The Investment Case For High-Ticket Dropshipping

A little over five years ago, I started my e-commerce journey. It really started with educating myself on all the various business models out there. Ultimately, I created a framework to help me evaluate each business model and this helped me choose which model I would eventually invest in. I chose dropshipping and specifically, high-ticket dropshipping. I’d like to explain HTDS to you and explain why I know it’s the best business model for 2021 and why I don’t see that changing in the next several years.

What’s Considered High-Ticket Dropshipping?

When I say high-ticket dropshipping, I’m talking about the selling price of your core products. Dropshipping itself is often maligned for its low percentage margins but if you’re selling something over $1000, even at 10-15% you’re earning a very nice profit on each sale. If you’re earning $100 or more per sale, you’re doing quite well. This is real, and I’ve duplicated this success across multiple HTDS stores. All of my sales are US based so I wake up each morning and check my iPad. When I see thousands of dollars of sales from overnight, I know it’s going to be a good day.

What’s the Price Range for HTDS?

Our stores sell items that cost at least $500 but we prefer items that are above $1000. We also have products up to $15,000+. The accessories we sell can be below $500 but these only work with people buying one of the high-ticket core products. High-ticket dropshipping is not about volume, which is what you see in low-ticket stores. It’s about having a high-price, core product offering. There are a lot of vetted niches out there that have those core, high-ticket items like furniture, home decor, hobbies, etc. And if you can establish yourself as an authority player in your niche, which is what I’ve done, you’ll be successful.

How You Get High-Ticket Customers to Buy

Your market is the upper, middle-class buyer that doesn’t have to think too hard about pulling out their credit card for a $1000 purchase. They’ll usually watch a couple of product videos and maybe do a price comparison at another store, but $1000 isn’t a difficult decision for them. But here’s where you win. You’re a niche store and you can go above and beyond to create the kind of on-page advice high-ticket shoppers are looking for. This is the kind of thing that stores like Amazon don’t do.

Here are a few things I’ve done to keep the prospective buyer on my sites to get the sale:

  • Use supplier photos to create product videos
  • Create a comprehensive buying guide to showcase how a product’s features work.
  • Create an FAQ page with common questions asked by buyers

We always create what I call The Perfect Product Page. You’re basically trying to create the best page on the Internet for that product. And this is all outsourced to specialist creators and writers who are experts at doing this very thing for us.

Why Organic Traffic Matters

SEO optimized articles and collection pages around your products are important too. Content on your store’s website is critical to establishing your authority with Google. Because Google sends you organic traffic twenty-four hours a day and you don’t pay for that other than the outsourced optimized content, which isn’t expensive and created only once.

When you start to develop backlinks on other authority sites like your suppliers’ websites, other blogs or YouTube reviews that refer to you, then your organic traffic will rise. We’ve worked on this in our stores and we have a phenomenal amount of organic traffic now that we don’t pay for. We have sites right now where our organic traffic is many times greater than our paid traffic. If you write the right content that brings a buyer, not a browser to your site through Google search, you’ll get the sale.

You can’t get away with crummy articles written by non-native English speakers that don’t add value. There’s no gaming Google which used to be a strategy with marketers several years ago. You really have to add value with the content you create.
With the analytics Google gives you, you can see which content and keywords are bringing you traffic and which of those converts to sales. Then you have the data to make better business decisions regarding further content.

Brand Loyalty Matters But Not How You Think

Americans love spending money on household items they’re crazy about. Platforms like Houzz are all about getting shoppers to buy household goods and services.
Most people can’t name a lot of the brands in their house, but they can distinguish between what they like and what they don’t like. They will do some research before they spend $1000-$3000 on a product for something that’s important to them.

Think about the raving brand loyalty Apple has, especially with their iPhone. The loyalists absolutely must have the newest version. They won’t have any other brand and frankly, they’re buying it for that latest option that only the new version has. Buyers acquire an affinity for brands like Apple. But you as a seller have the opportunity to be the educator of your prospective buyer. You can create product comparisons and really establish yourself as the brand and the authority of your products. You can talk about the pros and cons of each of the products so that people can choose what they’re looking for. Do they want something with a lot of features or just something entry level? This is how your business establishes itself and competes with the big box stores that won’t take the time to interact.

High-ticket dropshipping is a really attractive place for someone to operate right now. It’s important to focus on products where people will readily pull out their credit cards because they are either passionate about it, it’s a hobby, or it’s something that’s required for daily life in their household.
You’ll have success investing in and running these sites if you can add value to your customers, get organic traffic and really connect with your buyers through excellent content and customer service. This business model has tremendous upside and is not complicated to operate nor does it have large financial investment or risk.

4 Comments. Leave new

  • Hey Ian! Quick question – are you selling well-known brands or no-name brands?

    Reply
  • Hi Alex! Yes. We absolutely sell branded products from suppliers based in the USA. Our suppliers source products globally but are located and ship from warehouses in the USA.

    These brands are well known in their niche, but we avoid niches with huge brand affinity (think Apple). There are literally hundreds of niches with high priced products from great brands based here available.

    Reply
    • Hey Ian! You mention 10-15% margins. I’m assuming that’s net? What’s your average gross profit margin like if I may ask? Thanks in forward!

      Reply
      • Hi Samuel! Net margins should be in that range. We typically do at the higher end as we have operating costs scaled over several sites. Gross profits margins are 5 to 10 percent higher. Hope this helps!

        Reply

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