand image and value.
What allows small businesses to compete with big conglomerates like Amazon is their focus on a single niche, or even on a single product, and their ability to cater to that market better than the competition. If you are in fitness, chances are your audience doesn't want to buy electronics from you, and vice versa. Instead, you can focus on becoming an authority in fitness accessories. Then customers may choose the value that your brand brings over that of big names like Amazon.
In this article, we will be taking a look at the differences between creating a one-product store and a general store, and we will conclude by offering you some pros and cons of each option.
A one-product store is a store that offers a single product, or a single product line. You may choose to still offer some add-ons or accessories related to the product, but the premise of the store is clear: the entire focus is on that product.
While some people may think that this is a risky strategy due to all your eggs being in one basket, other people will see that this is a fundamentally simpler option, especially if you have correctly done your market research and chosen a reliable supplier.
A perfect example of a 1-product store is SNOOZ. If you look at their website, you'll see that it is fairly simple. The home page is optimized to sell you on the SNOOZ, and there are no other products listed. It's not going to be the right product for everyone, but the people who are looking for a white noise machine will definitely remember the brand.
Advantages of One-Product Stores:
One-product stores are able to apply all of their efforts on a single market or niche. This makes marketing much simpler. Rather than trying to promote a big catalog of products, you focus on serving a smaller segment of the market. This means that your traffic will have a higher level of interest since you're only advertising a single product. The result is a higher conversion rate for your store.
It is also easier to convert a single product into a brand. I’m sure most of us remember the age of infomercials with popular products like the Shamwow, OxyClean, or Slap Chop. While this is a dated example, it is relevant because those products all had a brand built around them. It’s easier to sell a single branded product like the Shamwow because the customer knows that they won’t be able to find an exact replacement elsewhere.
One-Product stores are also simpler. Since they offer fewer products than a general store, you will likely only be dealing with one or a few suppliers. This means there will be fewer relationships with suppliers to manage, which usually implies a less complicated supply chain. You also only need to come up with marketing strategies for a single product, which makes marketing easier.
Testing is also easier when you have fewer variables (i.e. products) in play. If you have a one-product store, all of your metrics and analytics will be related to that product. General stores can muddy this up. Even if you implement your analytics perfectly, you'll have much more data to analyze.
Disadvantages of One-Product Stores:
One of the biggest risks of starting a one-product store can be summarized as choosing the wrong product. Insufficient market research can cause you to build an entire brand around a losing product. Or, you might select a value proposition that isn’t aligned with what the consumers want. You will also have a greater reliance on suppliers. This can upset your business should you place your trust in the wrong hands.
Furthermore, one-product stores are quite rigid and inflexible. If you build a general store and the trend changes, you can simply offer different products that reflect the new consumer tastes and preferences. You can also switch your focus to other products if one isn't working out. But, you can’t make many changes to a one-product store without hurting your credibility and brand image. The market can (and will) change, but your business might not be able to change with it.
Another downside of one-product stores is that they don’t offer a lot of options for increasing order value. General stores, such as Amazon, often offer consumers related products that serve to increase the order value and profit margin. One-product stores might have an add-on or two, but nowhere near the same flexibility in this regard.
A general store is essentially a store that sells a bunch of different products usually across one or a few different niches. These niches are not always related, but it can help if they are. General stores usually have more elaborate websites with anywhere from a handful of products to several hundred.
Advantages of One-Product Stores:
By offering a larger selection of products, you are increasing the odds that the customer browsing your website will find one they like. Consumers enjoy having a few options available, as long as there aren't enough to lead to choice paralysis.
General stores are usually more stable than one-product stores due to the fact that they do not rely on a single supplier. If one of your suppliers runs out of stock or chooses to discontinue a product, you can continue to offer the other products without losing much of your catalogue or sales.
General stores are also more flexible than one-product stores because you are able to test several niches and products at the same time. To be effective with a one-product store, your product testing and market research needs to be on-point. This is because you can't make much progress without committing to a single product. General stores can test products or niches without overly committing to one, providing you with the hard data that only a live store can offer.
General stores can be quicker and easier to set up than one-product stores since you are less concerned with creating a sales funnel for a single product. To make an effective single-product store, you will likely need some proprietary product photos, ad copy, and more. Since general stores don’t rely on a single product being optimized, the stakes for content surrounding each product are less high.
Lastly, general stores are better suited to survive over the long-term. This is because they are able to change their product offerings without seriously harming the brand of the business. If the consumer trends change or an important new product comes out, then you can simply add it to your store without changing much else.
Disadvantages of One-Product Stores:
General stores are less brandable than one-product stores. Private-labelling a single product is doable (and a good strategy) but you are likely not going to be able to private-label an entire collection. Especially if you are dropshipping. You are more likely to be selling a bunch of products with other brand names on them, and this will leave less of an impression on your customers.
General stores also have lower conversion rates than one-product stores. If someone clicks through your ad on a one-product store, then they are probably interested in that product. You can put them in a funnel and keep engaging with them until they purchase. With general stores, on the other hand, most of your traffic will just browse your catalog without purchasing anything. This has the added burden of using your server bandwidth on visitors who don't have any intentions of purchasing and can slow down your site for your paying customers.
General stores require much complicated than single-product stores. Rather than just editing one product's description, you'll have to edit all of them. You have to monitor inventory for all of your products. You need high-quality photos of all of your products. Basically, the effort you're required to exert (to do it well) gets multiplied.
General stores also have more competition than one-product stores. Rather than competing with sellers of a single product, you are suddenly competing with hundreds of other businesses. They will have different offers in terms of price, shipping speed, return policy, and branding. It's more difficult to occupy a space in your customer's mind when you aren't focused.
Lastly, it is harder to market a collection of products than it is to market a single product. Whether you choose to develop marketing strategies for all or your products or just a select few, the process is going to be several times more complicated than it would be for a single product store.
Both one-product and general stores are viable options for starting a dropshipping business. Which store type you decide to go with will likely depend on a variety of factors such as your experience level, your market research skills, your marketing budget, and your goals,
General stores are beginner-friendly and will allow you to test multiple niches and products without changing your infrastructure.
One-product stores can inspire more brand loyalty and can lead to higher conversion rates due to your focus on a smaller audience.
At the end of the day, there are no right answers. The best option will depend on what you are looking to achieve.
But, if you are just starting out, we recommend you try creating a general store to start. This will provide you with some flexibility and will allow you to acquire some hard data before you commit your efforts to a single product. Your focus should initially be on learning, and by validating your learnings with real data about how customers behave. Once you have established this foundation, you will be free to make educated decisions about what is right for your business.
If you're going to try dropshipping, make sure to check out Shopify. Shopify is the leading platform for online storefronts, and they are currently offering a 14-day free trial. All you have to do is click here.
If you're looking for products to dropship, then make sure to check out DropCommerce. Our platform has over 25,000 products, all shipping from high quality suppliers located in North America. You can set up a free trial by clicking here!