Hello, everybody. Anton Kraly here and welcome back to the eCommerce Lifestyle Podcast. This is our biweekly show that's designed to help eCommerce store owners to increase their revenue, automate their operations, and become the authority in their niche. Now, today, we're going to be talking about a topic I typically stay away from, and that is low-ticket drop shipping, selling inexpensive products online with the Drop Ship Lifestyle business model.
Now, believe it or not, it actually is possible to make money with low-ticket drop shipping, but you need to do it the right way. What most people do is start trying to sell inexpensive products, get a bunch of sales, and realize there's no money to be made. In fact, at my company, Drop Ship Lifestyle, where we help people build highly profitable semi-automated stores, we get messages all the time. For example, Dom, he said, "Just got the Drop Ship Blueprint. Super excited to start the journey. I've been in eCom for a while, and I had a store.
Sold about 12K, $12,000 in a couple months, but it was all with AliExpress and print on demand," both inexpensive things to get into. He said, "No real profit from the low-ticket items I was selling. Looking forward to working with real suppliers." It makes sense, because it took tons of sales for him to get to $12,000, and there was no margin leftover. Take that, compare it to somebody like David, remember a Drop Ship Lifestyle, who said, "This just came in. So dope. Month two." In 24 hours, he had three orders for $12,120.
Three sales in 24 hours that were worth more in revenue and profit than Dom had in months of doing low-ticket drop shipping. Now, I'm obviously not saying this to bash on Dom or anybody out there that is drop shipping low-ticket products. I'm sharing this because it's important to know that there is a better way. With that being said, that's not what this episode is about. This episode is about how to do low-ticket drop shipping right, how you could still make money if you want to drop ship low-ticket products. Again, watch the whole video.
Don't just take that, turn this video off and go start doing print on demand or drop ship from China. Please. Let me just do this example. I'll pull up the digital whiteboard for everybody watching the video version of this. For everybody that's listening, I'll walk you through it. But let's just say you decided to build your store and it was a low-ticket store because you simply didn't know any better or maybe you just thought it was less risky. You built a low-ticket store, again, meaning selling inexpensive items.
To me, that means anything under $200. I'm just going to pick an item that I have in front of me to give an example. Let's say you decided your niche was going to be headphone stands. People can put them on their desk. They can hang their headphones up, and they can have their headphones not laying around getting dirty on their desk. You built your headphone stand store, and I'll try to draw it. It's going to look terrible, but there it is. These things you sell for about $25 on average. People go to your store, they can add to cart, and you will get $25.
You'll have your cost of goods sold, then you'll have to pay for shipping, if you offer free shipping. You have to pay for ads and maybe you'll make five bucks. Not going to get rich that way, at least not anytime soon. That would be the low-ticket store. Now, let's look at a high-ticket store and, trust me, that's not how to make money with low-ticket drop shipping. I'm going to show you how that's not it. That's just how people traditionally do it. But let's say you then decided to build another store and it was going to be a high-ticket store.
Again, to me, that means average order value of at least $200. Now, on this store, again, we're going to pick a product that I have right in front of me, and we're going to go with headphones, higher quality headphones. By the way, I don't recommend drop shipping electronics. This is just for illustrative purposes, something that's right here that I can show you and demonstrate. On the second store, the high-ticket store, you decide to sell the actual headphones, and you sell high-end ones, premium ones for studio monitoring.
Let's just say your average order value Is $300. On that store, every time you'll get a sale, you'll get $300, and then you pay your cost of goods sold. You pay your ad expenses. You pay for shipping, if you offer free shipping, and maybe you make a hundred dollars, $80 net profit, much better than the five from the headphone stands. You're probably like, "Anton, all you just described to us was why high-ticket drop shipping is better than low-ticket drop shipping.
That's not the purpose of this episode," and you're right and that's true, but I want to show you how you can incorporate low-ticket products on the drop ship model to increase your conversion rates and to make more money. What you would have done on the low-ticket store in this example where you were selling the headphone stands, what you can do on your high-ticket store is offer them as cross-sells.
What you will do on your product page is when people are looking at their headphones in this example and they're about to click add to cart, you can show plus and I'll just put stand, and you can do it for $25. Now, why are you going to do this? How are you going to drop ship it? We'll cover that in just a minute, but I just want to show, again, for everybody watching what I have done every time I buy a new pair of headphones. Here, like the Apple ones, I bought a stand for them.
I bought the Microsoft Studio headphones to use with my Microsoft Studio, and I bought another headphone stand. This is the purpose. This is the point. These are things that people actually want, they're low-ticket items, in a related niche, in this example, to headphones, that people actually want, that people are actually going out and buying. I think I have three of these setups in the studio. And then at my home office, I have two more with different headphones. Yeah, I spend way too much money on tech, but whatever. That's what I like to buy. Not the point.
The point is that when you see opportunity within your niche for low-ticket products that would, one, benefit your customer because they're probably going to want it anyway, and two, they're going to increase your conversion rate because, again, people that are thinking, "Oh, I can quickly add the stands I wanted," good, more likely to buy, and three, are going to increase your bottom line, because when they buy, you're going to make money on this additional sale, the thing that the customer also bought, that again, increases your average order value and your net profit, because it's just more profit on more products.
Couple keys here. One of them is that the low-ticket products on your store you don't want to sell as standalone products. You don't want them to have their own product pages. You don't want to run ads to them. You want them to only be available on your store as cross-sells, as things people can add on as they're checking out. That is where the real money is made. That is where the real benefits are going to come from. Second thing you should know is that these products should also be drop shipped.
Now, the best way to do this is to have them drop shipped from the same suppliers that make the product you're selling. Let's just say, again, you wouldn't be selling electronics and you wouldn't be selling for brand names, but for the sake of illustrative purposes, let's say you were selling Microsoft Surface Headphones, and they also offered a stand. What you would want to do on your Surface Headphones page is offer their stand as the cross-sell, the thing they can add on to their order, the thing that you can make more money on.
Same thing, if you were selling Apple headphones on that same store, which, again, you wouldn't, just want to have this clear, you would have the Apple headphone stand on that page for people to add. And that wouldn't be a low-ticket. That would probably be a $500 headphone stand from Apple. But I hope you get the point. If you do, definitely let me know by leaving a comment below. I'll give you one more quick tip on how to do low-ticket drop shipping the right way, which still is not building a low-ticket drop shipping store.
But the other way you could do it is have different promotions on your store, so whatever niche you're in, where once a month you're doing something different. It could be a percentage off promotion. It could be a buy one, get one free, or it could be a promotion where if you buy... We'll just stick with our example here. If you buy these headphones, you get a free stand for this week of the month. That's the promotion, and you're still drop shipping the low-ticket product.
But in that case, you're offering it for free simply as a way to increase conversions, to turn more visitors into buyers. I've tried low-ticket drop shipping many different ways. My first ever store was actually drop shipping cookies from a bakery in New York that I had a delivery route for. Long story. Maybe I'll tell it another day, but there's not much money to be made when every sale you get is for a low price.
Anton Kraly:The money to be made is when the low-ticket products can either increase your conversion rate or increase your average order value and still be dropped shipped, again, ideally by the same supplier that the product is coming from. That's going to do it for today's episode, guys. As always, I hope you got value. If you did, give it a like, click subscribe, and be sure to tune in on Monday for the next episode of the eCommerce Lifestyle Podcast.
Also, for everybody listening out there that is new, that wants to know how we build highly profitable semi-automated stores, be sure to go to dropshipwebinar.com, D-R-O-P-S-H-I-Pwebinar.com, where you can get a free three hour training from me, a list of 237 profitable products to sell online, and a special offer on the award-winning Drop Ship Blueprint. Check that out. Link in description. Thank you, everybody. I appreciate you, and I'll talk to you on Monday for the next episode of the podcast. See you, everybody.