High ticket dropshipping is a business model that allows you to generate handsome profits from selling other manufacturer’s products online. For instance, franchising is a good example of high ticket dropping where you can contact the manufacturer directly to open an account and become an authorized dealer. However, to be profitable in this venture, there are different things that you should consider such as startup costs as well as choosing the right niche among others.
Read on to learn some truths about how high ticket dropshipping can be profitable and thriving as well.
Find The Best Niche
Dropshipping is a retail business that does not require you to keep any form of stock since the suppliers do that for you. When you are involved in this business, your major task is to market the product and process orders from different customers and the suppliers will then dispatch the orders to the respective customers. However, the success of this business strongly depends on the niche that you choose. Therefore, it is important to do some research on different products before you select your niche.
Is High Ticket Dropshipping Good For You?
Many people would like to know if high ticket drop shipping is a good idea before they venture into it. Though it comes with high-profit margins if you choose the right niche, the truth about this kind of business is that selling high-priced products is not as simple as many people think. You can read more here to get insight into different aspects that are involved in this business which can also affect your profitability. To get the anticipated profits, it also means that you need to have a huge budget to cover your advertising and marketing initiatives.
Fewer Upfront Costs Required
Rather than opening a physical store or creating your own product, there are many advantages to building a high-ticket drop shipping business. You need a credit card with a high limit credit line since you have access to a wide selection of products that also make scaling easy. You can achieve this by optimizing your product list.
High ticket drop shipping is a form of an e-commerce business that does not include high overhead costs like travel, marketing, and other office-related expenses. No inventory or warehousing is required as your supplier will do that for you. Additionally, you can select a flexible place to operate your business from as long as you have a reliable internet connection.
Downsides Of High Ticket Dropshipping
High ticket drop shipping has some disadvantages that you should also know before you decide to venture into this business. These often come in the form of standard operating procedures and you should have an idea about how to address them.
Inventory And Shipping Errors
Since you do not control any inventory because you are not involved in any form of warehousing which means that shipping errors are likely to occur at some point. You are also likely to encounter shipping problems since the supplier cannot do everything for you. When you are into high ticket drop shipping, you would not be connected to the supplier’s inventory, so you will not know what’s in stock. In some cases, the supplier will just send you a spreadsheet with inventory updates via email and in some cases, they do not send anything. You will only realize that a certain product is out of stock after customers have placed their orders. The other issue is that the supplier can send a wrong product which may not suit the needs of the customers. This can affect your relationship with your clients.
High ticket dropping business is also characterized by lower margins of around 10 – 30% compared to your own product which can have margins in the range of about 40-90%. Your net margin will also include shipping costs, fulfillment costs as well as advertising costs. Therefore, the truth is that margins in high ticket drop shipping mainly depend on the niche that you are specializing in. Though cost-effective, the main challenge of this business usually comes as a result of the fact that you are just operating as a retailer and you have no control over the product that you are selling.
As a newbie, you should know that high ticket drop shipping provides opportunities for generating more money if you manage to choose the right niche. However, this form of business comes with certain challenges since you do not control the product. You will only act as a retailer with little autonomy to control the product that you sell. Shipping and inventory challenges can also affect your business and you need to be wary of them so that you do not disappoint your customers.