Sell big ticket items or inexpensive items?

It's Friday evening and I'm tired of working. Time for a rant... Today's topic: big ticket vs inexpensive items.

I've seen it said by several people on this forum that it's easier to make money selling expensive products than it is selling cheaper products. The "logic" usually goes like this:

The problem with the "logic" above (if you'll excuse my technical language) is that it's just plain stupid. In general, there is more demand for cheaper products than more expensive products (though this certainly isn't universally true). Thus for many -- probably most -- things, it would be easier to sell 2,000 $1 items than a single $1,000 item.

If you don't believe me, think about this example. If you were selling beverages, which company would you rather own: The Coca-Cola company selling $1 soft drinks and or Moët & Chandon selling Dom Pérignon champagne at $150 a pop? (Hint: Coca-Cola's 2013 revenue was $46.8 billion whereas Moët & Chandon's revenue was €1.2 billion.) Or if you were selling furniture would you rather own IKEA with it's $500 sofas or Restoration Hardware with $5,000 sofas? (Hint: IKEA's revenue was $28.5 billion; Restoration Hardware's was $1.1 billion).

Now I grant you that small online businesses targeting niche markets are different than multinational corporations. But still, there are plenty of advantages to selling smaller ticket items even if your revenue isn't in the billions:

• You'll likely grow your lists faster.
• Some affiliate programs (e.g., Amazon.com) give higher rates of return when you sell a larger quantity of items.
• You're more likely to get repeat sales selling smaller items. And with more sales, you'll earn more trust. With more trust, you'll get even more sales. Admittedly I have no data to support this contention, but I strongly feel that your ability to get repeat sales is a huge determiner in whether or not you'll be successful.
• Small sales help you get big sales. Having lots of small sales gives you lots of chances to upsell. Upselling from higher-end products is difficult at best. Moreover people who have already bought anything of any value from you are more likely to buy more expensive things from you than those who haven't. This last fact is a reason why some companies are willing to sell certain products at a loss (think Black Friday sales).
• It's the internet! For most things, it's not actually much (if any) more work to sell 1,000 things than just one thing. How much more effort does it take to have 1,000 people on your website than having 1 person on your website? How much more effort does it take to blast an email to a list of 1,000 (or 1,000,000) people versus a list of just 1 person? Now certainly there are some activities where increasing your customers will increase your workload. But I'd suggest that online at least, those are the exception and not the rule.

I'm not trying to say that it's always easier to sell lower priced items than more expensive items. For instance, in the example above, if you were targeting hedge fund managers, you probably really would make more money selling champagne and luxury furniture than Coke and cheap couches. And there certainly are advantages to selling high end products over lower-end products too.

But the point is that there's no easy answer to which is better. Every product, every market, every niche, every business, and every person is different.

So the next time someone tells you that you should only concentrate on high ticket sales, think twice. For your situation, that may be right. But I doubt it.