High ticket dropshipping is profitable, but only if you put a lot of time and effort into making it successful and profitable. Unlike traditional dropshipping, a high ticket dropshipping store does not rely on volume to become profitable. Between low ticket and high ticket dropshipping, high ticket dropshipping can potentially become more profitable in the long run, given that you can make more money with less work. Here’s a simple calculation to help you understand:
Low ticket dropshipping:
- Sell a low ticket dropshipping product that costs $10
- Put a $10 markup on each unit
- You get a revenue of $1,000 for every 100 units sold
High ticket dropshipping:
- Sell a high ticket dropshipping product that costs $300
- Put a $200 markup on each unit
- You get a revenue of $2,000 for every 10 units sold
Arguably, the most profitable way to dropship is by starting a high ticket dropshipping business. You can make a lot of money even by just selling a few units, as long as you have a higher profit margin. However, do not be enticed by the idea of making money with little work. At the end of the day, dropshipping is a business model that’s extremely saturated, highly competitive, and very technical. Here are some downsides to watch out for when it comes to high ticket dropshipping:
These issues are very hard to control and there’s very little that can be done to bypass these pitfalls. Instead, an online business I would recommend to entrepreneurs is local lead generation. Local lead generation is a business model that only requires 5 steps:
5 Reasons High Ticket Dropshipping Isn't Profitable in 2023
1. It’s not a get rich quick scheme
Just like most businesses out there, high ticket dropshipping requires a lot of hard work, patience, and dedication for it to become profitable. It’s not a business model that’ll make you rich quickly, nor is it guaranteed to be successful. The idea of getting rich quickly hinders you from putting in the necessary work and warps your perspective of success.
Unfortunately, aspiring dropshippers looking to enter the market are in for a lot of disappointment. Not only does dropshipping take time to be profitable, it is also arguably already unprofitable in 2023. It's extremely saturated, highly competitive, and requires a lot of maintenance and up keeping.
Be cautious of dropshipping success stories and testimonials that make a lot of enticing claims and alluring promises. Always remember that most of these dropshippers who claim to be successful are also the ones selling a dropshipping program, course, or paid training. Naturally, they’re more inclined to talk about success because they want you to be convinced to buy whatever course they’re selling.
2. It’s a saturated industry
According to Google Trends, interest in dropshipping has shown an upward trajectory since 2014.
The same can be said for high ticket drop shipping:
This might seem favorable to dropshippers looking to enter the market in 2023. However, this increase in interest over time is not only indicative of growth and development, it also shows how saturated and competitive dropshipping already is. According to a report from Shopify, there are over 1 million dropshippers worldwide as of 2023. However, if we consider the fact that dropshipping falls under the eCommerce industry, we start to realize just how massive the market really is.
You’ll have to compete with other dropshippers, traditional retailers, Amazon FBA sellers, and even suppliers and manufacturers that are cutting the middlemen and launching their own online store.
To add insult to injury, almost every product known to man has already been explored, which makes it almost impossible to come up with a product with high demand. Even when you do come up with a winning product that has a high profit margin, or discover a profitable niche, there’s that risk of other dropshippers copying your product, selling it at a cheaper price, and even making a better version of it.
3. Lowest price in the market wins
Have you ever heard of the dropshipping paradox? The dropshipping paradox is a phenomenon that most dropshippers suffer from. Here’s how it goes:
Outperforming your competitors and being profitable means offering the lowest prices to your customers. Setting low prices, however, inevitably leads to low profit margins, which then prevents you from ever becoming profitable. Hence, the dropshipping paradox.
Dropshipping often fails because of the sheer amount of dropshippers all competing against each other, creating an all-out war where the lowest price wins. A low quality product that’s cheaper will almost always outsell an expensive, high quality product.
While you could argue that profitability can be possible through selling at a high volume, it will only be a matter of time until someone offers a price that’s lower than yours, and you’ll be forced to go back to the drawing board again.
4. People will buy high ticket products from established sellers
High ticket dropshipping, in simple terms, is the process of dropshipping an expensive product from a supplier to a customer. Here is a list of the best high ticket dropshipping products in 2023:
- Electronics
- Furniture
- Kitchen appliances
- Outdoor equipment
- Automotive parts
Here’s a version of that high ticket item list along with trusted sellers for each category:
- Electronics (Target, BestBuy, Amazon)
- Furniture (IKEA, West Elm, Allform)
- Kitchen appliances (Lowe’s, Home Depot, Wayfair)
- Outdoor equipment (Dick’s Sporting Goods, Walmart, Deckers Outdoor Corp)
- Automotive parts (AutoZone, Advance Auto Parts, Rock Auto)
People are more inclined to purchase from a store that’s established and reputable, whether it is a high ticket product or a low ticket product. If you’re going to spend a lot of money on an expensive item, would you rather spend it on a big brand or a dropshipper that’s dependent on Facebook ads? As discouraging as it is, dropshipping just isn't profitable for the simple fact that dropshippers will always be inferior to large scale companies and businesses.
5. 80% of dropshippers fail
A study by Shopify revealed that only 10% to 20% of dropshippers are successful and profitable, while 80% fail within weeks or months. Aside from the reasons mentioned above, around 90% of dropshippers are unprofitable because of a variety of uncontrollable risks and issues, such as:
- Product delays
- Shift in consumer trends
- Expensive shipping and delivery costs
- Costly ad spend
- Difficulty in finding a reliable supplier
- Dropshipping is dependent on impulse buys and high demand
On the other side of the spectrum, there are mistakes dropshippers can control but still commit on a regular basis. Examples of these include wrong niche selection, underestimating product research, neglecting customer service, and many others.
High Ticket Dropshipping vs Regular Dropshipping (Low Ticket)
High Ticket Dropshipping | Regular Dropshipping |
|---|---|
Mainly focused on high ticket items such as electronics, furniture, camping gear, and many other. | Involves selling any low ticket product such as phone accessories, pet products, and kids toys. |
Setting up a high ticket dropshipping store requires less inventory since you will be selling high ticket items. | A low ticket dropshipping store entails keeping a lot of stock because you will be selling products that are more on the cheap side, therefore attracting more buyers and orders. |
You can make a lot of money even by selling just a few units. | Even if you sell a lot of units, you might struggle to be profitable due to low profit margins. |
Your market might be smaller since selling an expensive product is often easier said than done. | The market for cheap products has a high demand since people are more inclined to purchase items that are low cost and inexpensive. |
Selling an expensive product often comes with a certain level of expectation due to the amount of money involved. | Expectations are lower since people pay for low prices. |
Related articles on High Ticket Dropshipping
Conclusion: Is High Ticket Dropshipping Profitable? Is It Still Worth It?
High ticket dropshipping can still be profitable even in 2023, but it might not be worth it anymore. The dropshipping market alone had a market value of around $221.3 billion in 2022 and is expected to surpass the $240 billion mark by the end of 2023. However, most of the dropshipping market belongs to traditional dropshippers, not high ticket dropshippers.
Reality sets in quickly once you understand that most people prefer to buy expensive items from brands that are already established - why would they spend money on you when they can purchase from Amazon instead?
You also have to consider the fact that you will be competing against other sellers in the eCommerce space, which include:
- Fellow high ticket dropshippers
- Low ticket dropshippers
- Amazon FBA sellers
- Amazon itself (Since Amazon also sells its own products)
- Traditional retailers
- Established brands such as Walmart, Target, BestBuy, and many others.
If you’re looking to enter dropshipping and invest a lot of money, you might be better off putting that money in another online business that has a higher potential to become profitable and sustainable.
Why Local Lead Generation Is the Best Online Business
I’ve created 6-figure businesses with dropshipping and many other online businesses, but nothing beats local lead generation. Local lead generation is the process of building a website, optimizing in accordance with Google’s complex algorithm, allowing local businesses and companies to generate leads through your website, and making money for each sale.
Reasons local lead generation is better than dropshipping:
It’s not saturated: Each city has 50 to 100 niches you can explore. With dropshipping, almost every product is already being sold by thousands of other dropshippers.
Web traffic does not rely on paid ads: Dropshipping requires paid ads, but it doesn’t guarantee that your products will receive traffic because there are other sellers also paying for ads just like you. With local lead generation, your website generates substantial organic traffic because it is optimized in accordance with Google’s algorithm.
It’s a business model that can’t be easily duplicated: Dropshipping is a rinse-and-repeat business that almost anyone can do, inevitably resulting in a competitive and saturated market. Local lead generation, on the other hand, requires a specific set of skills or expertise to get started, making it a business that cannot be easily replicated by anyone. Unlike dropshipping, not everyone understands how local lead generation works.
It's sustainable: Studies show that while dropshipping can be profitable within 3 months, most dropshippers fail to sustain their business after the 3rd month. This is definitely not the case for local lead generation. It isn’t just an online money making opportunity, it’s also a skilled trade that allows you to create a sustainable, long term business. It’s a craft that’s constantly evolving, which means you have to keep learning it in order to stay competent and relevant.
The best part about it is it requires little to no maintenance once you’ve finished setting up. I have sites from 2014 that still generate over $2,000 per month, and I don’t even have to maintain them regularly.
With local lead generation, financial stability is just around the corner. All you have to do is take the next step and grab the opportunity to create a business that is highly profitable, easily sustainable, and has the potential to become passive income in the long run.
