In the last few decades, dropshipping has successfully emerged as an incredibly lucrative and beginner-friendly online business model. With many digital platforms such as Amazon, WooCommerce, and Shopify evolving the technical side of operating an e-commerce store, dropshipping is more accessible than ever.
Despite the ease and convenience of setting up your own dropshipping business, becoming successful is not as easy. There is always risk and possibility of failure when starting a business.
While creating and launching a website can be simple, many entrepreneurs find marketing and choosing products to be confusing and difficult. Choosing the right selection of products is important for creating a brand and message that will attract customers and promote sales. However, deciding on the best business model and products for your store can be difficult.
Choosing the Best Business Model for Your Dropshipping Store
One of the biggest dilemmas people face when starting a new business is getting stuck in the brainstorming stage. While planning ahead and making well-researched decisions can help your business succeed, fear of failure and making mistakes can leave people spending too much time considering options.
When starting your own dropshipping store, you have two options. You can start with either a one-product store or a general store with many products. Each of these options have their own pros and cons, and require different resources and skills.
Are you having trouble deciding what business model to follow when building your business? Read on to find out which option is the right one for you.
One Product Store
Just as it sounds a one-product dropshipping store does just that – it sells only one product. This means that the brand, structure and design of the webstore, and all marketing efforts are solely focused on just the one product.
To help you decide if a one-product business model is right for you, here is a list of pros and cons of running a one-product dropshipping store:
- It is easier to target a specific group of consumers.
- It allows you to serve an underserved market in a particular niche.
- One-product online stores have a higher conversion rate compared to general stores.
- A high conversion rate typically means one-product dropshipping stores are easier and more likely to scale.
- It is easier to convert one single product into an established brand.
- It allows you to focus better on finding one profitable product.
- It is easier to analyze data and feedback from customers on just one product.
- All the consumer attention will be directed to just one single product.
- You can sell your dropshipping store for someone else to manage without any hassle and at a fair price.
- It is easier to collaborate with influencers when promoting just one product.
- It allows you to maintain quality customer service more easily.
- You will have to do more detailed research to ensure that you are able to find the right product and offer it at the right price for your customers.
- There is a higher chance of failure with just a single product.
- There is a potentially high risk of losing the market if there is no demand for the product after some time.
- There is limited flexibility in testing for different products when only selling one product.
- One single product might not generate enough money to sustain and support the expenses of your business in the long run.
- You cannot cross-sell anything to increase your revenue when you only have one product.
- The likelihood of returning customers is low. Some customers may consider your product to be a one-time purchase.
Best suited for…
- Anyone who can dedicate their time to this e-commerce store.
- Anyone who owns excellent skills in product research and can spot potentially winning products
- Individuals who like taking risks.
- Individuals who are willing to give their all to one product.
- Anyone who possesses skills in dropshipping, ad creation, market research, and e-commerce.
- Individuals with intermediate skills in web development or those who have the budget to spend money on hiring an expert in web development.
- Entrepreneurs who are starting a business with a budget over $1000 for marketing and advertising expenses.
Like traditional brick-and-mortar general stores, a dropshipping general store sells a variety of products. In a dropshipping general store, you can sell products from various niches like clothing, toys, computers, and electronics.
Here are the pros and cons of starting and running a general store:
- Selling a wider variety of products means that you are more likely to have something that fits your consumers’ varying wants and needs.
- It is possible to engage in cross-selling of products in a general store.
- You can reach a significantly larger number of potential customers when selling multiple products.
- You can test several different niches in a general store simultaneously and adjust your product selection and marketing efforts accordingly.
- Running a general store offers more stability compared to a one-product store.
- It has long-term potential because it enables you to easily switch to different products as consumer trends, needs, and tastes change.
- Usually able to reach more customers on a lower budget than one-product stores.
- It is more flexible and convenient to start a general store as there isn’t a need to focus solely on a specific niche.
- There is intense competition.
- Managing multiple products in the store can be overwhelming.
- It is hard to determine where or what to focus on.
- It is nearly impossible to obtain a high rank in search engines for the chosen keywords.
- Due to the wider and more general selection of products it may be more difficult to create a strong brand that speaks to niche audiences
- It can be quite challenging to build a proper marketing strategy for a general store as it does not cater to one specific niche.
- It can be more challenging to collaborate with influencers because there are multiple products to promote.
- A general store has a lower conversion rate. While you will get more visitors to your store than a one-product store, the chances of visitors making a purchase is lower.
Best suited for…
- People who have minimal experience in e-commerce or dropshipping.
- People who are total beginners with a low desire for risk.
- People who lack experience with web development.
- People who have a minimal marketing and advertising budget to begin with, i.e., below $1000.
Launch a Winning Dropshipping Store with Launchers Academy
The bottom line
There is no one right way to start a dropshipping store. Each of these business models have their pros and cons. Choosing whether to have multiple products (general store) or a single product (one-product store) primarily depends on your objectives, skills, and resources.
By working on a dropshipping store type that best meets your skills and financial status, you can significantly minimize the risks of failure and mistakes in running your dropshipping store. Still unsure about what business model to use? Or need help choosing products? Join the Launchers Academy today to learn how to create your own winning dropshipping store in just 90 days.
Launch a Winning Dropshipping Store with Launchers Academy
Our team of professionals will help you start your own business that best suits your skills and resources. Using our Product Matrix, we will teach you how to choose winning products and strategies on how to sell them.