High-ticket products sound like the easy shortcut to six figures – but are they really? In this post, I reveal the real cost of selling high-ticket products.
Watch the video below:
(Click here to watch on YouTube)
There’s been an explosion of high-ticket stores lately.
And I get why. Selling ten products priced at $2,000 will make you way more money than a $10 necklace. It’s a sexy concept that has beginners clamouring to start.
And if you hone the right skills, a high-ticket store can make you a lot of money with less work. If you sell 10 products for $2,000, that’s $20,000 a month – and $240,000 a year.
Unreal right? But as the old adage goes “All that glitters, is not gold”. And the same applies to running a high-ticket store.
That’s why I want to show you what running a high-ticket store really takes – to help you decide whether it’s a good option for you or not.
What is a high-ticket product?
A high-ticket product is one that’s priced on the high end ($1,000+). Items like sofas, beds and wardrobes fall into this realm. Stores like a Louis Vuitton, Ikea or even car showrooms also fall under the hat of high-ticket brands.
Obviously, these items are expensive so you can make thousands by just selling a few a day. A high-ticket dropshipping store is basically combining a store and U.S based suppliers to fulfil the orders for you.
This a lot different from what we teach and LOVE: selling low cost items from AliExpress using a shopify store. We have several videos, an e-book and even a full step-by-step course on how to do this.
For some reason though, this model gets a bad rap. A clear example of this would be the comparison of a wolf mug (low-ticket) to a kayak (high-ticket).
The idea is that if you sell this kayak for $2,000 and make a 30% profit margin – you’ll make $600 profit a sale. This sounds more attractive than to sell a wolf mug for $10 and make a 30% profit margin: $3. So, in turn, you’d need to sell 200 wolf mugs to make as much money as you’d earn for selling one kayak.
This is fair maths – but let’s examine this hypothesis a little further. Firstly, if you’re Dropshipping the right way, you should also be making sales from upsells, cross sales and repeat buyers in your email list. With all of these other sales, you can bump up your AOV significantly – so you won’t just make $3.
Secondly – a pet peeve of mine – is when people use this specific mug as an example of selling it for $10. If you check the price of these wolf mugs on AliExpress, you’d notice the cheapest wolf mug is actually $12.88.
Asides both arguments, if we look at this theory on a surface level, of course it would seem easier to sell 1 product instead of 200. Psychologically, 200 is bigger than 1, so it’s automatic we feel selling a mug would be a lot trickier.
To illustrate this, we’ll use a sales hack I love using in my stores. Let’s assume this wolf mug is being sold for $10 in our store, and when advertised on Facebook, we split tested this mug using the same discount but as different versions:
- Mug A: 50% off
- Mug B: $10 off
Even though the discount is exactly the same: which mug do you think will make the most conversions?
Hint: The answer is Mug A.
And the reasoning behind this is simple: 50 is bigger than 10. So, we feel as if we’re getting a bigger bargain than the latter. So, when you hear 200 sales v 1 sale – the difference is so big that it’s easy to trick yourself into thinking 1 sale is easier to make.
When the cold truth is it’s much easier to make 200 sales off a $10 item, than a $2000 one.
You have to THINK before you buy
People always ask why someone would bother buying an item from a dropship store when they can easily buy it for cheaper (and faster) from sites like eBay and Amazon.
The reason why is because low-ticket items in dropship stores are impulse buys. When you buy something without really thinking about it. A great example of this is when you throw some chocolate into the basket as you’re on the way to checkout.
Impulse buys don’t require thinking. They’re bought out of emotion. If a wolf lover saw that mug, they’d think “WOW, this mug looks super cool. I NEED this”. They wouldn’t be disheartened by the price and check every other site for better deals.
It’s the holy grail to making fast sales: sell items people won’t find at their local store. THIS is the right way to dropship items.
The wrong way would be to try and sell a spatula.
If you buy a spatula, it’s because you either need another one or a replacement – not because it excites you.
The same goes for high ticket products.
You can’t buy a couch on impulse. It requires a great deal of planning and there are several factors you might consider:
- What size do I need?
- How fast do I need one?
- What’s my budget?
- How am I going to get rid of my old one?
All these key components mean customers won’t have time to waste on getting a refund as they’d want to nail it the first time. So, chances are if they visit your store, they already visited 5 other ones.
This means one thing: competition.
But not just any competition. You’ll be up against multi-million-dollar brands like IKEA, Pottery Barn and Ashley Home Store.
Though competing with big brands would be tough, it isn’t impossible. That’s why if you dare to take the leap, here’s some of challenges you’ll need to overcome.
Challenge #1: Build an enormous amount of trust
No one wants to spend $1,000 on a bad couch – discover they don’t like it – then ask for their money back. Even if you do accept refunds, returning a couch back through mail isn’t worth the hassle. Especially when you realise shipping costs to China amounts to the same price they bought the couch.
That’s why people love IKEA – they have showrooms! People get to see the couch in real-time, try it out at the store, THEN decide whether it’s a good fit. They can do all of this without spending a penny, or worrying whether it will look the way it did on the listing.
This is a big challenge for online stores. With only so much trust you can offer online, in-person interactions for big purchases always come out on top.
Challenge #2: You’ll need to send people through a sales funnel
A customer won’t price-check an impulse item, but they sure will when buying a couch. This means you’re going to be competing directly with big brands, which means a bigger sales funnel. I’m talking landing direct sales on the phone, building showrooms, and having a much slicker store than the basic Shopify one we teach in this video.
Challenge #3: Have a lot of start-up money set aside
Landing a $2,000 sale for your first time sounds awesome – until you realise that money doesn’t come instantly.
PayPal can easily take up to three weeks to arrive, with Stripe only having weekly pay-outs. And to make matters worse, you’ll need to pay for them item AND its shipping from the supplier. All on the same day.
The reality is, to have everything smooth sailing at the start, you’ll need money set aside to fulfil orders on time if you want to reduce complaints and shipping times.
Selling high-ticket items requires far more skills, far more experience and far more money to get started.
There is an exception though: having a mentor. A mentor can help you along the process and tell you what to do but most importantly what to avoid. If you’re a beginner, we don’t recommend you start a high-ticket business on your own, and that you seek help from a mentor – who’s already had success – to help you achieve this goal.
But regardless of which dropship method you choose, the end goal is to make money. That’s why we’ve crafted a step-by-step blueprint on how to build a six-figure Dropshipping store.
Six steps to building a six-figure Dropship store
In this free book, I’ve included:
- How just one “winning item” can earn $10k/month. Yep. A lot of people don’t realize this… but most stores make the majority of their money from just a handful of items!
- The right way to choose AliExpress suppliers. Picking the right AliExpress dropshippers is crucial to drastically reduce things like refunds. Learn how to pick the right suppliers.
- Why long shipping times DON’T matter. A lot of people are scared to start Dropshipping because of “long” shipping times. You’ll learn why this doesn’t matter inside.
- Why their stores take 2 hours a day to manage. You’ll learn how they utilize apps like Oberlo to make their stores semi-automated… making managing orders super simple!
Click Here to Access the Free Book