With dropshipping, the right approach to succeed is to sell high-ticket items. With this, you get higher profit returns. The thing with many dropshippers is they attempt to sell items that only cost less than $10, and they will pocket a profit of $3.
If you do that, you need to sell 1,000 items in a month to make $3,000. While some people may succeed at it, it is not smart. You have to spend thousands for advertising, and spend a lot of time marketing before you can reach that sales level.
But how do you do it? Today, we will show you how to earn make money with high-ticket dropshipping.
Here are the topics we will cover:
- What is dropshipping?
- How do you find high-ticket items?
- What are the best high-ticket products?
- Pros of High-Ticket Dropshipping
- Cons of High-Ticket Dropshipping
If you do this, you only need to sell a couple of products to pocket huge profits. First off, we need to start with what dropshipping is, then move on to showing you how to find these products.
What is dropshipping?
Dropshipping is a popular business model that involves three parties. These are the supplier, you, and your customer. In dropshipping, you sell someone else’s products, and then keep the profit.
Here are the steps on how dropshipping works:
- You sell someone else’s products and put a profit on top of the supplier’s price
- Customer buys from your store, and you order that product from the supplier
- The supplier ships the product to your customer
It is a simple and practical business model because you do not have to keep an inventory. You do not need to buy products and store them. What you just have to do is to build an online store, upload the products there, and market the products.
It is completely up to you how much profit you want to place on top of the supplier’s price. However, you need to make sure that your retail prices are still competitive. You cannot sell an item for $100 if it is selling in the market for only $34, or no one will buy from you.
And this is where dropshippers make the choice of selling low-ticket items. They think that if the price is reasonable, they will have more customers because they can earn profit by the volume of sales.
The problem with this approach is that there are also many sellers competing for the business of these customers. It is not only you trying to sell that summer dress.
Here is what typically happens:
- If there is too much supply in the market, and there is little demand, the price will naturally go down; this is the law of supply and demand
- As dropshippers lower their prices, you will be forced to do the same
- This ends with you having lower and lower profit per product
Also, dropshippers like items that sell at a low cost because they know that they have to pay for the item once a customer orders the product. Even if the customer has already paid, the money will not go directly to your account. Most payment processors will take two or three days to transfer the money to you.
During these two and three days, you should have already ordered the item from your supplier. What this means is that you have to spend money first, ship the item, and then get your money later.
It is this process that makes many dropshippers choose to sell low-priced products. They can afford to pay for it while waiting for the money.
It works, but it will not make you wealthy. If you sell low-ticket items, your dropshipping business will not be a business that can make you leave your day job.
How do you find high-ticket items?
When we hear of the term high-ticket, many people think that these items cost at least $1,000. This is not true. Products that cost thousands of dollars are mostly branded, like Louis Vuitton bags.
You cannot sell items with this price because the customers would rather buy directly from the brand manufacturer, not from you.
For the purpose of this tutorial, we will consider high-ticket items as those that cost $200 or more in retail. What this means is that you can earn a profit of at least more than $30 per item.
With this, you only need to sell 100 units a month to profit $3,000. In low-ticket dropshipping, you need to sell 1,000 units to profit the same amount, with the same effort and the same amount of money for your ads.
Here are the two best places where you can find high-ticket products that you can dropship:
Both are dropship supplier tools. You need to register for an account before you can use them. As directories, they have a list of suppliers worldwide that will ship the items directly to your customer.
Spocket is a software that you can integrate with your Shopify or WooCommerce store. With this tool, you can find products according to the location of the supplier. This feature should make it easy for you to look for products from specific countries.
To make your search easier, you can filter the products by price and category. If you look at the screenshot below, you will see that there is a category and price filter. Use these filters to look for high-value goods that you can sell.
In the Price Filter button, set the minimum price to $200. Then, it is up to you to find products in your niche.
Once that is done, you can scroll down the page and look for a product that interests you. If you take a look at the screenshots below, you can see a jacket and some furniture.
The jacket will cost you $225, but you can sell it for $300 in the market. This should give you a big profit of $75 per sale. If you want, you can also sell furniture, like the 3-seater sofa by Azure Tiger. It will cost you $678.71, but you can sell it for $904.95, which gives you a profit of $226.24.
SaleHoo is like Spocket. It has over 8,000 suppliers, and all of these are approved by the management of SaleHoo. The company has high standards when choosing suppliers, as they want to make sure that both the dropshipper and the customer get the best experience possible.
Here are the features of SaleHoo:
- Verified Suppliers – there are more than 8,000 suppliers here who provide high-quality products. Overall, there are millons of combined low-ticket and high-ticket products in the directory from more than 150 niches.
- Training – You can join free training sessions here. The company hosts e-commerce and dropshipping classes from time to time. The site also has several training materials in written form, all of which you can access at any time.
- Market Research Lab – this is a feature where you can find what products are trending, how much you can sell them for retail, and now much profit you will get. In this lab, the experts have already done the study for you, and all you need to do is to pick a winning high-ticket product to sell.
While SaleHoo is not free, one can get more value for his money because of the Market Research Labs. It is a powerful tool that shows you real data about how consumers are buying certain products. If you know what product is in demand, then you know what product will sell.
What are the best high-ticket products?
Now that you have access to the tools where you can find suppliers, the question is, what products should you sell? If you are using SaleHoo, it would be easy for you to answer this because of the Market Research Labs feature.
But if not, take a look at our commendations below.
Your first option is furniture. You can sell a sofa, cabinet, kitchen tables, dining tables, and so much more. The reason this should be easy to sell is that the product speaks for itself. All you need are great-looking photos.
In this case, your target market are families and couples who just moved in together. People know that furniture is expensive, so you have a lot of room to increase or decrease your prices.
This is a huge niche. You can sell smartphones, USB sticks, dashcams for cars, computer accessories like mouse and gaming keyboards. The list goes on and on.
Electronic items are in demand all-year round, but most specially so by the end of the year. During the holidays, people are willing to spend money to buy themselves good stuff.
Professional toys are remote-controlled cars and drones. These are expensive hobbies, and your target customers are wealthy people who are willing to spend no less than $500 for a single set.
Drones are also highly popular among professionals who use aerial shots for their photos and videos. There are also those who want to get started with doing videos, and drones with cameras are a must for them to start their business.
Pros of High-Ticket Dropshipping
Apart from profit, there are other positive things about selling high-ticket items.
Few dropshippers sell high-ticket items. Many dropshippers do not have the money to pay the supplier up front for the cost of the product. This works well for you, because a person looking for a furniture does not have a lot of options but only you and a few others.
If you sell a camera, there surely are few dropshippers who can spend $1,000 to pay a supplier. But if you have this capital, the market is in your favor.
Since you are selling high-value items, then we can expect that these are also of high quality. For example, drones that sell for less than$50 are those that you buy for 7-year olds. But drones that come with a high-definition camera are not for children.
These products are made to withstand extreme conditions—conditions that are best suited for adults who like to take videos in the mountains. These products can fall and not break a single part.
High-value items are made with high-grade materials, and in strict manufacturing process. And this is why they fetch a higher price.
Surely, people who can afford to buy expensive items will come back for more. It is not like as if they just spent one-time and then not buy more stuff to supplement their first purchase.
If a person bought a sofa from you, chances are he will buy a table top or a center table. If you sold a drone, the customer will definitely need extra batteries, or more accessories.
And where will they buy? They will buy from you because you are in that niche, and you provided them with a good product.
Cons of High-Ticket Dropshipping
As always, there are some risks that you need to know about. There are cons that we would like to discuss, which would help you decide if high-ticket dropshipping is for you.
These products sell for no less than $200. If your profit is $50, it means you have to pay the supplier up front with $150 for every order.
And this does not include the shipping. If another order comes in the same day, you have to pay for it again while waiting two to three days for the money to clear.
You need capital to sell high-ticket dropshipping products. Your other option is to wait for the funds to clear and then buy the product.
If you do this, you have to tell a buyer that there is a processing time of three business days.
Average people do not spend money on luxury. They buy items that they can afford, and only at a price that they think is reasonable.
Because of this, expect to have a smaller market. This is ok, as your marketing efforts will not be ignored. The people who will even bother taking a look at your store and products are those who know that they can afford what you are selling.
Takes time to sell
Because the products are costly, you cannot expect people to make emotional and impulsive decisions. They will take their time to look for alternatives, read reviews, and compare your product to others.
A person is not likely to pay $1,000 right away because he saw your camera or gadget. He will probably spend another week making that decision.
Now, this is fine because there is a strategy to fight this. Make sure you have an email subscription or form in your website.
Once you capture a lead’s email address, it is your responsibility to keep on reminding that person about your product.
Higher shipping cost
Since many of these items are precious, the shipping cost will be a lot higher than your common product. The supplier has to pay for insurance to ensure that he gets his money back in case of breakage.
Furniture, for one, is always bulky. And because of the dimensions of the product, you will be occupying more space, and shipping couriers will charge more. It is up to you if you want to offer free shipping, and then include that shipping charge in the sale price, or charge it separately.
If you dropship high-ticket items, there are risks that you need to prepare for. Research is the best way to avoid these risks from happening, and protect yourself from business failure.
All in all, there is more money to be made in high-ticket dropshipping. While it is true that you need capital, this capital will pay for itself in the future. Selling high-value items is the only way you can make a lot of profit without a huge volume of sales.