High Ticket Dropshipping: Make Money With Larger Margins? (2021)
Find out everything about High Ticket Dropshipping Below!
Table Of Contents
High ticket dropshipping means to sell expensive items instead of cheap ones that make up traditional dropshipping. Therefore, it’s easy to set the two apart by the prices and commissions.
A couch is more expensive than a phone case. As such, the money you make from selling a couch will be much more than selling a phone case, even several phone cases.
What’s important to note here is that selling a high ticket item isn’t as easy as low ticket. You need to convince people that your product is better than the rest, and doing that with a couch or a Jacuzzi is a lot more difficult than doing it with a phone case.
In other words, high ticket requires lots of trust, and that’s often handled by retargeting campaigns and sales funnels; email marketing is crucial here as well, especially to convince them to come back and earn loyalty.
What I’m trying to say is, basically, that people don’t buy high ticket products by impulse, so selling them takes more effort.
How is it different from low cost items?
Let’s stick to the phone case as our example for low ticket items. Selling one doesn’t take a lot of work as long as it looks attractive; your customers are more prone to think “why not?” and move it to their cart or buy it alone.
That’s because low ticket items fulfill 2 easy needs: being cheap and catching people’s interest.
When you work on an ad, you want people to feel curious about the image so that they click and go to your store for a better look. There, you show them that your item is cool, and the final blow is the price. Therefore, they buy on impulse.
We’ve all made impulse buys just because it was less than $10. I can even bet most of us have bought something utterly useless just because it was cheap and looked cool at the moment. Now, imagine when the item is still cheap but it’s actually useful.
Therefore, if you see a sturdy phone case with your favorite character (and you’re someone who drops your phone often), you’ll feel it’s something you need. You can apply the same concept to bike lights, leggings, knife sets, etc.
These types of sales are so cheap that you don’t really think “that’s cool, but let me see if I can find it for less.”
It sounds good in numbers
Still, there’s a reason why people go for high ticket, and it has more to do with numbers and math than psychology.
Let’s go for an average profit margin for high ticket products: 20%.
Now, imagine you sell a couch for $1,000. You get to pocket $200 for a single sale, which is quite good. You can even sell it for more; let’s say $1,500 for a $300 profit.
It’s even better. So, let’s go to our phone cage.
You’ll find most phone cases on AliExpress for as low as $1 or $2. I know, you can find cheaper ones, but let’s go for $2. Let’s say you sell it for $8; that’s a $6 profit from a single sale.
You need between 33 and 50 sales just to reach the same profit from your high ticket item.
But, is it easier to sell 1 expensive item?
Not really, you need to invest a lot more advertising an expensive item than a cheap one. Remember, people don’t spend hundreds or thousands on impulse.
Well, some do, but they’re a rare species.
Most people plan when buying expensive stuff. If they see what they want on your site, chances are they’ll go somewhere to see if they can find it for less. They may even visit their local stores for alternatives.
The end is either no sales or massively sacrificing your profit margins.
That’s why impulse buys make for most dropshipping sales. People don’t really think about what they’re buying: it’s cheap, it interesting, and it often solves an issue, as small as it may be. Therefore, we go back to the “why not” rule.
Phone cases have a massive audience, and when you go for themes and characters, you niche down and increase your chances to get sales. The same goes with bike lights, chains, cheap jewelry, or even toys.
When you have to target people who analyze their purchases, you’ll have to invest a lot more on advertising. That’s without mentioning you’re competing against businesses with more money and even larger retailers that will simply outshine your brand.
Initial investment for high and low ticket
Sure, you don’t have to keep inventory, but think about getting sales and having to pay for the item before the money enters your account. If you’re using PayPal, then this is probably familiar for you.
Paying in advance for an item priced at $2 or something like that is easy. You probably won’t even feel it, but that’s not the case with products costing over $1,000 or even a few hundreds.
Now, think about the ads that took you to that sale and you’re seeing even more spending. If you want to deliver a killing blow to the idea, just imagine your customer cancels the order or returns the item and your supplier doesn’t cover that.
Look, I know that making hundreds in profits for each sale is enticing. I’ve pondered the idea myself, but the risks and necessary investment are just too great for me to recommend this approach.
I know some people make a lot of money, but even if you can do it too, why not start with low ticket?
Both models apply virtually the same concepts all the way to marketing. High ticket just requires more money and effort, but it’s the same knowledge you’ll get from selling low ticket products.
You can get eCom Elites and eCom Turbo for less than $300 if you go for the standard versions, and you’ll receive all the knowledge necessary to sell all products. From there, you just need to find cheap items that are useful and interesting.
You might find that you like low ticket more, and even if you don’t, you can use it to raise the money you need to scale to higher prices.
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