Changing from a niche store to a general store, or vice versa, is a nightmare.
Before you build your e-commerce store, you have to decide between niche and general. This decision is going to guide your actions as you move forward in building the store, marketing your brand, and scaling up your business.
I will show you how to choose between a niche store and a general store. The things you will learn here today apply whether you are manufacturing your own goods or if you are dropshipping.
These are the topics:
- What is a niche store?
- What is a general store?
- What are the advantages of a niche store?
- What are the disadvantages of a niche store?
- What are the advantages of a general store?
- What are the disadvantages of a general store?
- Niche or general store for beginners?
- Comparison Chart of niche and general store
Let’s get started!
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Why is Niche Store vs General Store even a problem?
Too many times, e-commerce entrepreneurs, including dropshippers, do not think this through. As a result, they realize halfway through their e-commerce journey that they made the wrong choice.
If this happens, they either have to create a new store or spend a ton of money, time, and effort, to convert their existing one.
Now, conversion from a niche to a general store, or vice-versa, is just the beginning of your nightmare. Once that is done, you now have to go back to the drawing board and figure out how to market your revamped website.
Your sales would ramp down, your costs would climb, and before you know it, you are back to ground zero. Experts would know what to do, and they have the budget to turn things around, but it is the beginners who suffer the most.
What is a niche store?
First of all, what is a niche?
A niche is an area, like a domain. Fashion is a niche. Electronics is a niche. A toy is a niche.
The thing is, a niche can still be broken down into further niches. For example, niche toys can have several sub-niches, as shown below:
- Baby toys
- Remote-controlled toys
- Outdoor toys
- Musical toys
There are so much more. And then, a sub-niche can still be broken down into deeper levels. For example, we can break down RC toys into helicopters, drones, cars, etc.
In the online community, a niche store refers to a store that sells drones. RC toys are also a niche. However, the toy store category still pretty much qualifies as a general store.
You can also break down a niche based on purpose. A good example is a store that sells anti-stress gadgets. Another is a store that sells nothing but bonsai materials such as cutters and wires.
What is a general store?
A general store, on the other hand, covers something that is really broad. For example, you may choose to sell toys—any kind of toys.
I am not saying that a general store is a trap. It is just a lot more difficult to manage it than a niche store. If you think of a physical department store, a general e-commerce store looks the same.
What does this mean? Let us say you chose to sell in the fashion niche, and you opted to open a general store. In this case, you would be selling the following items:
Whether your fashion inventory is only for men, for women, kids, or all, it is still a general store.
Most entrepreneurs who open a store like this are dropshippers.
Because they do not have to buy inventory. In dropshipping, you only have to select products that you want to sell, and then in a few clicks, all these products will be loaded to your website.
The premise of those who operate general stores is that if a site visitor sees more products, then he surely is going to be interested in one of them, right?
Well, we shall see if this is true.
What are the advantages of a niche store?
Let us take a look at the benefits and advantages of running a niche store. As we discuss this, we will focus our attention on a niche store for cameras.
1. Easier inventory management
In a niche store, you would typically not have more than 50 products. While it is true that there are several types of cameras, you can easily break it down into categories. You can create categories by brand, type, or properties.
As such, you are uploading new products to a niche store is not a gruesome ordeal. As a dropshipper, you know that you are selling cameras and peripherals and that’s it.
While you can add lenses and other stuff, the amount of work required to get this done pales in comparison to a general store.
2. Enlightened customers
As a niche store, a site visitor can easily identify what you are selling. If your e-commerce website sells cookies, then you are a cookie specialist.
Just imagine if you are selling:
- Remote controls for TV
- Cable boxes
- All other electronic stuff
A customer may get inundated with all these options, and will not know what to buy.
For a toy store that has no niche, a customer will also not have a clue what you specialize in. Do you sell toys for adults? Babies? Teenagers?
A confused customer is a customer who cannot decide. And if this happens, you lose a sale.
3. Well-defined customers
With a niche store, you know who your customers are. It is easier to paint a picture of your target market if you focus on a niche.
Going back to the camera example, you know that your target market is comprised of people in the photography business or hobby.
But if you have a fashion store, which exactly is your target? Women? If they are your target, what age, and what are their interests?
With a niche store, your customers are well-defined. And if you can define who your target market is, it’d be easier to create a marketing plan. You will also know where these people hang out.
4. Easier SEO strategy
One great thing about a niche store is that you only have to target a few keywords for your SEO strategy. In a camera business, you will only work on the keyword digital cameras—that is your main keyword. While it is a competitive keyword, your SEO action plans are focused.
As such, all your blog posts, videos, and ads concentrate on the same target. You can break that down further, but all of your LSI keywords and main keywords roll up to one thing: digital cameras.
5. Improved conversion rate
How does this happen to a niche store?
Well, a customer looking for a camera is likely going to land on your store, not someone who is looking for a toy.
As this customer browses your product pages, he would begin to realize that this is your niche—your specialization. He would feel that he has come to the right place.
A niche store does not confuse a customer, and it makes your store look a lot more credible. If your product pages are optimized, if your sand refund policies are transparent, there is a bigger likelihood that this customer is going to complete a purchase.
What are the disadvantages of a niche store?
Although a niche store sounds promising, it is not a walk in the park. Let us take a look at the disadvantages.
1. Expertise is required
In a niche store, your customers would expect you to know your product like the back of your hand. If you are selling cameras, they would ask you if a certain lens is compatible with it. If you do not know the answer, you are doomed.
If you are selling drones, your customers would want to find out if your product can deliver the promised flight time, or what materials they are made of. How far can they fly from the person controlling them?
You see, a niche store requires expertise. If you are merely dropshipping products that you do not understand, you are not likely to succeed.
2. Overdependence on a few products
Since you are not selling a lot of products, some of them may be hot right now, but interest may fade over time.
If you remember, there was a craze about fidget spinners sometime in 2017. Everyone had one. If you had a niche store like that, chances are you would have shut that down already.
You will also realize that in a niche store, a huge chunk of your sales come from only a few of your inventory. If you are manufacturing your own goods, this can be a problem. But if you are dropshipping, this is not an issue.
3. Difficult to scale up
A niche store gets a customer base because it is a specialized sore. Once you begin to scale up or add more products, customers begin to get confused.
Remember, the people who go to your niche website are people who have a particular interest.
Camera enthusiasts are not interested in seeing computers or smartphones. If you start adding more electronic gadgets to your store, you will alienate your customer base.
So, what happens is you can add camera-related gadgets like tripods and lenses, but never other electronic products that have nothing to do with cameras.
What are the advantages of a general store?
Niche stores are great, but general stores also have their own merit. Read on to find out what makes a general store an attractive option.
1. Wider market
A general store has coverage of a much wider array of people. From men to women to children, your store has a lot to offer.
Because of your product variety, you can reach out to millions of people. It is much easier to get clicks on your advertisements for a general store than on a niche one.
With a general store, you do not have to work on a particular group of people who are interested in what you have to sell. Instead, people will come for as long as your main area of coverage is within their interest.
2. Less expertise required
In a general store, you pretty much sell everything that is in that niche. And most of the time, general stores are leaning towards items where expertise is not required.
For example, you may operate a general fashion store for women.
In this case, your products are likely going to be:
In a store like this, the only things you need to know are:
- Materials (cotton, wool, polyester, etc.)
Dealing with customers is easy because they do not have technical questions. Most of the inquiries you would receive are about shipping, delays, product quality, and refunds.
What this means is your skills must lean towards customer service, not technical expertise.
3. Earn bigger profits
Because of economies of scale, you are likely to have a higher conversion rate than a niche store. Products in general stores are usually novelty items and commodities that people buy all the time.
While there is a lot of competition, the whole world is your marketplace. Despite the low-profit margin per product due to competition, you are going to make huge profits because of volume.
4. Easier to upsell
In a general store, you typically sell items that are priced lower than $30. This is a price that a lot of people can easily reach. And because of this cost, your customer has more disposable income left.
General stores are the best places where you can trigger upsell marketing. You can add apps that would automatically show suggested products. You can also create discounts and promotions as often as you want, or create bundled products that you can sell at a lesser cost.
In a general store, there are so many ways you can mix and match the items you sell. You can barely do this in a niche store.
In a niche store, you can perhaps bundle a camera and a lens, but that is about it. Not all lenses are compatible with other camera brands, so your options are limited.
What are the disadvantages of a general store?
While general stores serve as a safe business, it does not come without difficulties. Take a look at some of the disadvantages of general stores below.
1. Expensive marketing
General stores make it to a customer’s eyeballs because of paid advertising. If you have seen what Amazon has done over the years, it has spent more than $7.2 billion annually in marketing.
Yes, with a letter “b”.
About 38% of Amazon’s income goes to marketing.
You may need to do the same.
A general store does not attract a specific kind of consumer. What this means is that you cannot rank for keywords. Besides, you are competing against a lot of general stores, so your website can get buried in searches.
The only way to get some serious traffic is through targeted advertising on different platforms, and this can prove to be really expensive later on.
2. Difficult to rank on SERPs
Unlike a niche store, what keyword will you aim to rank for? In our example earlier, the keyword we wanted to rank for was “digital camera”.
With a clear keyword, you can create ads geared to that. Anyone who is interested in a digital camera may see that ad.
The same principles apply in any ad network or platforms like Google or Facebook.
You can also blog about digital cameras, and soon Google will index your website as an authority about that niche.
But with a general store, Google does not know how to categorize your website.
What will you even blog about? Because your store does not belong to any specific industry, your blog posts and videos would try to outrank each other.
3. Too much work required
Let us go back to our example general store earlier. In this general fashion store for women, prepared at least seven categories.
Now, then, the question is, how many products will you sell for each category?
Do you think ten is enough?
I don’t think so. You should have at least 50 each. With seven categories, that translates to 350 items that you need to upload. You also need to create a product description for each.
If you spend 30 minutes for each product, which includes photo editing and writing a product description, 350 items will take you 175 hours to complete!
If you hire someone who would do it for $5 per hour, that’s $875 gone from your pocket!
Niche or general store for beginners?
So, how should you decide?
A general store is inviting, but a niche store is much easier to manage. A niche sore needs expertise, but a general store requires more customer service skills.
A dilemma, isn’t it?
I think you need to decide based on your goals, aspirations work, capacity, budget, and passion.
Choose a niche store if you:
- Are an expert about a certain product
- Are passionate about a specific hobby or product
- Prefer targeted marketing and organic traffic
- Want easy work on inventory management
Choose a general store if you:
- Are not an expert on a specific area
- Are great at customer service skills but not technical skills
- Have a high budget to burn on ads
- Want low profit but high volume of sales
- Do not mind hard work in inventory management
Comparison Chart of niche and general store
To help you decide better, take a look at our comparison table below.
|SEO||Easy to Medium||High|
|Sales||Low to Medium||High|
|Customer interest||High||Low to Medium|
Choose carefully, as this decision is going to make or break your store.
If I may suggest, start with a niche store if you are a beginner.
Master the tricks of the trade before you venture into something bigger. Once you have learned from your experiences, opening a general store is going to be easy.
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