Traditionally new business owners are attracted to the plan of buying a large stock of inexpensive items and then selling them for low profits. On paper, this business model sounds very attractive, however, this option is not the best for everyone. Another popular model for selling successfully on eBay is high-ticket dropshipping.
While it may seem complicated at first, high-ticket dropshipping has a pretty basic idea behind it. In this article, we will give you an in-depth analysis of the model, talk about its pros and cons, and help you set up your own high-ticket eBay dropshipping store.
New to dropshipping? You can check out this beginners guide on how to dropship on eBay step by step
Understanding High-Ticket Dropshipping
Although it does help to sell cheap products as most people have a low budget when starting their first business, it is still vastly expensive to run and manage the “low-ticket business” (as we call it).
High-ticket dropshipping takes a completely different approach. The business model involves selling more expensive items (anywhere from $100 to $10,000) and making higher profits.
Still confused? Don’t worry we have provided a detailed example of the two popular business models so you can put everything in perspective.
Real-Life Example of Low-Ticket Dropshipping
Imagine you invested in a large stock of mobile phone accessories like earphones and chargers. You receive a lot of products for your initial investment, and now all the products are laying in your garage.
Your job is to think of creative ways to market your products and sell the items. It will take a long time before you actually earn your investment back, however, you must be patient. The large number of products that previously felt like a blessing now looks like a burden that you must get rid of.
Real-Life Example of High-Ticket Dropshipping
Now let’s look at an example of a high-ticket eCommerce business. Imagine you bought a bunch of coffee makers from a manufacturer. Your initial investment was high, but you can earn that back by just selling a few models.
Furthermore, you also created a healthy relationship with the manufacturer. After having some solid success, you can make a deal with the manufacturer and get discounted rates and safety return policies in case the item does not perform well.
Is High-Ticket Dropshipping Risky?
The idea of having to invest a large sum of capital in a business venture that might not work scares away many entrepreneurs from realizing their dreams. However, when you carefully think about it, the risks and complications surrounding high-ticket drop shipping are not that intimidating.
Let’s look at the pros and cons associated with high-ticket drop shipping so you can figure out if it’s the right option for you.
Benefits of High-Ticket Dropshipping
Fewer Sales, Higher Profits
The entire philosophy behind selling high-ticket items is that you can enjoy higher profits with each item that you sell. You don’t have to make an insane amount of sales or go through rigorous marketing campaigns just to receive your profits.
You will be selling expensive and generally higher-quality items with low chances of defects. High-ticket dropshipping store owners have to make a few sales a month to reach their targets and can expand their business more rapidly.
Fewer Orders To Manage
While low-ticket sellers generally have to deal with a lot of emails and an overwhelming amount of notifications, high-ticket sellers enjoy a more peaceful and hassle-free business. Since you have only a few orders to manage you don’t have to hire extra help for customer service or order management.
It is also much easier to keep track of your sales and profits. Due to this reason, high-ticket sellers have a much simpler vision to grow their business and can easily review their monthly performance without being swamped with receipts.
Another extremely attractive feature associated with high-ticket items is the congregated customer base. Since you only sell a few products or run a category-driven dropshipping store you can get a pretty decent idea of your audience. After a while, you get more familiar with the traits and habits of your customers and you can better predict what strategies will work best.
Low-ticket sellers are not able to learn from experience the same way since their store generally sells a large number of items that are not only difficult to track but also require a lot of marketing and impulse-buying strategies.
Better Long-term Prospects
High-ticket sellers generally enjoy a more solid business plan with incredible long-term prospects. Since you are only selling high ticket items in a particular niche, it is easier to expand and grow your business.
You also don’t have to regularly switch between items as the trend changes like most low-ticket sellers. A high-ticket dropshipping store is more likely to build a decent reputation and trust in the category after a successful season.
Whereas the low-ticket seller will always be looking for the next big thing to sell, a high-ticket seller can maintain their original plan and follow it faithfully.
Downsides of High-Ticket Dropshipping
High-ticket dropshipping requires a higher initial investment since the items are expensive. There is a greater risk since your dropshipping store might not take off and your investment may be wasted. That’s why it is important to properly research your business plan before making any purchases.
High-ticket sellers also need to have a higher marketing budget since they are managing an expensive business. Store branding and shipping carriers also rack up the bills. So make sure you have enough cash to spare before diving into high-ticket dropshipping.
Whereas low-ticket items are more susceptible to damages due to their small size and lower build quality, it is much easier to pay for these damages. A high-ticket seller has to pay large sums to cover lost, stolen, or damaged goods.
Even though it is less likely that you will face these issues, it is still necessary to keep these points in mind before you start your shop. We advise choosing your shipping carriers wisely since a trusted carrier can minimize the risk of theft and damage.
Difficult to Manage
When we are talking high-ticket items we are generally referring to heavier, more heavy-duty items. These items bring a set of challenges for the owner who must then put extra care for optimal management and hassle-free delivery.
Needless to say, as a high-ticker seller, you will need to invest some capital to ensure your products reach the customers safely. You may also need to take extra precautions to ensure the items are not manhandled during any stage.
Running a high-ticket business is not an easy job. As part of your marketing campaign, you will need to formulate sophisticated strategies to drive sales. Unlike low-ticket items, you cannot depend on trends to boost your sale.
Creating and reevaluating the strategies is the most difficult part of the business that many beginners can’t handle. However, in the beginning, stages of your business, you will not need to rely on these methods to make sales.
Preparing Your Store to Dropship High Ticket Items on eBay
There are a few steps that you must take when setting up your shop to ensure you maximize your profits. Beginners often lack the basic knowledge and sale strategies when setting up their first high-ticket dropshipping business and end up facing serious repercussions such as suspensions.
Below we have mentioned some steps that are imperative to launch a successful high-ticket shop on eBay.
Don’t want to read all the steps? That’s OKAY! You can watch this video instead!
1. Do your Research
You should avoid laziness when doing research for a new business. One of the major traits that beginners lack is patience and waiting for the right time to make your move.
Ensure you put enough time and effort into researching the market, competitors, dropshipping suppliers, and customers before you start your business.
2. Setting up Price Rules
Know your target price range and set price rules to avoid going below your expected price. E.g. you may set a price rule of $100 and then filter out any product that doesn’t meet that price range.
While this may seem like a redundant step, it helps you avoid impulsive decisions that negatively impact your business.
3. Create a New Sale Criteria
Low-ticket products have a higher volume and require more sales to meet profit targets. You cannot use the same criteria and strategies for high-ticket products. Create new criteria depending on the price of your product.
E.g. for a $100 product, you should aim for one sale a week and two to three sales a month. Make sure you set a high-profit margin and don’t undersell as that will bankrupt your business very quickly. Remember the goal is not to make a lot of sales but a few, high-profit sales.
Working with Dropshipping Suppliers
Thoroughly research the supplier that you will be working with. Remember that you are getting into a long-term relationship with your chosen supplier so make sure you know their history, return and shipping policies, and popularity. Avoid major red flags like bad customer service, late shipping, low-rated reviews, and inferior policies.
Why Choose Local Dropshipping Suppliers
Depending on what products you are planning to sell you will choose your supplier accordingly. We recommend working with local dropshipping suppliers as it allows you to fix any on-site problems that occur and instantly take an action.
Local suppliers will also ship products much quicker and allow you to make substantial savings. There is also a low risk of product misplacement and damage as the distance between the customer and supplier is less and you can always physically visit the supplier.
Dealing with International Suppliers
Even though we recommend working with local suppliers, this is not always possible. If you are shipping an international item then you must be extra careful to avoid any scams and issues. Work with trusted dropshipping suppliers and set up additional security measures to avoid complications later down the road.
Create a professional and trusted chain of management and communication so you know where your products are at all times. Remember prevention is better than cure. Fixing problems that have already happened may cost you a lot especially since the items are expensive and international deliveries can be costly.
Setting Up Store
Now that all is said and done, it’s time you launch your eBay dropshipping store and began selling high-ticket items. If you have never sold on eBay before, follow the steps below to start your virtual shop.
1. Creating a Brand
One of the biggest mistakes that beginners do when setting up their store is having no concrete plan. First, decide on a category or subcategory and then sell items only related to your own niche.
Selling everything you can lay your hands on will reduce the authority of your store and create long-term issues when you decide to scale up. Work on creating a brand first and decide on what you want to sell.
Decide on a brand name and logo that will reflect your store’s purpose. You can also create a professional website and hire a photographer to appear more premium and attract customers.
2. Register as Seller
Create an account, add a payment option. Seller limits. Create an account on eBay and register as a seller. Add in a preferred payment method, fill out the other details and you are ready to go.
In the beginning, you may have some seller limits like 10 listings per month but this will gradually reduce when your store begins to grow. You can also opt for a suitable subscription to unlock more benefits and lower fees.
3. Set Up Your Dropshipping Store Policies
When your store begins to grow, it’s imperative that you set up store policies to avoid legal troubles and have a professional baseline for your business.
The store policies option will not appear automatically, instead, you will need to go Business Policies page on eBay, choose “Opt-In”, and click on “Get Started”.
Now you can find the “Business Policies” option in Account Settings. You need to fill out create three policies:
- Payment Policy
- Returns Policy
- Shipping Policy
Hire a professional if you have no idea what you are doing. Users with malicious intent can exploit the mistakes in your policies so be sure to create well-rounded policies with no loopholes.
4. Expand Your Team
You won’t be able to manage everything yourself, once things start going. Don’t be afraid to hire additional people to help you out.
Remember you can’t do everything yourself and if you are constantly under workload, you may neglect customer satisfaction and end up receiving negative reviews. Once you are ready to take things to the next level, create a professional customer service point, set up a chain of command, and start looking at the macro instead of the micro.
Create Business Goals
Creating goals is always important if you want to keep progressing and take your business to the next level. Goals give you something to chase and can help you make the right decisions to grow your business. As your business grows, you can regularly manage and tweak your goals to better reflect the direction in which you want to go.
A popular goal that you can adopt is the 70-700 goal. According to this, you should aim for 700 listings with a $70 average price. Set up at least 10% profits on your sales and choose your products according to these criteria. After that aim for a 70% sell-through rate and enjoy your profits.
Using a Powerful Analytics Tool To Find High Ticket Items
In this modern digital world, having powerful business and analytics tools at your disposal can be a game-changer. These tools will not only give you a detailed analysis of the products you are about to sell but also gives in-depth information about your competitors. ZIK Analytics has some unique features that come in handy when you are setting up your high-ticket store. The software has an easy-to-use interface and can automate complicated, time-consuming tasks.
1. Researching a Product
ZIK Analytics’ dynamic product research feature allows you to quickly get a detailed summary of an item. You can customize the tool according to your preferences like setting a specific price range, listing type, condition, and more.
To get a tailored report we suggest you choose the appropriate shipping location and supplier in “Quick Settings”. Use the search bar to search for your product and you will receive a detailed summary instantly. This data includes the product sell-though-rate, average price, earnings, successful sales, and more.
2. Analyzing your Competitors
The product research page also brings forth a list of all the sellers that cell the specified product. You can choose any seller from this list and instantly get a detailed report. You can see your competitor’s sell-through rate, total listings, earnings, feedback score, and more.
By researching your competitors you can figure out how to proceed in your business and what steps are necessary to make successful sales. E.g. depending on your competitor’s listings, you can increase or decrease your own listings. You can also work on improving your feedback and sell-through rate.
3. Using a Winning Criteria
Using all the information you found from the previous steps, you can now go to a supplier’s website like Walmart or Alibaba (depending on local or international suppliers) and order the item. You will have a clear idea of the products that have high sell-through rates and were successfully sold by your competitors.
Popular High-Ticket Suppliers
Walmart is easily the best, most accessible dropshipping store in the world. With over 500 billion dollars in revenue (in 2022), Walmart has taken over the wholesale business scene. The store offers incredible deals, year-long discounts, and a huge catalog of products to cater to every need. Walmart also has great policies, customer support and is known for being a reliable supplier.
Amazon is a great all-around supplier and a multinational company that provides everyday items as well as wholesale packages at decent pricing. As one of the largest, tech companies in the world Amazon is constantly focusing on improving its service, offering incredibly fast delivery and great customer service.
The company’s online website has an easy-to-use interface which makes finding products very simple. If you are in search of a rare item or a retro piece chances are you will find it on Amazon.
The Home Depot
If you are looking forward to launching a home-improvement store then choosing Home Depot as your supplier might be the best option. As one of the largest retailers and multinational companies in the world, Home Depot has been revolutionizing the home-improvement industry.
In 2022 alone, thousands of new sellers have benefitted from Home Depot’s reliable policies and launched successful, high-paying businesses. Whether you want to sell drill machines and construction tools or kitchen appliances and electronics, Home Depot has everything you will need.
Alibaba is a popular Chinese company founded by the billionaire Jack Ma. The company has been regularly making waves in the tech world with new e-commerce solutions and technological advances. If you are looking for a cheap, international supplier then Alibaba is your ultimate option. The company offers a ton of products at great prices.
Stand Out From the Crowd
Even though you don’t have to make a large number of sales (like low-ticket dropshipping), having a competitive edge goes a long way in securing those first few sales. You can’t rely on impulse shopping and rigorous marketing to sell your high-ticket product.
Instead, focus on creating a listing that stands out from others and speaks for itself.
1. Work on your Listing
Remember, most times, the customer will only choose one product from the pool of sellers. Make sure your listing is well-prepared, has high-quality images, a competitive price, and an excellent description. You can also add bundles, discounts, or other features to your listing but make sure you don’t reduce your profits.
2. Don’t Undercut your Profits
While it may seem tempting to undersell and get that first sale, this is not a successful, long-term business model. Keep your product margins decent and always choose products that can bring you sales without affecting your profits.
4. Go with your Gut
Believe in your listing. Don’t be afraid to list your product in a competitive market if you genuinely believe in your product and have a competitive edge over the others. The risk may seem high at first but you will also receive a high reward if the sale goes through.
Similarly, know when to hold back. If you feel that your product will get lost in the list and doesn’t offer anything different, don’t choose the product and instead go for something else that has potential.
How to Choose your Next Big Product
As you may have realized by now, you cannot choose just any other high-ticket product for your new business. A lot of thought goes into which product you choose. Before you invest in a product you must first calculate the profits you will be making, research the competition, determine your marketing strategies and learn about your customer base.
If you are sure the product has long-term potential, high demand, and can bring you decent profits, then and only then choose the product. Below are some ways you can figure out your next high-ticket product.
Sell What You Love
One of the easiest ways to start a successful eBay dropshipping store is to sell what you love. Selling what you are passionate about gives you a competitive edge as you know more about the product and wouldn’t mind going the extra mile to market your product.
You will also be thinking about various creative ways to package your products and coming up with new features that will attract customers. You won’t have to do a lot of research as most ideas will come naturally to you. However, selling what you love is a double-edged weapon.
When to Avoid Your Favorite Product
Your favorite product might not always be the best one to sell. It may have a lot of competition, low profits, difficult shipping, or any other problem. Many beginner sellers choose to ignore these issues as they are dead set on selling their favorite products but end up facing serious consequences later.
Identify an Underrated Niche
Remember when you are trying to sell high-ticket items you should be looking at a small group of interested customers instead of high-paying customers instead of a large group of customers who wouldn’t want to spend money.
Identifying an underrated niche allows you to tap into a market with customers who wouldn’t mind spending a large sum of money on their favorite products. E.g. Not everyone loves Pokemon cards.
Many people find them childish and useless hunks of cardboard. However, those who are passionate about shiny, nostalgic cards will spend hundreds of dollars to get their favorite cards.
Check Amazon and Other Sites
One of the easiest ways to identify a trend and determine what’s selling best is to go on Amazon or other shopping sites. You don’t have to reinvent the wheels, sometimes the answer is right in front of you.
Go to a shopping site and look around for what’s popular. Research the product, look at your competitors, figure out if there is a gap in the market that you can fill, and then choose the product for your next business venture.
Meet a Demand
Another great way of having instant success in your eBay business is to identify demand. Even in this new day and age, several business opportunities have not yet been saturated.
E.g. delivering a product to an area where other competitors don’t deliver or offering lower prices in areas where products are generally expensive. The possibilities are endless and you will have to be a little creative to find the right idea.
Target High-Paying Businesses
If you are still having trouble finding a decent high-ticket product for your store, try changing your customer base. The problem might be with the people you are trying to target. Most times the general public wouldn’t want to spend large sums of money on semi-essential products.
In these cases, you can try to target businesses. Find products that will be useful to a business and then market them accordingly. For E.g. a hydraulic jack will be useful to a car repair shop and less useful to the average consumer.
Confirm with Google Trends
You don’t always have to do a great deal of research to find a potential niche. Try brainstorming instead and creating a list of items that you may want to sell. Then go on to Google Trends and check if the item is popular. Avoid products with declining graphs and low demands.
Google Trends can be a great way to research all your other products too. It gives you a new perspective on your item with system-backed data.
Marketing Your Products
Your store is all set up now, but how do you get customers to order your products? Although marketing is not always necessary, it is a great way to get your product out there if your listing is not doing well.
Below are some of the ways you can market your eBay products.
Promoted Listings work similarly to Google PPC. By paying a small fee, you can push your listing to the top of the page. This is the main feature sellers use to rank their items on the top and boost their sales.
It is important to note that a “Sponsered” tag will appear alongside any listing that you promote. One great thing about eBay listings is that you only have to pay if your item sells after 30 days of someone clicking on the listing.
Many big brands can also work with eBay to get a more hands-down and in-depth marketing strategy. This option only exists for large businesses that can afford a costly marketing campaign.
If you feel like you could benefit from eBay’s branding solutions then get in touch with eBay’s team to learn more about this feature.
Another marketing feature that isn’t directly available on your eBay profile is “Display Ads”. If you have ever seen a banner appear at the right side of your eBay feed then you have already experienced Display Ads in action.
Display Ads take a more generalized turn and instead of boosting your listing on a certain search results page, it runs your ad on an entire category.
For example, if a user is browsing items in a certain category then your display ad will appear in a dedicated section on the page just like a Google Ad. Again, you will need to get in touch with eBay to discuss this option.
Search Engine Optimization
SEO is a popular term used when trying to rank a webpage higher in Google results. You can use the same concepts to rank your listings higher on eBay.
There is no rocket science involved with this method and it does not show instant results like Display Ads or Promoted Listings. Think of this as an organic (no fees) way to rank your listing. Some common SEO practices include:
- Researching for popular keywords related to your item than adding them to your listing.
- Optimize your title and description by adding keywords depending on what users are searching.
- Seeing what your competitors are doing to rank higher and then adding those features to your own listing.
Affiliate Marketing is a great strategy to promote your eBay shipping store. In affiliate marketing, you pay a blogger or website to link your eBay store in an article.
You can work with an affiliate marketing agency to write an article that promotes your eBay store. Make sure you keep the following points in mind.
- Affiliate Marketing rates are not fixed. Each person/company will have their own rates so you have to keep both the price and value in mind when making a decision.
- Make sure the website you choose is relevant to your product. E.g. you cannot promote a land mower on a golf blog site.
- Make sure the website you choose gets decent, regular traffic every month.
Finally, don’t be stuck on a single marketing strategy. Keep checking your statistics like impressions, clicks, and products sold to see what strategies are working best for you. Depending on your stats, you can choose to make adjustments to your listings and take a different marketing approach.
We are glad you made it this far. You now have all the information you will need to successfully launch and manage your new high-ticket business. We know starting a business can be tough but it is important to not get overwhelmed with all the fuss and focus on what’s necessary.
We advise you to focus on finding a decent seller and a killer product before diving into complex strategies and marketing techniques. Also, be sure to carefully read the pros and cons so you know what to expect. That’s all we had for this article. Stay tuned for more!