High ticket vs low ticket dropshipping:
High Ticket Dropshipping
High ticket dropshipping products are expensive, with prices ranging from $200 to $1,000. As such, they can be harder to sell to general buyers.
High ticket dropshipping brings bigger profit margins. Even low sales can generate significant profit. For instance, a single sale of a high-ticket item can yield a profit margin of 30% up to 50%.
Most high ticket customers belong to the middle and upper class category.
Fewer dropshippers are selling expensive products online. This reduces possible competition.
Shipping and deliveries can be a challenge. High ticket items often require specialized shipping services, which can potentially increase costs.
Needs special care due to the high price and nature of products. High-ticket item buyers often expect premium customer support, such as personalized assistance and extended warranties.
Cash flow is slower, as consumers are more critical when purchasing high-priced items.
Low Ticket Dropshipping
Low ticket dropshipping items are cheaper, with prices ranging from $1 to $100. The items appeal more to impulse buyers online.
Low ticket dropshipping only generates low profit margins of 10% to 20%. Profitability heavily relies on the number of your total sales.
Appeals to a broad range of buyers, from lower to upper class.
Higher competition due to ease and cost-effectiveness.
Shipping is simpler and more straightforward. Low-ticket items often qualify for standard shipping methods, which can reduce shipping costs.
Low ticket item buyers are often satisfied with basic customer support.
Cash flow is faster but it does not always assure profitability. While low-ticket items can generate quicker sales, the average order value is significantly lower.
High ticket and low ticket dropshipping business models are highly similar. However, the primary difference between them is product pricing. High ticket dropshipping involves selling expensive items.. Low-ticket dropshipping focuses on cheaper products.
Redditor Mou-Legendary says high ticket dropshipping can be potentially “rewarding and lucrative.” Dropshippers can “benefit from lower marketing costs, higher profit margins, less competition, and more loyal customers.”
Anton Kraly of Drop Ship Lifestyle teaches that high ticket dropshipping requires finding reliable US distributors. He says China-based suppliers should be avoided. A dropshipping pioneer, Anton discovered the business model in 2009. He has since built multiple dropshipping stores and made over 8 figures in sales.
Meanwhile, Quora user Kawya Gunasekara says selling low ticket products is ideal for inexperienced dropshippers.
Michael Bernstein of Bernstein Consultings also believes low ticket is better. With it, you can test various products without spending expensively. Plus, you can immediately see which ones are working for your business. “With high ticket, it's just going to be so much more expensive,” he says in a YouTube video. “If you are on a tight budget or if you're not confident in all this dropshipping thing, you will quit after losing money.”
Overall, low ticket dropshipping is easier to start. It also brings faster cash flow and has higher demand among potential buyers. These factors make it ideal for new entrepreneurs. However, success is not guaranteed because of market saturation and competition. This business model demands significant time, effort, and money. There remains a substantial risk of failure despite best efforts. In fact, the average success rate for most dropshipping businesses in 2024 is at 10% to 20%.
In this feature, we compare both business models. We tell you why low ticket dropshipping is the clear winner between the two. Finally, we also introduce you to local lead generation. This alternate online business idea generates better revenue than dropshipping.
1. Low ticket dropshipping costs less to start.
Low ticket dropshipping costs less to start since you can sell a wide array of cheap products. For example, you can sell products that cost $1 to $100. In comparison, high ticket dropshippers sell products ranging from $200 to $1,000 or more. This can be a bad idea for beginners still unfamiliar with the business model.
Generally, low ticket stores only need a startup cost of $100 or less. High ticket entrepreneurs usually need at least $2,000 to $4,000 to build their business.
2. High ticket dropshipping offers a higher profit margin.
High ticket dropshipping offers higher profit margin at 30% to 50%. On the other hand, low ticket items can only bring you 10% to 20%. In short, you can make more money selling a few high ticket products than a lot of low ticket products.
For example, you can earn a revenue of $3,000 if you sell 10 units of a $500 high ticket product with a markup of $300 each. Meanwhile, you can only make $2,000 in revenue after selling 100 units of a $100 low ticket product with a markup of $20 each.
3. Low ticket dropshipping attracts more customers.
Low ticket dropshipping attracts more customers from all economic classes. As Quora user Jon Blockstock puts it, dropshipping “mostly works because of impulse buyers who buy a low-mid ticket item on the spot.”
In contrast, high ticket dropshipping has a more affluent client base. Your products will only attract attention from a smaller number of prospective customers.
4. Low ticket dropshipping is less competitive.
Low ticket dropshipping is less competitive than its high end counterpart. Sure, the low ticket niche is filled with thousands of small sellers you’ll have to compete with. However, you’re directly going against bigger brands as a high ticket dropshipper.
According to Adobe's Future of Marketing Research, 71% of consumers prefer buying from a trusted brand.
This can pose a challenge to your business, since you’re not as popular than established competitors. In some cases, investing in digital marketing may not even guarantee sales.
5. Low ticket dropshipping items are easier to ship.
Low ticket dropshipping items are easier to ship than high ticket products. In some cases, high value products are bulky and heavy. They often require special care to avoid possible damages during shipping. Although your dropshipping suppliers fulfills all customer orders, any delays or mishandling can lead to negative reviews for your business.
6. Low ticket dropshipping customers have fewer expectations.
Low ticket dropshipping customers have fewer expectations when they purchase from your store. High ticket buyers typically demand a premium experience. They want top-notch customer care if they need help with installations, repairs, replacements, and others.
Selling low ticket products usually does not require that level of support. Buyers have lower expectations because of the cheaper price tag.
That said, it’s important to choose a reliable dropshipping supplier. You want to go with one that provides excellent customer support. Moreover, they should have clear return policies and communication channels.
7. Low ticket dropshipping brings faster cash flow.
Low ticket dropshipping brings faster cash flow because you’re selling affordable products. High ticket drop shipping, on the other hand, has a slower cash flow since you’re selling premium items.
As a low ticket dropshipper, you can boost your sales by upselling. On Reddit, CurveImpressive4204 says sellers should offer incentives to encourage people to buy more items. “If you can understand how to target the customers you need, it doesn’t matter what you’re selling,” adds the Redditor.
Overall Winner: Low ticket dropshipping
Low ticket dropshipping is better than high ticket dropshipping in many ways. Not only is it easier and cheaper to start, it’s also a business model that’s more proven than high ticket dropshipping. All you have to do is:
- Select a profitable niche and conduct product research
- Find a reliable supplier or manufacturer
- Set up your online store
- Market and advertise your dropshipping products
- Fulfill orders every time they’re placed
- Invest in a dropshipping course (optional)
4 Reasons Low Ticket Dropshipping Is Better For Beginners
1. It’s easier to start
Low ticket dropshipping is easier to start compared to high ticket dropshipping. You only have to sell products that are low-cost, inexpensive, and are in high demand. You have access to a market of impulse buyers and all kinds of consumers. A high ticket dropshipping niche, on the other hand, deals mostly with high end items. This business model often requires a lot of marketing and advertising.
Here are some sample products for high ticket and low ticket dropshipping and their average prices to help you compare:
Low Ticket Dropshipping | High ticket Dropshipping |
|---|---|
Phone accessories ($5 to $30) | High end smartphones ($800 to $1,500) |
Kitchen utensils ($5 to $50) | Laptops ($1,200 to $2,500) |
Fitness equipment ($10 to $100) | Professional-grade cameras ($1,500 to $4,000) |
Wired earphones and headphones ($10 to $50) | Luxury watches ($1,000 to $10,000) |
Eyewear ($20 to $100) | Premium golf clubs ($1,000 to $3,000) |
2. The risk is lower
Low ticket dropshipping has lower risks so you won’t have to worry about losing hundreds or thousands of dollars. Besides, a low ticket item is usually priced below $100. Even if your supplier sends a broken or damaged unit to your customer, you won’t lose as much money. You could issue a refund and recover your losses after selling just a few units.
With high ticket dropshipping, you’ll have to put up hundreds to thousands of dollars in refunds if a delivered item has been damaged. Deciding not to issue a refund and completely ignoring your client could reflect poorly on your dropshipping store. You can get negative reviews and lose more potential customers. According to a BrightLocal report, 94% of buyers admit to avoiding businesses with bad reviews.
Redditor Typical_Spirit_3598 says beginners can use low ticket dropshipping as a stepping stone. They can eventually explore high ticket markets once they become comfortable with the business.
3. Faster product turnover
Low ticket dropshipping has a faster product turnover than high ticket dropshipping. Cheap items sell much faster online than expensive products. The higher sales volume results in a more fluid cash flow. Plus it also allows you to determine which products work and don’t work. As you identify which items sell best, you can recalibrate your business strategies accordingly and make informed decisions.
4. Less complex customer base
As a low ticket dropshipper, you are targeting a wider, less complex customer base. Most online buyers are usually less hesitant to purchase cheap products, even from unknown sellers.
Low ticket items also have simpler customer support systems. In fact, some customers who receive a broken or damaged item tend to just buy a new one. They prefer this instead of going through the tedious process of returning the product or requesting a refund. With high ticket dropshipping, consumers are typically more demanding. Expect most of them to go above and beyond to get their money’s worth.
Is High Ticket Dropshipping Profitable in 2024?
High-ticket dropshipping can be profitable in 2024 if you follow these key strategies:
Select a viable high ticket niche.
- Conduct thorough market research to identify a niche with expensive products that your target audience is likely to purchase online.
Commit to product quality and good customer service
- Offer high quality products and exceptional customer service to build trust among buyers. This can also encourage repeat business.
- Develop a deep understanding of your niche's customers and their needs. You can do this by sticking with your chosen niche over an extended period.
Optimize Your advertising budget.
- Start with a sufficient advertising budget and use it efficiently to reach your target market.
- Tailor your marketing strategies to align with the preferences and behaviors of your potential customers.
What Are Dropshipping Niches To Avoid in 2024?
The dropshipping niches to avoid in 2024 are:
Copyrighted and trademarked products
Dropshipping copyrighted or trademarked products can lead to your store getting shut down. You can only dropship trademarked items if the brand has given prior approval or if you are a verified retailer. Otherwise, your dropshipping business can face legal problems.
Electronics and computer products
Electronics and computer products can be lucrative but risky. Besides, this niche has high potential for financial loss and customer dissatisfaction.
According to WorldMetrics, consumer electronics have a return rate of around 20% for online purchases. Dropshippers can fall into potential profit loss for covering shipping and product costs. Also, marketing electronic products from China can be hard. Today, most US-based consumers prefer electronics and computer products made in the U.S. over those made in China.
Jewelry
The jewelry niche is one of the most highly saturated in the dropshipping industry. So it’s extremely competitive, especially since you’re going against established jewelry brands.
On Quora, Paul Gobat emphasizes that competitor research should be the first step for aspiring jewelry dropshippers. That way, they can see the difficulties of the business model. According to his post, most dropshippers give up after realizing how hard it is to earn selling jewelry products online.
These categories face high competition and low-profit margins. They also present challenges with emotional attachment and personalization. As such, these categories are often particularly difficult for new and experienced dropshippers.
Conclusion: Why Local Lead Generation is the Best Online Business
Both high ticket and low ticket dropshipping can still be potentially profitable. However, it requires dedication and hard work. However, the industry is also highly competitive and saturated. Standing out and finding unique products can be challenging these days. Staying profitable also requires perseverance and strategy.
Local lead generation is a more sustainable online business model than high ticket and low ticket dropshipping. Plus, it has the potential to become a passive income source.
With lead gen, you pick a specific niche within your city or area. You then build a keyword-centric website and then rank it on Google using SEO. Once you make it to the top search engine spots, you can attract organic traffic. You can then make money from renting out your site to small business owners.
On average, you can earn anywhere from $500 to $3,000 per site each month. You can even scale up and build multiple sites to increase your earnings. In fact, I have sites from 2014 that still make me over $2,000 per month and I barely even visit them. Today, I earn a monthly income of up to $52,000.
Local lead generation requires less maintenance. It can provide you with financial stability while allowing you to spend more time with family and pursue hobbies. So while dropshipping can be lucrative, local lead generation is a more stable and less demanding alternative.
