High-ticket dropshipping and low-ticket dropshipping is something you might have never heard of. Though these strategies are quite simple to understand. Before you jumpstart your retail dropship business, it is key to determine what value of products you will work with.
If I wanted to tell the difference between the two strategies in a nutshell, I would say:
- Low-ticket dropshipping is selling cheap products using high price margin
- High-ticket dropshipping is selling expensive products using low price margin
The income can be the same, or at the high-ticket dropshipping strategy, it can be more even if you sold fewer products. However, the recipe has more ingredients, and to have a great and lucrative result you need to think over more details.
Comparison of High-ticket Dropshipping and Low-ticket
Here below I provide you an easy way to get a clear view of the differences between the two business models. I and many say that high-ticket dropshipping is more profitable, but of course, it not necessarily the case every time. You need to be experienced and have to manage business confidently in the online market.
Moreover, as we are talking about dropshipping: please note that without investing any amount of money in your dropship business you can’t be a millionaire. You definitely need to have some capital investment, but of course, running a dropshipping business is a lot cheaper than stocking products in your warehouse before you would make any sales.
Furthermore, about what to sell? It depends on your own unique ideas, your local market, and on your target audience’s needs.
|LOW-TICKET DROPSHIPPING||HIGH-TICKET DROPSHIPPING|
|Impulse buyers. They don’t check the product elsewhere.||Buyers check the product in more stores and spend a longer time considering whether to purchase|
|Selling cheap products||Selling high-quality, high-end, more expensive products|
|A product costs a few dollars||A product costs more than $200|
|High price margin (even 80-150%)||Low price margin (20-40%)|
|Lower risk, lower result||Higher risk, higher result|
|More orders, less money||Fewer orders, more money|
|Selling lot of cheap items||Selling a few expensive items|
|Easy and cheaper to ship||Heavy to ship and delivery costs more|
|Lower expectations||High expectations|
|Bigger market||Smaller market|
|Full team of support needed because of more customers||1-2 people needed for support|
|Loads of smaller & bigger competitors||Bigger competitors who are on the market for long years|
|More difficult to buy paid traffic||Easier to buy paid traffic|
More About: High-ticket Dropshipping
Selling products with higher price tags had to be equal to providing premium, high-end items. However, even though you are adding high markup on your products, be careful to not overprice them greatly.
This business model has the potential to be remarkably profitable. Although be noted that high-value items are more difficult to sell.
At high-ticket dropshipping you need to reach fewer people with marketing, you just have to target them well. Also, you need to turn fewer people to become real buyers at this model as with one buyer you can get a higher income than from 30 buyers at the low-ticket model.
You don’t necessarily have to persuade people to buy from you frequently, as at high-ticket dropshipping you receive a significant income after only one order. Moreover, you sell products that are expensive and can be used for years. It satisfies people’s needs for a long time.
If people buy expensive items they spend days and weeks considering whether to make the purchase. To make sure your visitors will not float away, you need to provide them as much useful information as possible about the products to make them buy from you. Answer all of their questions before it would even pop up in their minds.
Furthermore, provide the highest level of customer service with the shortest possible feedback time. As it is high-ticket dropshipping you will probably have fewer customers, so it will not take a long time to deal with support activities.
What Are Some Further Advantages of The High-ticket Model?
- The advantage of dropshipping, in general, is that you do not have to invest money in physical inventory. This factor at high-value products is more substantial.
- You will not have countless competitors thus you will not be just one in a billion.
- You do not have to sell hundreds of products every day. You can sell less and earn more.
- As your profit is usually higher at the high-ticket dropshipping you will have a bigger budget for marketing.
Even if most people say high-ticket dropshipping products cost more than $200 it is not necessarily the case. Some say the limit is $500, $1000, or $2000. It is high-ticket dropshipping if your strategy is to focus on selling expensive, high-quality products.
A few examples of high-ticket dropshipping products: bicycles, furniture, big size of home decoration, cameras, watches, automotive equipment, home electronics, high-ticket hobby items. art pieces.
This list is only to give you inspiration. The market is saturated. Find something unique, find your own niche. Sell products that your target audience is in need of. Furthermore, if your main focus is not on what is trending now, you have a bigger chance of staying on the market in the long-term.
What Else Do You Have to Focus On Here?
- High-quality, unique product photography
- Premium-looking, user-friendly online store
- Premium shipping
- Run an excellent marketing strategy
- Reliable suppliers
As for suppliers, you have to find the best partner to make sure your expensive products won’t get lost while shipping. It is not the best for your company’s wallet to give a refund of that big amount of money. Find a partner who you can trust, who won’t disappear without a trace, who has a great refund policy and nice customer service.
It is best to have a US, EU, or AU partner to make sure it will be of a quality, unique product that cannot be found in every second store, and the delivery will take only a few days.
More About: Low-ticket Dropshipping
We can say, low-ticket dropshipping is what traditional dropshipping means. It is what in most people’s minds when they think of this business model in general: getting low-cost products from for example AliExpress. These businesses sell a bunch of cheap items every day.
At low-ticket dropshipping you need more buyers than at the high-ticket dropshipping. Here you have to focus on making your customers be your long-term fans—besides getting new buyers continuously. This is how low-ticket dropship businesses can be profitable and stay alive.
At this model as well, the market is oversaturated. How can you run a low-ticket business successfully?
- Find a great niche
- Run a well-targeted, outstanding marketing strategy
- Spend more money on paid traffic to reach thousands of visitors—as only a few of them will actually buy.
- Put much effort and time into your online business
- If you are planning to sell trending products you need to hop on the trend early as you will have many small and big competitors.
A few examples of low-ticket dropshipping products: phone cases, jewelry (bijou), trending products (remember the fidget-spinner?), underwear, stationery items, cheap clothing, candles, simple home decoration.
Retailers choose this model because more people visit a webstore that sells for example phone cases than one that sells high-end road bikes. They focus on getting more orders, but they need more purchases here than at high-ticket dropshipping. Also, with nearly the same amount of work, at the other model, they could get more money with fewer sales.
What is another huge drawback of this model? As items are coming from for example AliExpress, customers have to wait weeks to receive the items. It brings a bad customer experience.
So Which Business Model to Choose?
We can say that the potential for your business to be highly profitable is in using the high-ticket dropshipping model.
No matter what, you have to make sure you pick your niche very well. Sell unique, high-quality items with premium shipping. It is better to forget about getting products from AliExpress and other similar sites. You need to find a real, local supplier with short lead time so you can provide the best possible retail service for your customers.
As for low-ticket dropshipping, you can use this model’s products to get buyers for your high-ticket dropshipping items. It would be like a hybrid model. However, you can’t manage it with every kind of product. Not everything can have versions for high- and low-ticket items, or it just simply wouldn’t worth it. Do not try to mix the two models by selling both Dolce & Gabbana bags and fluffy AliExpress keychains in the same store.
By a well-built hybrid of a low- and high-ticket dropshipping, you can help smooth out the sales volumes and have a steady source of income where the sales don’t come too inconsistently. Cheaper products can be used as gateway items.
However, there is no good recipe. No one can say which model is the one and only best for everyone.
You just have to position yourself on the market as a unique store with unique offers. Find your own style, and to not forget about professional branding. A strong brand identity is a key to have. Check your competitors to see how you can beat them, in what way you can be different and better than them.
High-ticket dropshipping is a more stable model that I would recommend you to go on with if you want to have a brand and business that people take seriously and would have trust in.
Let’s say your goal is to get a net income of $4000/month. Also, let’s say after a low-ticket product’s (e.g. phone case) sale you make $4, and after a high ticket product’s (e.g. road bike) sale you make $400. You can see that you need to sell more pieces of products to reach the $4000 target a month so you can cover all of your expenses for marketing and for maintaining the business, and also to get money for salaries. It is 1000 pieces of phone cases versus 10 pieces of road bikes.
If you are thinking of a favorable goal of income, and of what amount of markup to work with, find a balance regarding the income, your marketing cost, profit margin, and other expenses.
Where Can You Find Products to Sell in Your Online Store?
We have an in-house solution for you. Syncee is a B2B platform that has a Marketplace where retailers can find millions of products from local & global suppliers with short lead team.
Pick items one-by-one, or fill your online store in bulk. No matter what kind of products you are looking for – high-ticket dropshipping or low-ticket ones – you can find what you wish for. What’s more, the app takes care of the product data updates every day automatically!
Senior Content Manager, Syncee