Generally speaking, the biggest difference between high ticket and low ticket dropshipping (traditional dropshipping) are the prices of the products being sold. Any dropshipping store that sells expensive products is considered high ticket dropshipping, while low ticket dropshipping focuses on cheaper and more affordable items. Here’s a general overview of all the differences between high ticket and low ticket dropshipping:
| High Ticket Dropshipping | Low ticket dropshipping |
|---|---|---|
Costs | Any dropshipping product that is expensive or priced higher than normal is considered a high ticket item. These typically have higher costs since the focus of high ticket dropshipping is selling expensive products. | Products that are cheaper or are priced lower than usual fall under low ticket dropshipping. These inevitably lead to lower costs since you sell cheap and affordable items. |
Profit Margin | Higher profit margin, lower sales volume. You can make money even by just selling a few units. | Lower profit margin, higher sales volume. Low ticket items are easier to sell but you have to sell a lot to be profitable. |
Customers | Mostly middle to upper class. | Everyone, from the lower class to the upper class. |
Competition | Less competition since most people tend to shy away from selling expensive products. | More competition since low ticket dropshipping is relatively easier and more cost-effective. |
Shipping and Deliveries | Might be more difficult since you’re basically transporting expensive goods. | Easier and more straightforward due to the nature of the products being delivered. |
Inventory | More difficult since you will store items that are bulky, heavy, or fragile. However, having fewer products means easier tracking and management. | Easier in terms of storage, but might be more difficult to track and manage due to the volume of products that need to be kept. |
Customer Support | Customers might need special care and attention due to the nature and price of high ticket products. | Customer support is simpler and easier to handle. |
Cash Flow | It might take a while to make money since consumers are very critical when purchasing anything high-priced. | Cash flow is much faster since your products are cheaper. However, fast cash flow doesn’t automatically equate to profitability. |
Overall, you should do a low ticket dropshipping business if you're an entrepreneur looking to enter the market. It’s easier to start, has a faster cash flow, and the demand for low ticket products is much higher than high ticket items. However, that doesn’t mean it's a business that’s guaranteed to succeed. Aside from regular dropshipping being saturated and competitive, it’s also a business model that requires a lot of time, effort, and money. Unfortunately, even if you check all the boxes and give it your best, there is still a huge chance your business will fail.
High Ticket vs Low Ticket Dropshipping
1. Cost
Winner: Low ticket dropshipping
Low ticket dropshipping wins by a mile due to the wide array of inexpensive products you can sell. While they slightly have the same startup costs, low ticket dropshipping takes the cake because you can sell products for as low as $1 to get started. As a high ticket dropshipper, your focus will be selling products that are expensive and pricey, which might be a bad idea for those who are just starting out.
2. Profit margins
Winner: High ticket dropshipping
A High ticket dropshipping business allows you to make money online even by selling just a few products. With low ticket dropshipping, you have to sell a lot to make a lot. Here’s a quick comparison to help you understand:
Low ticket dropshipping:
- Sell a low ticket dropshipping product that costs $20
- Put a $20 markup on each unit
- You get a revenue of $2,000 for every 100 units sold
High ticket dropshipping:
- Sell a high ticket dropshipping product that costs $500
- Put a $300 markup on each unit
- You get a revenue of $3,000 for every 10 units sold
Overall, a high ticket dropshipping store is more profitable than a low ticket dropshipping store because it only requires you to sell a few units to make a lot of money.
3. Customers
Winner: Low ticket dropshipping
With low ticket dropshipping, you can appeal to customers in all economic classes since you’re selling products that are cheap and affordable. High ticket dropshipping has a more affluent client base, which means your products appeal to a smaller number of individuals compared to low ticket items.
4. Competition
Winner: Low ticket dropshipping
Even though low ticket dropshipping is filled with thousands of sellers you’ll have to compete with, I would argue that it still wins this category over high ticket dropshipping. Keep in mind that with high ticket dropshipping, you’ll have to compete with established brands that sell expensive and high end products. Not only does this hinder any marketing and advertising efforts you make, it also minimizes your chances of ever making a lot of money as a high ticket store.
5. Shipping and deliveries
Winner: Low ticket dropshipping
Low ticket dropshipping wins this category, since low ticket items are much easier to ship and deliver. High ticket products are often bulky and heavy, which might require special care and attention during deliveries. An expensive item will also be more prone to accidents and damages during shipping, which could cause problems and added expenses.
6. Inventory
Winner: High ticket dropshipping
It is much easier to store high ticket items because you won’t have to store a lot of them. With low ticket items, you have to sell in large quantities, inevitably requiring you to keep a lot of inventory. You could argue that high ticket products are fragile which could pose difficulties in stock keeping, but low ticket items are no different - how are you going to sell products that are damaged?
Overall, high ticket drop shipping wins in terms of storage and inventory since you’re not required to store hundreds of different items at once.
7. Customer service
Winner: Low ticket dropshipping
Low ticket dropshipping stumps, high ticket dropshipping in this area, mainly because of the difference in prices. A low ticket product has lesser expectations since it is priced lower. A high ticket product, on the other hand, requires extensive customer care and service, such as installations, repairs, replacements, and many others.
8. Cash flow
Winner: Low ticket dropshipping
With low ticket dropshipping, cash flow is much faster because you’re selling low-cost products, inevitably appealing to all kinds of customers, including impulse buyers. High ticket drop shipping, on the other hand, has a slower cash flow since you’re selling items that are priced higher than normal.
To make things worse, consumers are more inclined to purchase an expensive product from brands that are reputable and established, making it difficult for high ticket drop shippers to make a lot of sales.
Overall winner: Low ticket dropshipping
Low ticket dropshipping wins, 6 to 2. Low ticket dropshipping is better than high ticket dropshipping in plenty of 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 you want to start with by conducting 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 cheaper to start compared to high ticket dropshipping because you only have to sell products that are low-cost, inexpensive, and are in high demand. You won’t have to worry about exerting a lot of time and effort into selling your inventory since you have access to a market that’s filled with impulse buyers and all kinds of consumers. A high ticket dropshipping niche, on the other hand, deals mostly with items that are expensive, which 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
Unfortunately, there will be instances where even the best dropshipping suppliers might deliver products that are broken or damaged. With low ticket dropshipping, you don’t have to worry about losing hundreds or thousands of dollars since a low ticket item is usually priced below $100. Even if a damaged unit arrives at a potential customer’s doorstep, you won’t lose as much money. You could issue a $20 refund and recover your losses even after selling just a few units.
With high ticket dropshipping, you’ll have to put up hundreds, or even thousands of dollars in refunds if an item delivered by your dropshipping supplier has been damaged or tampered with. If you decide not to issue a refund and completely ignore your client, this could reflect poorly on your dropshipping store and prevent your business from getting new customers and making money altogether.
3. Faster product turnover
Low ticket dropshipping has a faster product turnover and cash flow than high ticket dropshipping simply because cheap and affordable items sell much faster than expensive products. Not only does this result in a cash flow that’s more fluid, it also allows you to determine which products work and don’t work. Being able to quickly identify which items to sell allows you to recalibrate your business accordingly and make the right decisions.
4. Less complex customer base
Becoming a low ticket dropshipper puts you in a position to sell to a wider customer base that is less complex since consumers are usually less hesitant to purchase cheap products, even from unknown sellers. We live in a day and age where throwing away less than a hundred dollars wouldn’t hurt as much as spending more than a hundred bucks.
Low ticket items also have easier customer support since cheap products typically have lesser expectations. Whenever customers receive an item that is broken or damaged, they tend to just buy a new one instead of going through the tedious process of having a product returned, replaced, or refunded. With high ticket dropshipping, consumers will inevitably be more demanding and will go above and beyond to get their money’s worth.
Related articles on High Ticket VS Low Ticket Dropshipping:
Conclusion: High Ticket VS Low Ticket Dropshipping - Are They Still Worth It In 2023?
Overall, both high ticket and low ticket dropshipping are still worth it in 2023, given that you put in the hard work and dedication needed to make them a significant income stream. Dropshipping has been on an upward trajectory within the last 5 years, skyrocketing from a market value of $102.2 billion in 2018 to $221.3 billion in 2022. It is also projected to surpass the $930 billion mark by the end of 2030, which can be good news for aspiring dropshippers looking to enter the market within the next few years.
As a beginner, you should sell low ticket items due to a number of reasons: they're easier to market, they have a faster turnover rate, and customer service is simpler compared to high ticket products.
However, dropshipping is also an industry that’s very competitive and saturated. Here are some reasons why dropshipping might not be a good online business to go for this year:
Why Local Lead Generation is the Best Online Business
If you’re after an online business model that isn’t at the mercy of these risks, check out local lead generation. Local lead generation is a business model that can be accomplished in 5 steps:
On top of that, it also does not require a lot of maintenance. I have sites from 2014 that still make me over $2,000 per month and I barely even visit them.
Local lead generation has the opportunity to become a source of passive income, allowing you to spend more time with your family and pursue hobbies and interests outside work.
