High Ticket Dropshipping
Lets learn all about High Ticket Dropshipping with incites from one of the kings of high ticket dropshipping, Anton Kraly.
So in this post we cover all the secrets of high ticket drop shipping.
Let’s get to it, drop shipping and how to dropship high ticket items. I love the concept of high ticket eCommerce and don’t let it blind you, I believe that whether you choose a dropshipping approach to your business or more of a standard ecommerce approach there are a lot of concepts we will cover in this article that will help anyone generate revenue online, including staying competitive in eCommerce.
So with regards to high ticket drop shipping where do you start? And what’s the secret?
Anton, wouldn’t say it’s a secret, it’s just that it’s not what most people think of when you think about eCommerce and especially when people think of drop shipping. In fact if you asked people that are familiar with the term, what is drop shipping, they would most likely say, “Oh, it’s going on Ali express and finding stuff from China and then making a Facebook ads and listing in on Shopify and, you know, trying to make these viral ads.”
Anton then mentioned that “What we do is not anything near that” and I will be honest if this was the approach he recommended he would not have been invited on the show as a guest. Not only does this not work for any sort of long term strategy, but it’s really just a short term hustle with a short minded approach. Don’t get me wrong, it can work as a short term gains, but this is not what we are here to discuss. This is eCommerce Allstars so we talk about what’s going to work, to build a proper eCommerce business, and in this case we specifically are talking about making a viable business out of the high ticket ecommerce & high ticket drop shipping business model.
The reason he called his business drop ship lifestyles was so that people could find them, but the secret is that he considered his company and his students consider their companies as internet retailers who use and work with suppliers who will drop ship items.
So let’s say you wanted to build a store and sell stand up desks, the first step would be to go online and find every company that makes quality standup desks, then reach-out directly to those companies personally. A very rough cold call script might be:
Hi its [Name] from [Name-standupdesks.com]
I would love to speak to someone about opening an account with your company.
High ticket ecommerce VS High ticket dropshipping – Whats the difference?
The point of what your doing with dropshipping and where the strategy varies a little from other eCommerce business models, like high ticket ecommerce as opposed to dropshipping is. Your not trying to private label anything and not trying to dropship from China; You’re trying to find quality brands that already make great products and trying to become one of their retailers. If you are good at what you do perhaps you can grow to becoming one of their best retailers. Its an excellent way to ensure consistency in the product that is being produced without needing to worry about a lot of the supply chain issues, from production to shipping. Also you are representing a brand that people already know about.
Its like if you go into a Best Buy and you wanted to buy a TV, your not going in the store to look at the Best Buy branded TV, your going to buy a Sony or Samsung or other branded unit so this is a similar approach, you are not in the business of making your own products but rather you are an internet retailer.
You’re job in the dropshipping model then becomes one of getting people to your online store, turning them into customers then your suppliers, these brands, are responsible for fulfilling the orders.
You can circumvent the order fulfilment portion of your high ticket eCommerce business as well through various integrated options with ecommerce fulfillment centers. If this is an option you would prefer to explore or need help with, let me know.
I have had one of the coaches dropshipping lifestyleJeff on eCommerce Allstars as well, he expanded a lot on how to choose the suppliers, and marketing tips and advice for the high ticket drop shipping. So if your interested he is a dropshipping expert you certainly should have a listen to.
The process of choosing the right dropshippers is very research heavy because don’t forget they represent a large part of your business, especially in the dropshipping game because not only does the product have their brand on it, BUT once the purchase is made the order is shipped and fulfilled by them. So if they ship a high ticket product and it arrives later than expected, or damaged this reflects on your business more than that of the dropshipper. It was you who the purchaser bought from. So as you will hear in the interview with Jeff, he spends a lot of time selecting the right dropshippers. Also, don’t forget when you are retailing other people’s products there are things like pricing that needs to be upheld and this in large part is up to your suppliers as well.
To this point Anton adds, “It’s very research heavy what we do. It’s not like, trying to find one thing that just takes off… Most of what we do is trying to find great products and doing a ton of market research because, you know, making sales is one thing, but making sales profitably is what we want.”
The way it typically works is best illustrated with an example, so let’s keep the standup desk example.
If you researched that industry and found 20 brands, then you get approved to sell for 20 brands, GREAT! Of those 20 brands, your going to see 80% of your sales coming from 20% of these companies. So it really comes down to trying to find who those winners are, who has the best quality product, who sells the one that people actually want, and then working to have an excellent relationship with them. It’s also referred to as the 80/20 rule and an example of a situation to which it definitely applies.
So how do you stay competitive in the high ticket drop shipping game?
One of the important parts to staying competitive starts in the research stage. You have to look and see what policies they have in place. You want to be able to build a high ticket dropshipping business that can sell the product at a fair price, make a profit, and keep your customers happy. So you have to make sure that their policies align with your business practices. One of the things that can keep you competitive when it comes to policies and suppliers is known as MAP.
Minimum Advertised Price, so basically if I sold for company ABC and then you sold for company ABC when we both got approved to sell for them, one of the things we would sign is that map agreement. So if they said the minimum price of this desk is $1,000, then I probably listed at a thousand and so would you. The key to stay competitive is the ability to lock in your profits, and according to Andrew, “That is a key right there as far as locking in profit.” I would add, that there are a lot of suppliers that have MAP’s but there are also a number of them without the resources to enforce these MAPs. So you need to make sure that these MAPs are being honored. If not and its still a supplier or industry you want to explore there is an awesome podcast we did a while back that was built around the eCommerce wholesaleing strategy and essentially becoming the primary online seller for various suppliers. This is an entirly different approach, but an interesting one non the less.
The reason a lot of people fail in dropshipping and high ticket dropshipping in particular is they’ll go on Google and look for drop ship suppliers and they’ll find the companies like Doba who are involved in worldwide brands. A lot of these companies connect you with a middleman, their distributor, so they don’t have pricing controls and margins are then reduced further because of what I would call the double middleman syndrome.
Worst of all you could find a lot of the products for cheaper if you just go on eBay or Amazon. So this goes back to the point earlier, that it’s important to have a direct relationship with your suppliers. Really good suppliers that enforce map policies, not just that have them, but that actually enforce them. Those are the type of suppliers you want to work with.
So then it comes to competing and staying relevant, it’s crazy because there are stores that have been around for 10 years and more, online stores that now are hurting, and it’s not because more people are selling, it’s because they are losing touch with their customers.
The retailers who are not staying on top of their customers and their industry is the quickest way to lose and the quickest way for YOU to gain a competitive edge. “One of the biggest ways I think to get an edge over the competition is to look for all opportunities at product levels,” says Anton.
So let’s return to the idea of the standup desks. Let’s say again that there are 20 different brands that make the desks under $1000, and I do what is required to find out who the top 20% of those brands were, and now we are approved with them. NOW, I also want to know about the other 3000 SKUs that I now have access to.
What are the ones that have the least competition?
To find this, you have to look no further than Google Shopping, and google product listing ads. “That’s our biggest source of traffic, our highest converting source of traffic.” Says Anton.
When you go on Google and you type in any product name, or SKU numbers, it will show you right in the search results how many stores are selling it. If I find that 20 stores are selling the product I’m researching, then I am not about to pay to advertise this product, because there’s too much competition on this product, and I can do better. So then you keep researching that company and find it has two new desks that came out this year and it says they’re being sold from two stores, In Antons words “I’m going to bid on that all day.”
The same thing applies when your researching other brands, look for less than 10 stores on Google product listing ads, and that where I am investing in getting approved.
How to Stay Competitive in Dropshipping by being a first mover.
So a lot of different kinds of companies we work with, every year or sometimes every quarter or every season depedning on the industry either discontinue some of their products or introduce new products. Maybe last year or they had a Stand up desk model in Walnut wood and now they just came out with one in Birchwood. What a lot of online retailers do is get lazy, they have products on their website and they’re not looking to see what’s new, what’s trending. They’re not updating their product feeds…
This can be automated, so reachout to me if you want to explore more about product feeds. If you just want to talk about ways to streamline operations reachout to me now!
They’re not updating their product pages, they’re not making new ones. So a lot of opportunity comes when you are a first mover. So either with, whether it’s you as the business owner or an assistant, someone on the team has to always be looking for those new opportunities so that they’re not advertising products that maybe are dwindling in stock or that no one’s searching for, but so you have the newest thing first.
That makes sense. I mean, in some cases, being the first mover isn’t always the best strategy, but in this case, it’s a definite winning strategy. It’s one thing that you need to always be on top of, but then even beyond that, “every two weeks we’ll do a full audit of all of our ad accounts”. – Anton
We look at them daily, but every couple of weeks we’ll look to see if there were any drastic changes, because again, in high ticket dropshipping things can change fast. Let’s just say that there’s five companies selling the same desk and everybody is selling it for the $1000 MAP price. On average you sell, two of them a week, and then all of a sudden a month goes by and you don’t sell any.
Why is that?
It could be because one of the five competitors decided to make their price $900 and that’s what everybody’s seeing on Google shopping, and they’re getting all the clicks and all the sales. So a lot of this, even when you’re up and running is staying on top of the business to make sure that everybody really is adhering to the policies.
But if you don’t do things like that, you could have a business that’s growing or steady even and then all of a sudden declines because you’re not staying on top of not just your own website and your own suppliers, but your competitors. It’s funny because I have always been more about doing what I do and doing it well, and saying forget about the competition, but in eCommerce and especially high ticket dropshipping it’s imperative to stay on top of your competitors.
So another big thing to focus on is always identifying.
Depending on the size of the industry, make sure you identify your top three to five competitors audit their websites, look for things like:
- If they’re using anything special as bonus gifts.
- If they’re doing any weird type of deep discounts or free expedited shipping or whatever it may be.
Staying on top of those people is very important because when you’re inolved in high tiket dropshipping you will have competition, so you have to make sure you know what they’re doing.
People often hear the term dropshipping or high ticket dropshipping and they think it’s an easy way to make money. They can be hands off, as long as they get people to their website. But it’s not the case, to do it right it requires dedication, and a lot of front loaded efforts in particular it’s a full fledged business so don’t think you can go into it with a half baked attitude.
Its an excellent model, and if you need some technical expertise in getting this model up and running, integrating with suppliers warehouses etc, just let me know and I can help you out.
So to recap in order to stay competitive in high ticket dropshipping you need to know exactly what your competitors are doing and stay relevant, and really by getting the one up on them early. If you know, whatever they’re doing it, that’s great, but it doesn’t mean just waiting for them to do something better than you. You should be the one doing things better first.
So maybe you’re the one that offers free expedited shipping and it costs you an extra 50 bucks, if your the one getting all the extra sales it’s a simple no brainer, to making your price a little bit more attractive.
Maybe it’s maybe it’s not even price oriented. There’s so many different things you can do out there to, to win the client over the competition. From simple to complex, something as simple as having a phone number that your customers can call, and actually answering those calls, can make sales over the competition any day of the week, particularly true in the high ticket dropshipping and high ticket eCommerce game.
“If you’re really gonna do this, if you’re really going to build a business, then don’t start unless you are going to see it through and make it work… Iit sounds easy and honestly, the concepts are simple, and works. And if you’re not willing to put in real work, at least up front to get things going, it’s just going to be a waste of time. So make the commitment. If you want to do it and then get results, you’ll make it happen.” – Anton’s words
Links:
Website: To Build a Highly Profitable, Semi-Automated, Drop Ship Store
Twitter: @AKraly
Facebook: Dropship Liefstyle
Instagram: Dropship Liefstyle
