Whether you view dropshipping as a side hustle or your main source of income, you need to have the right attitude and courage to make it work for you.
This means learning all about dropshipping as a business model, including understanding the different types of dropshipping businesses and dropshipping client profiles available.
For instance, you need to choose between high-ticket dropshipping and low-ticket dropshipping. High-ticket dropshipping involves selling high-price dropshipping items that offer high value to clients, while low-ticket dropshipping involves selling common and inexpensive products. If you want to dropship luxury brands, you should choose the high-ticket client profile.
Let’s start with a look at the basics of dropshipping.
Dropshipping is a type of online business a retailer sells products without having a physical store or stock. As a dropshipper, you accept orders from customers and transfer them to your suppliers or manufacturers for fulfillment. The supplier is responsible for processing the orders and shipping the products to customers.
This means that you, as the retailer, aren’t responsible for product storage, packaging, and shipment. When it comes to setting your profit margin, you have the liberty to set your preferred price. However, this doesn’t absolve you from the responsibility of ensuring that your customers receive their orders in one piece and on time.
Nevertheless, ensure that the price you set on each product lines up with the value of the product–if your prices are too exorbitant, they’ll scare away potential customers.
Your profit margin for dropshipping should be determined mainly by the type of product you’re selling and your target customer. For instance, if you’re selling a high-ticket product from a luxury brand, you can expect higher profit margins because the sales process for those items is typically more involved.
In other words, the more you have to work for a sale, the more you need to earn from that sale to get it to pencil out.
Luxury brands are products that are considered to be of high value and quality. These products are also known to be rare, aesthetically appealing, extraordinary, and expensive. They have a very high degree of non-functional association.
Luxury brands can be found in almost every sector, including fashion, automotive, sports, home, and more. Many factors can make a brand luxurious, but the main one is its exclusivity–while luxury brands are of high quality, the same quality can be attained by other premium brands that aren’t necessarily luxury.
It’s also important to remember that luxury brands are not just about the actual value of products. Sure, a diamond ring is a luxury item. But Gucci can get away with selling t-shirts for $500 because luxury is also about perceived value.
So, when you’re picking high-ticket items, take into account what your target audience is willing to pay.
Furthermore, these premium brands are readily available to anyone with the required financial muscle to purchase them. However, luxury brands aren’t readily available to everyone, nor do they target the masses. So, even at such exorbitant prices, luxury products are still not readily available.
Their scarcity is very important for marketing because you can easily persuade potential clients to purchase the item. Most high-ticket clients are willing to spend a significant amount of money on an item that’s scarce and exclusive to them; this allows you to set the price of the product higher so that you can make more profit.
The extremely high-profit margins on luxury products have motivated many people to venture into the luxury brands dropshipping business. Without a doubt, dropshipping luxury items is one of the easiest ways to make good money within a short time if you play your cards right. However, there are several important things you need to understand before you start.
For instance, you should start by seeking permission from the brand to dropship their products; many luxury brands only allow authorized sellers to dropship their products because they have a reputation to protect. So, you must seek their consent and ideally partner with them to dropship their products, especially when it comes to top luxury brands.
However, the less-known luxury brands may not have a problem with you dropshipping their products, provided you follow their reselling policy. If you find suppliers who allow you to dropship items from the most popular luxury brands, approach them with caution because they could be scamming you. Once you have permission to dropship luxury products, the next step is to create an e-commerce presence and start marketing your items.
Lastly, while most popular luxury brands are highly unlikely to allow you to dropship their products, there are still many top luxury brands that are willing to partner with you for a dropshipping program.