• Derick Ho

Low-Ticket vs. High-Ticket Products: Which Products Should You Sell?

For the past few years, it seems like every week I get a question from someone asking whether to sell low-ticket or high-ticket products.

Truth to be told, this topic is enough to trigger endless debates on which is better to sell.

If you check back in a few months later, the debates disappeared a few weeks into their journey. 

Lately, I've been seeing around many stores that are leaning towards high-ticket products.

And I get why. Selling ten necklace products priced at $2,000 will make you way more money than a $10 bracelet. It’s a glamorous dream that has beginners clamouring to start.

And doing your marketing skills right will make you a lot of money with less work.

Imagine selling 10 products for $2,000, that’s $20,000 a month – and $240,000 a year. You'll be looking your way to buy a Bentley Continental GT pretty soon!

On face value, high-ticket products sound like the easy shortcut to six figures and your Bentley Continental GT – but are they really? In this post, I reveal the real cost of selling high-ticket products.

This post isn't going to debate to see which one is better. In fact, I will not be telling you to go for high-ticket or low-ticket products. I will open up your perspective for you to decide whether it’s a good option for you or not, and what it takes to sell a high-ticket product.

What is a high-ticket product?

The definition of high-ticket product is selling products for over $200. Items such as sofas, beds and wardrobes fall into this category. Stores like a Louis Vuitton, Rolex or even car showrooms also fall under the hat of high-ticket brands.

Obviously, these items are expensive so you can easily make thousands by just selling a few a day. It doesn't take a genius to know that.

Here's an example: if you sell this sapphire necklace for $2,000 and make a 35% profit margin – you’ll make $700 profit a sale. Sell 3 per day and you will be racking in $2,100 per day. This sounds a whole lot more attractive than to sell a T-shirt for $10 and make a 30% profit margin, which is a mere $3. So in relative, you would need to sell at least 700 T-shirts per day in order to match up to the sales of sapphire necklace.

So logically speaking, it would seem easier to sell 1 product instead of 700. Psychologically, 700 is bigger than 1, so it’s natural that we feel selling a T-shirt would be a lot trickier.

Alright here is another example for you to understand better.

Let’s assume this T-shirt is being sold for $20 in our store, and when advertised on Facebook, we split tested this T-shirt using the same discount but as 2 different ads:

T-shirt A: $10 OFF

T-shirt B: 50% OFF

Even though the discount is exactly the same: which mug do you think will make the most conversions?

The answer is T-shirt B.

The reasoning behind this is very straightforward. Even though both ads are running at an exact same discount, T-shirt B offers a more "attractive" deals as 50 sounds more of a better bargain than 10.

So, when you hear 700 sales vs 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 hard truth is it’s much easier to make 700 sales off a $10 item, than a $2000 one.

The Higher Price Tag Your Product Costs, The More Time To Think To Buy Is Required.

.....and that isn't a good thing for every salesman that wants to close sales fast. The longer your customers have to think, the higher chances your customers will likely NOT to buy.

There's a reason why car companies and property developers gives out huge commissions to their salesmen.

Truth to be told, the easiest way to make a sale are basically products that are impulse buys. Low-ticket items in dropship stores usually falls into these category. Impulse buys meant you buy something without really thinking about it. One good example of this is when you just simply throw in a $1 can of cold beer into your shopping basket when you are about to checkout.

Impulse buys don't require thinking. Items that falls under the impulse buy category are usually bought out of emotions.

For example, imagine a Hello Kitty lover saw that cutlery set, they’d think “WOW, this looks super cool. I NEED this”. They wouldn’t be disheartened by the price and check every other site for better deals.

There isn't any magic bullet or "secret" in this. This is the key element 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 however, would be to try and sell a regular cutlery set.

Not that it doesn't sell, but it’s because on a whole you either need another one or a replacement – not because it excites you. By putting common sense, you won't go and buy a cutlery set that you need it now and wait for 2 to 3 weeks for it to come.

To understand more about finding winning products, click here.

The same goes for high-ticket products. You can’t buy a dining or TV set on impulse. Remember that for high-ticket products, customers would require more time to consider and will more than likely to thick twice or even thrice to fork out hundreds or even thousands of dollars. It's human nature.

And one more thing to take note of – by settling high-ticket items you’ll be basically going up against multi-million-dollar brands such as IKEA etc.

I hate to say this, but with only so much trust you can offer online, in-person interactions for high-ticket products always come out on top.

No one wants to spend $1,000 on a furniture set – then discovered that they don’t like it – then ask for their money back. Well, even if you do accept refunds, it isn't worth the hassle of returning the entire furniture set back through mail. Especially when you realise that the shipping cost back to china amounts to the same price that they bought the furniture set.

In summary

High-Ticket Products:

  • Price points are $500 and above

  • Average profit margin: 20% - 30%

  • Generally profits are higher (due to the large amount of numbers)

  • Big bulky products (may be expensive, working with the supplier to fix damages)

Low-Ticket Products:

  • Price points are usually between $10 - $50

  • Average profit margin: 40% - 80%

  • Generally profits is lower per sale (due to the lower amount of numbers)

  • Smaller products (low initial costs, either refund or keep the items)

In conclusion:

Up till this point, I would have probably explained more of the negatives side of selling high-ticket items. But no, my point here in this post isn't to dissuade you to sell high-ticket products.

My purpose here is to open up your perspective for you to let you understand what you will be facing between selling low-ticket items and high-ticket items. And it takes a different marketing methods to market between these two. Selling high-ticket items requires far more skills, far more experience and far more money to get started.

Talk soon,