If you think dropshipping is just playing around with various products in a store, then you might need to reconsider. Why? Because there can be many approaches to building a dropshipping store and this blog post covers the various types of dropshipping stores you must know before starting out.
1. Print on Demand (POD) aka Print on Request
Print on demand is a business model where you can create your own designs, embed them on product images digitally to get the final product & start selling. POD products are not physically printed until you get an order, which means your supplier will print the final product only when the demand arrives.
Print on Demand is one of the most popular types of dropshipping & here’s how it goes:
- You create a design
- You embed this design on various product images to see how the final product will look like
- You finalize some products & list them on your store or other marketplaces
- You start selling & supplier will print the products on-demand basis
All you need at first is a design – which you can embed on multiple product images (you can use the same design on T-shirts & Mugs) very easily & quickly. If you feel like you can sell any of the final products, just export the final images & you’re good to go.
The designs that you create for POD products could be anything you could think of: a quote or saying, phrase, artwork, patterns, etc.
Below are some popular print on demand products that you can sell:
- Clothing & Accessories
- Face Masks
- Fanny Packs
- Phone Cases
- Other Custom Gifts
Some popular print on demand suppliers you should check out:
- Lulu Xpress
Print on Demand Pros: Why Print on Demand Might be good for you?
- You own your artwork/designs & can build a brand around it
- Quick products creation if you have the designs ready
- Hassle-Free Inventory: Since the actual products in POD are printed/created once you get an order, you don’t need to worry about the inventory numbers
- Easy return or refund policies by POD suppliers
- Offer good support to your consumers
- Design anything you could imagine
- Branding options available: you can add branded tags to your products. viz brand tags in Tshirts
Print on Demand Cons: Things to consider before starting out
- Require designing skills
- Lower or limited profit margins, however, if your design type is exclusive & unique, you can charge more
- Higher competition
Keys to a building a profitable POD dropshipping store:
- It’s important to have your own store so you do not rely only on third party portals like TeeSpring, Amazon, eBay, etc
- Having your own store helps you build authority & if your design types have a theme, you can start with a niche store. viz a store selling clothes with quotes targeted at engineers
- Having your own store also gives you much more learnings throughout the journey
- Refrain yourself from using trademarks, logos, or any other design type that resembles an existing brands’ identity or property. viz a checkmark that resembles Nike Logo, Pokemon, or other cartoon avatars
- Create designs for which an audience type can be easily targeted. viz. a Yoga Tshirt for people with Yoga interests, Dog Tshirt for people who love dogs
- While the inventory with POD can be unlimited, don’t forget to limit the number of stocks on your website frontend to deliver a message that generates scarcity amongst potential visitors
- Before choosing your POD supplier, make sure that you check a few important things like:
- How long it takes to ship a product once an order is placed?
- What are the shipping methods available?
- How is shipping cost calculated?
- What are the merchandise options available (product catalog)?
- How easy are the returns/refunds policy?
- What are the branding options available?
2. One Product Store Dropshipping
As the name suggests, one product store dropshipping is creating a dropshipping business around one (or two similar) products only.
Unlike other stores, creating a one-product store allows you to channel all your efforts & resources in selling one product & excelling on everything beyond the journey.
You don’t need to create multiple descrptions for multiple products or worry about what all products should I feature on homepage.
It’s simply one product, one store, & everything around it.
One Product Store Dropshipping Pros:
- You only need to come up with one product idea
- Since your whole store will be around one product, you get an authority over other stores if you do it right
- Easy to manage operations & processes: hassle-free customer service since you need to deal with only one product query. Over time, you will excel at offering good customer services
- You can invest more time in crafting an efficient dropshipping plan
- Advertisement strategy would be easy: effective audience targeting, higher conversion rates,
One Product Store Dropshipping Cons:
- You cannot diversify the product catalog
- For this to work, you need to come up with a thoroughly researched product
- If the product fails, you need to build another campaign from scratch
- Fewer repetitive orders
- You need to stand out by designing & building a product-centered store
- Risky for long term if the product demand decreases
Keys to a building a profitable one product dropshipping store:
- Invest good amount of time in researching & shortlisting your product
- Ensure that the product is of high quality, I recommend ordering a sample first & see if it qualifies
- Make sure you create high-quality content that sells
- Instead of selling product features or specifications on the homepage, sell benefits
- It’s important to shortlist at least three suppliers for your product, if something goes wrong with one, switch to other
- Since you have only one product, you must encourage consumer feedback & analyze what could be improved.
3. Niche Store Dropshipping
As the name suggests, niche store dropshipping is selling products around a few specific categories & sub-categories. These types of stores cater to a narrowed audience. A most common example is a pet store, catering the need of only those who are interested in pets.
A niche is a niche, you can narrow down deeper or keep it broad. A pet store caters to a broad audience who is interested in pets, however, a dog products’ store would attract only those who have dogs as pets.
Also keep in mind that niche is not limited to product categories like health, pets, fashion etc. Most of the beginners gets confused here.
As per the definition, a niche is
A niche market is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that it is intended to target. It is also a small market segment.Wikipedia
What does it mean?
Well, a niche store can also be of the following type:
- Store selling products below $50 only is a niche store focused on attracting visitors who wish to purchase things below $50
- Store selling products only for women
- A store that sells only trending products
Almost every market can be segmented by the specific needs and preferences of its buyers.
Below are some common aspects based on which you can choose a niche:
- Demographics (Age, Gender, Income)
- Profession, Interests, Hobbies
- Pricing & Products Quality (viz a premium pricing store selling quality products)
Niche Store Dropshipping Pros:
- Good conversion rates
- Niche stores wins authority & have the potential to become a brand (if done correctly)
- More store revisits & hence recurring sales
- Lower competition (not always)
- Better visibility on search engines as compared to general store dropshipping
- Easy to build connections with visitors or buyers: since you already know the niche they’re interested in, many marketing efforts like email marketing become easy
Niche Store Dropshipping Cons:
- Less flexibility as compared to general stores: you cannot sell every other trending product
- You need content & marketing tone to address your targeted audience to convince them to buy
- A niche that seems profitable might not be actually profitable, so you need a lot of testing
4. General Store Dropshipping
A general store or flex e-commerce store dropshipping is selling products on your store around various categories. These stores can have multiple categories – completely unrelated to each other – products ranging from Bluetooth speakers, daily kitchen essentials to anything you could think of.
General Store Dropshipping Pros
- Flexible: You can sell any product you could think of to see if it works
- Easier to get started
- Higher chances of the long term sustainability
- More reach since you are selling to a wider audience
- Good opportunities for cross-selling, upselling & promoting sales via Email marketing
- Data analysis can open many doors: the best about general store dropshipping is that the data itself tells you what products to sell & what to eliminate
General Store Dropshipping Cons
- Low conversion rates
- Higher chances of getting cheap quality, irrelevant traffic, or sometimes spammy visits
- Hard to scale
- You can lose money & time on testing & selling low-potential products
- Require high-budget for targeting & AB Testing
- Customer services can go worse since you will have a lot of different products & type of consumers to cater
5. High Ticket Dropshipping
High ticket dropshipping is selling expensive items to get highly profitable margins. Since it’s all about catering to rich segment of audience, you would need to be very serious about every single operations – from website store design to offering quality consumer support.
Not to mention, product quality must not be ignored at any cost. Ordering sample & going through product is a must: to assure quality & make promotional materials (images, video)
What’s luring about high ticket dropshipping is that you could literally cover your marketing expenses whilst becoming highly profitable with only a few sales. However, marketing budgets is on a higher side as well.
Such stores have products ranging from $200 to $2000 or even $5000 sometimes. It’s all about being profitable with the margins.
A store selling e-bikes worth $2000 would make $600 from a single sale (keeping profit margins to 30%). On the other hand, a store selling products ranging from $20 – $70 would make way less.
High Ticket Dropshipping Pros:
- Solid profit margins
- A lower number of customer queries & concerns (if product & operations are done well)
- Sustainable business model: Less but tough competition
High Ticket Dropshipping Cons:
- Not recommended for beginners
- Require high-budget to work it out: high advertisement budget, expensive operations
- Require a solid marketing strategy
6. Branded Dropshipping
This is an approach to sell dropshipping products under your brand name without actually manufacturing them. The profit margins are pretty higher with branded dropshipping as compared to traditional/typical dropshipping store.
Also there’s not any maximum selling price limit by suppliers.
A popular case study in branded dropshipping is of BlendJet.
Now look at some portable blenders available on AliExpress for dropshipping. Aren’t these similar to BlendJet? Yes, they are. But why BlendJet became a brand?
Simply because they have a reliable supplier who private label or white label high-quality blenders for them. Now that they’ve been in the market for a long time, they have everything streamlined – from consumer support to reliable suppliers with local warehouses in some countries.
Basically, branded dropshipping can be done in two or more ways:
- White Label Dropshipping: It’s when you collaborate with suppliers/manufacturers who can ship products with your brand name on them, by paying some extra fees.
- Private Labeling Dropshipping: It’s when you find a supplier/manufacturer who can manufacture products for you as per your requirements & customization. It’s about pre-ordering & paying for the number of products you want.
The big difference between these two is that white labeling attracts many businesses/entrepreneurs since there are fewer fees & fewer risks involved as compared to private labeling.
It’s because anyone can white label products by paying extra fees, but in private labeling, the manufacturer would ship an exclusive product for you. The risk is that it’s about pre-ordering.
However, private labeling is more sustainable since there won’t be competitors if you do some customizations on the product.
This dropshipping business model is recommended for entrepreneurs who want to build a sustainable brand your for sure you would need experience with eCommerce in the past to make it work.