The high price of selling low-ticket items

The high price of selling low-ticket items

Back in the day when I was in my retail/wholesale business, we had a chart that demonstrated the folly of discounting products*

The chart clearly demonstrated in numbers that the more you discount an item the more you had to sell to make the same profit.

Obvious really.

But here's the thing:

In our heads, we think “Mmm, 10% discount, that’s not much. It's just $10 off a $100 item right?”

Yes it is.

But, (and this depends on the profit margin-more on that later) you may well have to sell 50% more to make the same profit.

And arguably work at least 50% harder to get there.

Do you really want to work 50%, 75%, 100% …twice as hard?!

For perspective, work out how many free hours you have to build your business and then half them, just because you are in a low-ticket business.

Not great, is it?

Profit margins on low-ticket items, especially online, are considerably worse if you're a distributor which is why so many can’t make a living out of them despite the glowing stories and shiny cars.

If you are planning to get into a business where your goal is more freedom (time & money) and get to travel more, then think seriously about the opportunity before you leap in.

Are you willing to grind it out and sell perhaps hundreds of little things (with the accompanying communication and customer service) or just sell 2-3 high quality products to achieve the same result?

I know the path I’m on.

How about you?

*Sometimes you can strategically discount- loss leading- to attract customers: we've all seen that in sales “funnels” where an item starts at $19 and then you get upsold on the way to the cart