Low ticket and high ticket dropshipping

September 23, 2020

Before understanding the exact meaning of High-Ticket Dropshipping Business let us once again refresh ourselves with the knowledge of Dropshipping Business!

These are the basic steps in dropshipping business model

On your online store – you will list your suppliers’ products on your online store.

When any customer purchases the product from your online store, you have to place the order with your supplier/distributor and request him to deliver the product to your customer on your behalf.

Your customer gets the delivery from your supplier/distributor wherein, practically you do not even see the product physically!

This is the current market trend of online business where your product investment is zero (in the initial stage), which is called Dropshipping Sale.

If you are interesting in making your first dropshipping business you can read our ultimate guide to dropshipping with Woocommerce

What Is The Exact Meaning Of High Ticket Dropshipping Business Model?

The above introduction will give you a total clarification of the dropshipping model. Furthermore, when you intend to sell the products through your online store costing more than $200 exclusively, then you are doing High Ticket Dropshipping Online Business!

The corollary is that all the dropshipping business models selling less than $200 products fall in the category of Low Ticket Dropshipping Business Model.

What Are The Pros Of High Ticket Dropshipping Business Model?

Lucrative Margins: When the cost of the product increases the margin also shoots up. In the case of High Ticket Dropshipping Business, by selling one product of $200, you earn $20 as your gross profit. Imagine, when your store picks-up the sales of around 5-6 items a day!

Fewer Orders Gives More Money!

Less Effort Per Product: When you sell 20 products in Low Ticket Dropshipping Business, you have to incur the expenses like – packaging, logistics, manpower, and other fixed and variable expenses – 20 times! And, in the case of High Ticket Dropshipping Business, you have to incur all these expenses only once!

The efforts involved in selling one product costing $3 are almost similar to one product costing $200.

Margins Are Proportional To The Cost Of The Products: Let other online stores sell 10,000 kitchen towels per day with the margin proportional to the cost. But your online store will sell 5-6 items per day and fetch you a phenomenal bottom-line equal to those 10,000 kitchen towels.

Efficient Customer Service: As the number of customers is less, the customer service is also limited! This increases the efficacy of after-sales customer service.

Efficient Marketing Strategy: Even though the number of customers is low, profits are high, customer service is low and you can concentrate on marketing your high ticket online store. Due to high margins, you can flash more store ads, or purchase ample paid traffic.

High Conversion Ratio: When there is high traffic into your online store, the conversion ratio is proportionally very high.

High Business Sustainability: When compared with other business formats, this model has a very high shelf-life because when you choose typical items, you will have less competition. The latest trends will not matter much as the high ticket products are always in demand.

What Are The Cons Of High Ticket Dropshipping Business Model?

High Start-Up Investment: One important fact of this business is – unless and until the customer does not purchase from your website – you need not invest in the product. When he finalizes the high-ticket product, then you have to invest in placing the order with your supplier. But, whenever any sale is finalized you should be capable enough to invest that amount in the product, else, your customer will get affected and your online store will lose the reputation.

Return Management: Whenever the product is rejected by your customer, it is your responsibility to incur all the expenses to take back the product as it is sold through your online store. The expenses involved in the High Ticket Dropshipping Business Model are high. You have to make arrangements for these kinds of incidental expenses.

In this case, your choice of supplier plays an important role. If he sells high-quality products the rejection ratio is less, thus enhancing your gross profits.

Experienced Drophippers: This business is much more advised to the dropshipping stalwarts rather than the newcomers. Because lots of concepts like digital marketing, sales funnel, online advertising, etc. are involved which a novice cannot handle efficiently.

What Is The Comparison Between High Ticket & Low Ticket Dropshipping Business Model Products?

Lucrative Margins: In a day, 10 customers purchase $20 products from a Low Ticket Dropship Business. It means that the daily turnover is $200 with 10% gross profit i.e. $20. In the case of High Ticket Dropshipping Business, by selling one product of $200, you earn $20 as your gross profit. Imagine, when your store picks- up the sales of around 5-6 items a day!

The efforts in selling one high ticket dropshipping business product are equal to the selling of almost 20 low ticket dropshipping products.

Now that you have understood the exact detailing of High and Low Dropshipping business, let us try to compare its pros and cons with live examples.

Products:

High Ticket – Watches & Jewellery 

Low Ticket – USB Cable

The advantages of selling USB Cable (low ticket products) are:

· Very easy to courier

· Very high demand

· Different brands and cable variations are available

The disadvantages of selling Watches and Jewellery (high ticket products) are:

· A limited number of customers

· Shipping requires very high-quality packaging to safeguard the product · Expensive

· Very limited market demand

The market size of high-quality watches and jewelry is very limited when compared with the market demand for USB Cables.

This compels the to-be-online-sellers to opt for low ticket products, especially in online or dropshipping business. The choice is always for low-cost products like memory cards, USB cables, earphones, or mobile phone cases. And this is not worth focusing on!

Why?

Because, when you compare low ticket products with high ticket products, the latter has many more advantages.

Profit per product: The profit margin on high ticket products is very high when compared with low ticket products. When you sell 100 units of USB cables with a gross profit of $0.50 per cable, your net profit is $50 on 100 cables! Whereas, when you sell only 2 items of watches and 1 jewelry item, each costing $200, you get $60 (considering the net profit of 10%)!

Efforts utilized in selling the 100 USB cables will be almost similar to selling 3 watches and jewelry combined.

Even the manpower required in working to run your high ticket dropshipping business is also limited.

Conclusion:

Before jumping into the high-ticket dropshipping business it is always advised to surf through the competition network. Get all the details about the high-end products, their cost, and in turn your net investment. Also, work on all the facts on how you will supersede your competition. Get all the sales data for the high-end products you wish to sell, beforehand!

Once you are fully prepared with your MIS then opt for this lucrative High Ticket Dropshipping Business!