6 Reasons To NEVER Dropship Low Ticket Items In 2023.
Top 6 Reasons To NEVER Dropship Low Ticket Items.
In this post, I want to cover why drop shipping low ticket items is not the best way to move forward. They are called ‘low ticket’ because they do not have a high wholesale price point.
However here is the problem, it is very easy for wholesalers to create margins with these products that suit themselves, but it is hard for retailers to make these margins work and make a decent profit.
Drop shipping low ticket items can be tempting. You don't have to buy the product upfront, you just have to pay for it when someone buys it. But there are several reasons why this tactic is not a very good idea.
It literally takes just as much energy to sell a $4 product as it does to sell a $400 product. When your business is new and you haven't generated much traffic, your conversion rates will be low, which means that the number of products you need to sell in order to make enough profit won't really make sense for this type of business.
This is the number 1 reason why most drop shipping stores fail within 6 months, so with that said let dig a little deeper and I'll share my top 6 reasons not to dropship low ticket items.
1. The margins are too small
Drop shipping low ticket items typically only cost $5 - $40 or so each, so your profit per item is relatively small. This means you have to sell hundreds maybe thousands of items in order to make a decent profit.
Running a business takes funds and the sooner you can start turning a profit the more time you'll have to build your business. So if you're going to do a dropshipping business then it's highly recommended that you do it on products that sell for at least $200 or more.
2. Low quality products
A lot of products sold through dropshipping low ticket items are NOT high quality. The companies selling these items know that they don't really have much to lose if you send them back, so they can sell $5-$40 items that are of very poor quality usually out of China with little or no quality control.
Furthermore, if you're selling a low quality product, your customers will be less likely to buy from you again, so this is a very bad for your long term growth and profits. See this blog for great niche ideas.
3. Personalized service won't be as high as you expect it to be
When you're selling a $200 - $2000 item, you have time to invest in high level support, answering their questions and providing good customer service. This can be achieved because you are actually MAKING money with fewer sales.
But when you are selling low ticket items for $5-$40 or so, you will have to sell hundreds maybe even thousands of items just to make a small profit and you don't have the time or reach to offer any level of customer service at all.
[QUICK NOTE] If you would like to learn more about drop shipping in Australia check out our FREE Australian dropship training where we share with you step by step how to get started today!!
4. Dealing with lots of returns
One of the biggest problems with selling low ticket items is that you will find yourself dealing with a lot of returns. This is because people WILL expect you to give them a decent product and if they don't get it then they will return the item for full refund.
So, if you're dealing with cheap low quality products then this is actually exactly what is going to happen to you week in week out, because your customers will not feel like they got what they paid for.
5. The competition is fierce
Imagine that you're selling a $5 item out of China, then there are probably 10000 other people doing the same thing. You might get lucky and be able to sell a few here and there, but it's very unlikely that you're going to grow much because you're fighting against at least 10000 competitors. This is why most drop shipping businesses fail within 6 months.
If its easy for you to get started it means it's easy for others to get started, and since everybody is selling the same thing, there's only one thing that happens at that point which is a price matching war where nobody makes any money.
6. Long shipping times
One of the most important things to think about when dropshipping low ticket products is that you're going to have to ship them internationally (3-6 weeks), and it's going to take a long time to deliver customers products. This means that your cancellations, returns and refunds are going to be a nightmare and will probably always be a nightmare.
So, if you're planning on selling low ticket items then I highly recommend that you do NOT use drop shipping for this type of business, because it's really not worth the time, energy and hassle.
In Closing
Drop shipping low ticket items is easy to get started with, however it's really not the best way to start your business. So, if you're planning on doing a dropshipping business then it would be highly recommended that you do NOT sell any products that are less than $200 or so.
High ticket drop shipping just has so much more upside to it, so don't be tempted by what seems to be the ease to get started and the "fast start" that is low ticket drop shipping.
Hope you got some insight from this post, again if you would like more info on high ticket drop shipping in Australia we go into depth here in our FREE Australian dropship training. Check it out, you will get a ton of value and actionable steps to get you started.
