Last Updated on April 16, 2021
High-Ticket Dropshipping vs Low-Ticket Dropshipping
Do you fail to turn a dropshipping website online into a successful venture? Have you been throwing cash into commercials that appear to do nothing for your conversion rate?
You could be shocked to find out that what products you are dropshipping might be what.
We’ll describe to you the distinctions between high-ticket and low-ticket goods in this guide, and what sort of shops we choose for our seven-figure stores.
What is a High-Ticket or Low-Ticket Item?
Okay, so you have no idea what a high-ticket or low-ticket item is if you’re new to the world of dropshipping. It’s a nice place to start, so that’s where we’ll start.
Anything pricier is a high-ticket piece. On average, we want to go for goods that are about $500, or even higher than that.
If you drop more expensive products, with fewer profits, you’re going to make a greater return. Perhaps, with only one or two transactions a month, you can also recoup your losses.
Essentially, for high-ticket goods, making a profit is far smoother.
Many individuals go online to look at listings of high-ticket niches for sale in their shops. We have our reasons for saying that though, big-ticket dropshipping niche lists are pointless.
Low-ticket products are the cheapest ones on the other end of the continuum. You pay the commodity amount, and you have to mark it up.
To make you think, let’s send you an example. Here we would be cautious and conclude that on the higher side, you are marking up a low-ticket piece, maybe about an 80 per cent markup.
E.g., claim that on your site, you are selling a $30 object. The incredibly generous 80 per cent markup results in a profit for you of $24.
Compare it to a worst-case situation on a $500 item with a 10 per cent markup. You would gain $50 on one deal, which is twice as much as the best-case scenario of an 80% margin on a $30 piece.
But we usually do not have to adhere to the low 10 per cent we listed for our high-ticket pieces. Currently, with a 50 per cent profit margin, we have some goods for $10,000.
So Why Do People Even Sell Low-Ticket Items?
Interestingly enough to get money out of them, corporations don’t market low-ticket products.
So again: why do people still market, if not to make money, low-ticket items?
The primary explanation is to get you into their backend, the client. If you shop from them once for something inexpensive, the expectation is that you can keep returning to them or adding more items to your order.
The analogy we want to use collars for dogs. In general, dog collars are pretty inexpensive, and you won’t make a profit selling them.
You can’t build the base of your dog collar company (or any other cheap item). Your dog collars are just the gateway thing you’re using to get a directory of dog owners who are clients.
You can start marketing them down the road until you know they’re dog owners, tempting them to shop other more pricey products on your web.
What Kind of Back-End Do you Need for a High-Ticket Business?
Another way to pose this question is what more do you need to do if a customer orders from you a high-ticket item? To avoid them coming back, do you need to have a complex backend system?
The response, in brief, is no.
Unlike low-ticket dropshipping, you don’t need to have a sophisticated scheme where you keep trying to bring clients out. That is because, hopefully, from their first order, you’ve made plenty that you don’t need to make them a repeat client.
Currently, we have several stores where, following an order, we have not emailed customers farther down the line at all. Honestly, we should potentially contact them more, but we didn’t even need to.
This does not mean that a well-designed backend for the high-ticket shops cannot be set up. You may not need to, however.
Each customer’s first sale is always what you need.
Entry Barriers: High-Ticket vs Low-Ticket
Let’s talk about the obstacles you might face with either high-ticket or low-ticket goods to get started.
When it comes to getting started, there are certainly discrepancies between the two. For you, we’ll dig into the details.
Entry barriers for High-Ticket Items
For high-ticket goods, getting a corporate legal company created first is the biggest hurdle you can run. That means that you need to build a company, such as an LLC.
With other high-cost goods, without a real company behind it, you can’t just start selling them. It’s not necessarily hard to form an LLC, though, and you can quickly study how to do it online.
It’s essential to have a clear view of the legal risks involved, too, because it’s a business.
All the stuff you will learn along the way are other skills that come with running a company, such as an advertisement, creating a successful website, and studying patterns. Because the great thing about high-ticket drop shipping merchandise is that you still have a significant profit margin for each sale, even though the marketing campaign only succeeds 20 per cent of the time.
In other words, even though you are fucking up most of the time, making a couple of sales means that when you are practicing, you will still make a profit. You’ll learn how to locate right vendors, build a website, and along the way, pick some high-ticket niche products.
It would help if you looked at our storey to show that this is valid.
We were utter newbies on our very first dropshipping platform. We didn’t even know at that time what the word “conversion rate” meant.
Yet we were also sales-making. Our first platform wasn’t great as you can call it and yet, people were already searching and buying from our site.
Entry barriers for low-ticket items
For low-ticket goods, on the other hand, the obstacles are much steeper.
Know, for these kinds of goods; you need to produce a lot more revenue to get a decent profit, which suggests that you can require years of experience to learn how to transform one-time consumers into return buyers.
And investing thousands of dollars is the only way to get those years of experience. You start right from the get-go, here in the pit.
You’ll have to have a firm grasp of e-commerce to climb out of it.
For low-ticket Aliexpress agencies, another thing to take into account is that you’re also making the consumer service worse. To have anything they ordered, any customer will have to wait several weeks, which does not make a fantastic first impression.
When you equate an Aliexpress vendor with an Amazon one, this is strongly obvious. An order will appear on Amazon within a matter of days, as opposed to weeks.
What do you think makes things happier for clients?
What Happens if You Fail with a High-Ticket Site or a Low-Ticket Site?
Now, when either a high-ticket venture or a low-ticket experience fails, we can switch subjects and discuss what happens. You can be surprised at the distinctions in this aspect.
Results of a High-Ticket Failure
You stand to risk incredibly nothing when your high-ticket scheme stalls, as ridiculous as it sounds.
Yeah, even though you’re getting just a tiny fraction of it right, you should break even at least. That’s because your prices are more costly, your profit margin is higher, and for low-ticket goods, you don’t need to sell about as much as you might need.
Make a couple of sales a month, and you’ll get your losses back. The advantages here are clear.
Then you can make changes to your plan because you’re at least not in the negative. You could make tweaks such as providing coupon codes to your clients or changing your platform to recover a little more.
It is even easier to determine what went wrong. You understand the price of the commodity because you know what the lowest advertised price is to sell it.
That means that you can automatically say whether you are selling it at a fair price.
And you’ll be able to see just what users are looking for if you’re running Google advertising. You should change your promotional approach accordingly to make sure that you keep up with trends.
In our dropshipping course, we explore what we want to see in even more depth on our pages. If you want to know what has worked well for us, have a look at it.
Results of a Low-Ticket Failure
Imagine that the low-ticket items have gone all-in.
Your audience is selected, and you run Facebook ads, investing $5-10 regularly. Yet nothing is happening.
No one is buying.
You don’t know at that moment what’s gone wrong. Every day, you pour money into it, and what you do is drive yourself deeper into a hole.
Again, this is because of low-ticket goods, the volume of revenue you need to make is considerably higher than with high-ticket ones. So if your campaign isn’t right and you don’t earn that considerable amount of money, then you’re out of luck.
Maybe you’re doing a few tweaks to the website and your advertising, and you’re making a few profits, so you’re not going to make that much money back yet, only because your profit margin is a lot narrower.
Ultimately, you would give up.
Selling Your Business
But what happens to your low-ticket site or high-ticket site when you try to sell it? There’s a contrast here, as in other facets, too.
We’re going to take the time to emphasize what those variations are.
It’s not necessarily hard to sell a high-ticket shop that is operated by Google advertising and maybe some SEO awareness. All is now practically developed into it.
You don’t have to make corrections on ad campaigns always. In comparison to Facebook advertisements that have a propensity to fade away, the traffic is probably steady.
For a customer, it makes better sense to buy anything like that. There is less worry and more flexibility, as they won’t need to be as worried about having significant amounts of revenue as they will each have an enormous benefit for them, like for you.
You don’t want it to sell for cheap because you’ve invested a lot of time and effort into building your web.
The thing is that’s what you get with Aliexpress pages that are low-ticket. Yeah, you might market them, but it’s not as lucrative.
You might find yourself selling one at best, for a few thousand dollars. Perhaps also at the low end, a few hundred.
The explanation for that is because, with a fantastic ad strategy and design, you may have a brilliant website, but you can’t carry that over to your customer. You need to be continually checking and restarting, so you can not only hand over the keys to your ads and web.
There you have it a comparison of dropshipping for high and low tickets as well as an in-depth description of why we choose high tickets.
You can take a look at our Building Assets Online course if you’re looking for any more details. We layout the very same techniques that we have been consistently using in it for years, and we are sure that you will also make them work for you.