High Ticket Or Small Ticket?

by Lee McKenna Banned
20 replies
Hi Warriors,

I've been selling hight ticket items in the IM niche for many years now and I've been taught this is the way to go.

I wondered if anyone had different views on this?

Does anyone think you can make just as much money with say smaller residual income?

What do you think?

Lee
#high #small #ticket
  • Profile picture of the author kilgore
    My view is that there is no right answer, but that inexpensive items can be -- but aren't necessarily always -- more profitable:

    Rather than re-writing my opinion, you can just read it here:
    http://www.warriorforum.com/main-int...ive-items.html
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  • Profile picture of the author hardworker2013
    Yes the best strategy is to start with small ticket items or free reports to build an
    email list and then pitch the high ticket items to that list.
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  • Profile picture of the author Tom Addams
    I think it depends on too many variables to give a definitive answer. I know this sounds lame, but it's true in my experience.

    Example: You have one method of traffic generation. You optimize everything perfectly. It just so happens that this particular type of traffic responds better to FREE and then an UPGRADE to paid. MMORPG industry is an example. They're slowly all heading to this model. So you'd make more money by promoting free email submits than $50 paid memberships. I have to put my hands up, though, thinking about it now, and say I'm really not sure of which is better. Looking at my own stats today, I see my EPC is much better with high-tickets than low, but I'm doing pretty well (moneywise) with both, because some folks just love those low/free-tickets.
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    • Profile picture of the author heavysm
      Unless you're having problems selling high ticket, just stay there. It takes X number more of those smaller ticket sales to make the same money as the high ticket...so why bother?

      I've always seen lower cost items as a gateway for marketers to get a feel for different markets; see what they feel most comfortable selling.

      What's interesting that I've seen is that some marketers love small ticket, they try high ticket but end up not liking it, and so they stick to small ticket.

      Likewise I've seen high ticket marketers (who always did high ticket) try small ticket and dislike it for the low commissions. So everyone really is different in terms of what they like BUT developing your marketing skill to sell higher ticket by selling small ticket items isn't a bad way to go if you have no skill set whatsoever.
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  • Profile picture of the author gabibeowulf
    It seems to be the norm to think you can sell a low ticket offer on the front end and then a high ticket offer on the backend (usually as a OTO or further down the road, although if it takes too long you may lose those high ticket sales because you lost the momentum).

    This can be the case, but it shouldn't be considered a rule, as so many people think.

    If you're selling a product for $10 to 100 people and you expect to sell 5 out of those 100 a high end $500-$1,000 offer, it can fail quite easily. Maybe those 100 people can't afford spending that much. And that's considering your first product was a major hit in your customer's mind and they decided to see what else you got.

    Sure, if you sell the $10 product to 10,000 clients, you may find a few that will take you up on the high end offer.

    Perry Marshall, a brilliant marketer, said as a rule of thumb you can expect 20% of your customers to be able to spend 4 times more with you than they initially did. So, if you sold 100 products at $10, you can reasonably expect 20 to be able to purchase a $40 product. Applying the 80/20 rule once more, you can expect 20% out of the 20 (4 people) to be able to pay $160.

    As long as you have enough customers and products that your customers see as high value to them, you can keep applying this and still have people taking your higher end offers.

    That's why if you're planning to sell $500 - $1k products, it would be better if you had a list of customers that paid $97 for your products rather than $10.

    Or you can go for the high ticket offer from the get-go... but you should be an expert copywriter and know how to build the buzz and give plenty of value for your potential customers first. Also, if you market to the wrong people, even if everything else is fine, you're still not going to make a single sale.

    It's easier to make more money with high ticket offers than with low ticket offers... How many sales would it take to get to $20k by selling a $10 product.. A ton... If you were selling high ticket offers, you would only need a few. The easiest path is always a straight line...

    Best regards,
    -Gabi
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    • Profile picture of the author kilgore
      Originally Posted by heavysm View Post

      Unless you're having problems selling high ticket, just stay there. It takes X number more of those smaller ticket sales to make the same money as the high ticket...so why bother?
      Because we make a lot of money on low ticket items. In fact, out of curiosity I crunched the numbers from our Amazon affiliate earnings from January 1 through today and found:
      1. We sold 175 times the number of products priced $20 and under than I did products sold $100 and over
      2. We earned 12 times the amount of money on products priced $20 and under as I did on products $100 and over
      I suppose I could throw away tens of thousands of dollars by not promoting cheaper products, but to me that doesn't seem like it makes much business sense.

      The fallacy is that because it's just as easy to promote high ticket items as cheaper items it's just as easy to sell them. This just isn't true.

      I'm not saying what's right or wrong for your business, but I'm trying to reach a mass audience and get them to make lots and lots of repeat purchases, so for me smaller budget items are crucial. It doesn't mean I ignore expensive items entirely, but I'd rather sell 175 $20 items than just one $100 item, so that's where I put most of my energy.
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      • Profile picture of the author heavysm
        Originally Posted by kilgore View Post

        Because we make a lot of money on low ticket items. In fact, out of curiosity I crunched the numbers from our Amazon affiliate earnings from January 1 through today and found:
        1. We sold 175 times the number of products priced $20 and under than I did products sold $100 and over
        2. We earned 12 times the amount of money on products priced $20 and under as I did on products $100 and over
        I suppose I could throw away tens of thousands of dollars by not promoting cheaper products, but to me that doesn't seem like it makes much business sense.

        The fallacy is that because it's just as easy to promote high ticket items as cheaper items it's just as easy to sell them. This just isn't true.

        I'm not saying what's right or wrong for your business, but I'm trying to reach a mass audience and get them to make lots and lots of repeat purchases, so for me smaller budget items are crucial. It doesn't mean I ignore expensive items entirely, but I'd rather sell 175 $20 items than just one $100 item, so that's where I put most of my energy.
        Well duh lol

        If you're going to bring up the Amazon commission system obviously selling lots (namely those low priced items) can push up your commission percent making it overall better for you. But there is that part of the internet that is not Amazon, so i have to include other fixed commission systems as well.

        I like how you disregarded the rest of my post where i explain the "why bother?" part...

        I mentioned how selling high and low ticket products depends on the preferences of the marketer, which is precisely my point: selling the way you do will work for you but may not for others. I'm not remotely arguing against that.

        Pulling out your numbers like you did is nice, but we're not disagreeing about anything lol
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  • Profile picture of the author juk123
    "IM niche"? It's a market not a niche.
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  • I had a coach tell me about selling the product for very cheap and then having a one time offer after they purchased it for like triple the price of the product. That is where i made most of my money selling digital products.
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  • Profile picture of the author Miguelito203
    Originally Posted by Lee McKenna View Post

    Hi Warriors,

    I've been selling hight ticket items in the IM niche for many years now and I've been taught this is the way to go.

    I wondered if anyone had different views on this?

    Does anyone think you can make just as much money with say smaller residual income?

    What do you think?

    Lee
    There is no right answer for this. While I've learned that it takes just as much work to promote a lower-cost item, it really depends on the traffic and the conversion rates of the products you're promoting. Some more expensive things I promote have high EPCs but only convert every once in a while whereas some smaller-ticket items convert on a regular basis.

    Joey
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  • Profile picture of the author jaudet
    There is no right answer I would say, but I am definitely doing the same thing as you did and it definitely works lot better for me than small ticket items.

    High commission affiliate program is the way to go for me.
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  • Profile picture of the author gabibeowulf
    Killgore, there's no doubt you can make money with lower priced products. You yourself are proof of that. However, you can't really compare a $500 sale on Amazon with selling a $500 digital product and draw a conclusion.

    How much money do you make on the $500 sale as an Amazon affiliate? $35-$50? On the digital product, if you own it, it's $500 revenue. Even if it's a 50% affiliate split, it's $250 commission.

    Selling higher ticket items require a different approach than selling impulse buys purchases. You can't market high ticket and low ticket the same way. Sure, it's easier and faster to get get an impulse buy purchase, but you need a ton of these sales on a consistent basis to add up to something significant. Most people will fail here, because it's definitely NOT easy.

    Otherwise, everyone who ever made $10-$20 commissions would be making a ton of money. That's most likely not the case. However, I doubt you'll find too many cases of high ticket sellers who are lacking financially.

    You could even burn out your audience with too many low ticket pitches, because you need them to buy all the time, otherwise you would not make a lot of money. Whereas with big ticket products you can segment your list and only sell to a selected few, while keeping the list intact with minimal damage.

    In my opinion, just because it's easier to start with, doesn't mean it's easier to get to big revenue numbers. Quite the opposite really. That's my experience anyway...

    I don't see a lot of people making $10k a month selling $5 per 500 words articles. And yes, there's a big demand for it and you can find clients for this within the hour. There may be a select few that position as middle men, but even they would have a very tough time getting to 5 figures.

    I have a close friend that does it though by selling $50-$100 articles every single day. He doesn't have to write more than 4 hours per day. So, which one will get you to 5 figures easier? Searching for clients that will pay you well for something that you're very qualified to offer... or sell cheap items because it's easier to get clients?

    Sure, with marketing there are no absolutes.. I have sold a ton of low ticket items both as an affiliate and owner. I have also sold a few high ticket products as well. I made more money with those few high ticket sales in a day than I've made in 6 months selling low ticket offers. They require more preparation and the value has to match the price tag, but if anyone is going after 5 or 6 figures, my personal belief is that high ticket offers will get you there a lot faster.
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    • Profile picture of the author kilgore
      Originally Posted by gabibeowulf View Post

      Killgore, there's no doubt you can make money with lower priced products. You yourself are proof of that. However, you can't really compare a $500 sale on Amazon with selling a $500 digital product and draw a conclusion.
      My only conclusion is that what works for one business may not work for another. And that at least in my case, selling lower ticket items makes a lot of sense.

      Originally Posted by gabibeowulf View Post

      How much money do you make on the $500 sale as an Amazon affiliate? $35-$50? On the digital product, if you own it, it's $500 revenue. Even if it's a 50% affiliate split, it's $250 commission.
      This may be true, but my customers don't want $500 digital products, so if I tried to sell them those I'd make 50% of nothing. Again, I'm not saying anything about your business, but for mine, it just doesn't add up.

      Originally Posted by gabibeowulf View Post

      Selling higher ticket items require a different approach than selling impulse buys purchases. You can't market high ticket and low ticket the same way. Sure, it's easier and faster to get get an impulse buy purchase, but you need a ton of these sales on a consistent basis to add up to something significant. Most people will fail here, because it's definitely NOT easy.

      Otherwise, everyone who ever made $10-$20 commissions would be making a ton of money. That's most likely not the case. However, I doubt you'll find too many cases of high ticket sellers who are lacking financially.
      We're in complete agreement here. We definitely market differently than we would for high ticket items and frankly we're much better at the latter, so we're playing to our strengths as well as our customers' demands. I'm not sure what you think is "a ton", but last month we only had a little over 15,000 orders and it seemed to do us well enough -- certainly far beyond the $10K a month range that you mentioned below at any rate.

      That said, I agree it's not easy. But I doubt if selling high ticket items is either. I have a feeling that there are plenty of high ticket sellers or are lacking financially, though I certainly don't have any data to support this feeling.

      Originally Posted by gabibeowulf View Post

      You could even burn out your audience with too many low ticket pitches, because you need them to buy all the time, otherwise you would not make a lot of money. Whereas with big ticket products you can segment your list and only sell to a selected few, while keeping the list intact with minimal damage.
      Again, it really depends on your marketing strategy. Our main method of driving traffic is via our Facebook page. We post about six or seven times a day and include multiple links to our site in every post. But we also make sure the content is very engaging and it's not unusual to spend an hour or more on each post.

      Originally Posted by gabibeowulf View Post

      In my opinion, just because it's easier to start with, doesn't mean it's easier to get to big revenue numbers. Quite the opposite really. That's my experience anyway...
      I really don't know what is easier. I've only tried the way that's working for us. And I also admit that in many ways we're closer to an internet startup than an IM shop. Part of our competitive advantage is the user experience on our website that makes shopping for the products we market -- both expensive and cheap -- easy. I'll also mention that our niche is probably broader than most people's here so our growth potential is much higher. Our strategy is really about leveraging the scalability of our model to meet the vast demand for the kinds of things we promote.

      Originally Posted by gabibeowulf View Post

      I don't see a lot of people making $10k a month selling $5 per 500 words articles. And yes, there's a big demand for it and you can find clients for this within the hour. There may be a select few that position as middle men, but even they would have a very tough time getting to 5 figures.

      I have a close friend that does it though by selling $50-$100 articles every single day. He doesn't have to write more than 4 hours per day. So, which one will get you to 5 figures easier? Searching for clients that will pay you well for something that you're very qualified to offer... or sell cheap items because it's easier to get clients?
      The problem with selling articles is that it's work-intensive. Not a scalable model at all.

      For us, it's the same amount of work whether we have 2 people shopping on my website or 2,000. It's the same amount of work to post on Facebook whether we have 700 followers or over 750,000. Because of this, we do best by selling cheaper products and appealing to a mass audience.

      Originally Posted by gabibeowulf View Post

      Sure, with marketing there are no absolutes.. I have sold a ton of low ticket items both as an affiliate and owner. I have also sold a few high ticket products as well. I made more money with those few high ticket sales in a day than I've made in 6 months selling low ticket offers. They require more preparation and the value has to match the price tag, but if anyone is going after 5 or 6 figures, my personal belief is that high ticket offers will get you there a lot faster.
      Again, I think we're in agreement. At least about what works for you. My only point (and one which you also seem to agree with) is that everyone's business is different. It's not just about niche, but how you position yourself in that niche. Do you want to sell Coca-Cola or Dom Perignon? Well, it depends if your store is in Beverly Hills or Detroit. It also depends on your skills and marketing style.

      But anyway, thanks for the very thoughtful response. I definitely enjoy this sort of discussion!
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  • Profile picture of the author Randall Magwood
    Originally Posted by Lee McKenna View Post

    Does anyone think you can make just as much money with say smaller residual income?
    I guess if you market them in the right way. I dont care much about the money, i care more about the lifestyle. So if i see someone who says they make $12332813013.82 yesterday i could care less. Not a *knock* on them... i make enough to say the heck with the *idea* of a job... something that i hate with a passion. But personally, i like selling small ticket items. It's just me. Makes me happy. Makes me profitable. Low refund rate lol
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  • Profile picture of the author gluckspilz
    My answer is always with High Tickets...

    That being said, when it comes to marketing wise the High Ticket shouldn't be the front end of the funnel. It should be placed at the backend where trust and relationship has been established.

    Oh, also another thing you gotta keep in mind is your positioning in the marketplace for whatever you're selling.

    I mean, if Batman is real is starts selling his "Batman Coaching Program" for $100,000. I'm sure there will be a shit load of buyers.... because "He's Batman (in his voice)"

    On the other hand, if someone in say.. Iceland with a no name sold the exact coaching program (or even better) for $2. No sales...
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  • Profile picture of the author kadyjoyce
    Banned
    ilove high ticket you can make lots of money
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  • Profile picture of the author mattybee
    Yeah it is a tricky one.

    Big ticket is defo the way to go.

    I have built a funnel that has people wanting to hire me each week. When you charge a few thousand it certainly add's up. What is that worth?

    No way I would share that with anyone else unless they were sworne to secrecy and paid a hefty fee. I saw that when I released my first and only WSO. Never again.

    Matt LLoyd seems to be kicking arse.

    I would rather keep away from that MMO niche it just seems a bit sleazy for me. Just my opinion though. Each to their own.
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  • Profile picture of the author 8485marketing
    Just my thoughts on things.

    In general, I have found that people are more committed if they spend more with my business meaning they implement what they are taught and get results themselves. This doesn't go for everyone but the percentage is far higher with the higher priced items. With more people getting results it makes it easier to make sales in the future and in terms of your own lead generation, a higher ticket product means that you have a higher lifetime value of a customer meaning that you can hone in on your ideal clients using paid ads.

    I enjoy doing low priced low risk items but it's not really done for the money, it's more to do with generating leads that we can warm up over time before introducing offers that are more specific and tailor made to resolving their issues in business.
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    • Profile picture of the author James Fame
      Nothing wrong with high ticket items. If you can find the market for it, then these people are already responsive. No point trying to down their asking price and slowly squeeze more money out of them. It's not a good move.

      I would try to inch those who are already not involved in your high ticket purchases by engaging a different traffic funnel that sells a smaller ticket item, then mail to THAT list your higher ticket offers. These people might be navigating and are confused by all the different offers out there...

      But it depends on you. I find people who purchase lower cost items to be a real hassle to deal with sometimes though. Complains, refunds, etc - and all of that is lower in a higher ticket item from my experience. No idea why.

      James
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      Fire me a pm if you have a question. I build businesses and provide consulting. I do not do finance/money/internet marketing niches. Fitness, self-improvement and various others are welcome.

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