Hey, guys. Trevor Fenner here with eCommerce Paradise. Today I wanted to talk about AliExpress drop shipping versus high ticket drop shopping. A lot of people that are getting into drop shipping, you might be interested in it and you might be searching on YouTube right now. It's probably why you found this video. The thing is that most people that are talking drop shipping are talking about this thing called AliExpress drop shipping. It's a business model where you source your products from a website called aliexpress.com, which is basically a sourcing agent themselves that helps you source from Chinese manufacturers that are based in China.

It's a way for you to find products for super cheap that are normally sold in the U.S. market for a bit more. Usually the margins are upwards of 50% to 80%. If you can find a product for like 5 or 10 bucks on AliExpress, it's usually sold for somewhere between $30 to $60 in the U.S. market. That can go down from there if it's a very competitive niche. It can also go up if it's not competitive at all. It really just depends. The difference is with high ticket drop shipping mostly is that you're working with U.S. based suppliers. There are some exceptions.

Some people are able to source high ticket products directly from China, but I usually don't recommend that because you run into a lot of issues with product quality control and things like that and having to deal with warranty returns. The cool thing is that high ticket drop shipping with U.S. based suppliers, you can work with their warranty and things like that. You are working with products that you have better control over. In this slideshow, I'm going to more in-depth on different topics and ideas and reasons why I highly recommend one over the other. Let's just look at a few key facts. AliExpress drop shipping versus high ticket drop shipping.

Number one is the startup cost. The startup cost is about the same. You can build and launch your online store for around a hundred bucks. Sometimes it might cost more. For high ticket drop shipping, there's a lot more optimizations involved in order for you to make sales. With AliExpress, if you really want to be able to scale and make more sales and close more sales online more passively, you do have to put in more optimizations and that takes more money. In the beginning, you can really start for a hundred bucks or less for both business models.

Now as far as long-term obligations go, you really don't have any long-term financial commitments to either business model. All the online services that you'll be using to start up, they work on a monthly basis. You just give up and go back to your day job or something, there's no long-term financial commitment required. The monthly overhead with any of these businesses. Now overhead is one of those tricky subjects because usually people associate overhead with brick and mortar retail store front businesses, so you have like rent. You have insurance. You have electricity.

You have plumbing. You have AC, whatever. You have employees. There's lots of overhead associated with those businesses. Now with a online business, there really is no overhead like that. However, you do have to pay for things like hosting. You have to pay for tools and resources that you'll need to get started like a phone number, email address, all that stuff, but usually it's typically less than 50 bucks a month when you get started. When you get growing, it might be less than $500 a month. It's really low and it's about the same for both models. Monthly ad costs. Those can vary all over the place. It really depends on your ROI, so your ROAS, your return on ad spend.

It also depends on your optimizations of course. If you have a .5, 1%, maybe 2% conversion rate and you scale those ads, you really don't need to set a huge budget to get a good return. If you spend $1,000 and you get 2 or $3,000 back, then you're making a few thousand bucks a month or whatever, a couple thousand bucks a month, and you're set, right? You could try to scale from there. Typically the ad budget for high ticket drop shipping, somewhere around $1,000 and $2,000 a month to bring in close to 3 to $6,000, maybe up to $10,000 in net profits. With AliExpress drop shipping, that's a totally different method.

There's two entirely different lead sourcing methods here. With high ticket drop shipping, you usually use search engine marketing, so Google Shopping, Google search text ads, YouTube videos, ads, things like that. With AliExpress, you're going to use interest-based targeting. Facebook ads and Instagram ads are really big with AliExpress because you're targeting people that are going to make an impulse buying decision. That's something that they just really like that fits their lifestyle. It's all over the place, but you decide to set the budget. It's your decision. You can decide to make $5 a day ads, $10 a day ads, whatever.

In the beginning, you have to focus on the optimization and then you can get to raising your ad budget, right? Now the key here, the biggest factor between AliExpress drop shipping and high ticket drop shipping is the breakeven point. It's cool that AliExpress drop shipping requires up to hundreds of orders or thousands of orders per month in order to drop ship profitably. With high ticket drop shipping, maybe only 10 sales a month, 20 sales a month, 30 sales a month and you're making a part-time to full-time income with this business model. It's a lot less orders in order to get to profitability, which is great.

That's due to the high profit per order that you make. I'll be talking about that coming up here pretty soon. The last point is that the time requirements are about the same. It's pretty interesting, but it takes the same amount of time to build an AliExpress drop shipping store as it does to build a high ticket drop shipping store. It takes the same amount of time to source suppliers, get those products uploaded to your site, put content on your website, run the ads, all that stuff.

With that said, the same amount of time and money that are put into building those stores and yet you make way more profit per order with high ticket drop shipping, it's kind of obvious which direction you should go. Why would you stress yourself out? It does take a lot more time and effort to process hundreds or thousands of sales. You can pay for automation tools to do it for you, but that's expensive. It's another expense. You'll need to spend more time doing customer service, right? Customer service is with every single order. Some people won't write to you at all. Some people will write to you a lot.

It just depends. There's more chances of errors from the supplier and mistakes in the ordering. There's also more chances of the product arriving wrong, the wrong color, the wrong size, whatever. There's also more chances of damages in shipment and product defects and just generally speaking, more headaches. High ticket drop shipping is less orders and less headaches. Now let's talk about marketing a little bit here. When it comes to marketing, there's three specific ways that I do it that work really well. Number one, we start with email marketing. We start by building a lead generation funnel.

When somebody lands on our website, they're going to enter their email address in exchange for some sort of a coupon and then we send them a series of emails to get them to go through the checkout process. Once they go through the checkout process, they get sent a series of emails, as long as they haven't ordered, about their abandoned cart. Then if they order, then they get another series of emails to get them to buy more from us and engage more with our brand. Okay? That's set in place first and then we run Google Shopping campaigns. Google Shopping is this great thing where people type in a search query based on the product they're interested in.

If you sell that product, your ad will show up first in the Google search results at the top with a picture and the name of the product and a price and your store name and some kind of a promo code as well. You can compete really good there because people love shopping by pictures and content. They use that a lot. Google Shopping is not that expensive. Google gets to choose the keywords that you rank for. You can set negative keywords, but generally speaking, it's a very low cost model for getting started with getting traffic to your website.

Then when somebody lands in your website from Google Shopping, but they just decided not to buy from you for some reason, you use Facebook remarketing ads. These aren't people that are cold leads. These are warm leads. People that have landed on your website, stayed on there for 30 seconds or longer, looking through the product, but it wasn't the right time to buy. You'll show your ad in front of them with that same coupon code again and they're way more likely to buy at that point probably because they're sitting down on their computer or it's been a day or so and they just decided they need to buy it now.

Thanks for following up with me about it. All the same effort and time goes into each store. Why wouldn't you just want to make more profit per order? AliExpress drop shipping, it's a different marketing method entirely. You have email marketing in place. You'll have Facebook remarketing in place or you should. Instead of Google Shopping, you'll be using Facebook interest-based ads. You'll be using all these lead-based ads. Get people excited about the product. Videos. All these like sales copy and stuff. You try to make the sale right then and there basically. Get them to your website.

Hopefully opt-in through your email list and then remarket to them if they didn't buy later. For such low profit dollar products, you're going to have to make tons of sales to pay for these ads. Facebook ads, they used to be cheap and they're getting more expensive because niches are becoming more competitive. More people are entering all the time, and yet Google Shopping ads are not really getting too much more expensive. They've been consistent over the last half decade.

It's gone up a little bit in different niches, but generally speaking, when a bunch of people enter the market and a few people are winning, most of those people will end up leaving within six months to a year anyways just because it's unprofitable and they don't know what they're doing. Then the ad costs go back down. That's usually what happens. Again why high ticket drop shipping is better. You're creating real relationships with U.S. based suppliers. With AliExpress, you're not really creating a real relationship. You're just buying a product off of a website really and having it drop shipped to your customers.

That same customer could have gone to AliExpress and bought that product themselves. Why not? If they know better and they know how to do online shopping and stuff like that, they might be able to just go find that product themselves and wait the same two to three weeks to get that product. Now the shipping time with high ticket drop shipping with U.S. based suppliers is usually between 7 and 10 business days. Maybe less. It's much better because your product arrives and the customer gets the product and gets to use it and approve it before a couple weeks have gone by.

Now if you have a customer who's waiting a month or more to get their products like with AliExpress drop shipping, the charge back potential goes way up, right? People aren't getting their product wihtin two to three weeks, they're going to say, "Where's my product? I ordered this thing. What the heck," and then they just go on their credit card report and they file a charge back. It's way better to have faster shipping times. You just can't really get those with Chinese drop shipping unfortunately. Again high ticket drop shipping is way better because your products actually have warranties.

With AliExpress drop shipping, your products aren't going to have warranties. You're going to basically be the manufacturer. Even though you're a retailer, you're kind of both because you can't just send that product back to China. You're going to have to tell the customer to go ahead and just keep the product, right? Hopefully it's low dollar enough for you and there's low enough of these issues that you can just do if there is any issue. With high ticket drop shipping, you're working with real suppliers. Those suppliers will have warranty policies, and you'll be able to request warranty service from the suppliers for those customers.

Your job is just to do the back and forth and make sure the customer gets taken care of. Sometimes they'll ship the product back at the supplier's expense. Sometimes you'll have to cover the shipping. Usually the way it works is it's very profitable and the warranty issue thing is very low if you're working with good suppliers, which by the way is ... I teach how to work with only the best suppliers in my academy. Another thing is you don't have to deal with returns yourself. The way I teach how to do it is if your supplier doesn't take returns back for some reason, then that's the same thing you're going to tell the customer is no returns are accepted.

You can always figure things out yourself. Maybe if you get big enough, you can get some sort of a fulfillment center or an account with a fulfillment center and have item shipped back and take pictures and sell them on eBay or something. Really you don't have to deal with returns with high ticket drop shipping. People may still submit return requests, but you need to have a policy in place and you can take care of them that way and offer them other ideas like, "Hey, you can just resell what you have on Craigslist or eBay yourself and come back to us and buy a different product." All right.

The last thing is quality control is usually actually something that you get with high ticket drop shipping. You never know what the quality is going to be like coming from China. You have to do a lot of research and read a lot of reviews to make sure that it's good quality coming from these suppliers because sometimes the supplier's quality can really bad. A lot of times you'll actually want to actually do a test purchase first with AliExpress drop shipping just to make sure. Now with high ticket drop shipping and a U.S.-based supplier, usually the quality is much better because they are ordering from the Chinese manufacturer.

They are taking the product in. They check the product first before shipping it. They've repackaged it or they palatize it, whatever, if it's a big product, and then they ship it out. Usually the quality control is much better. Some more points here just to kind of reiterate. When you sell a $1,000 item, your profit at about 30% is around $300. Making $300 profit per order or more. Like if you sell a $2 or $3,000 item, it could be $600 or $900 profit, that really does help pay for all your marketing costs and actually give you real income.

When I've gotten my store is going really good, it's usually between two to five sales per day. It's around 1 or $3,000 per sale. When you really get going, you're making $1,000, $2,000 per day in net profits. That's just amazing because then you can really, really, really scale up your businesses. With AliExpress drop shipping, again you're going to make on the same profit margins ... Usually actually with AliExpress it's around 50% margins if you're doing it right. I'm going to say $100 item with 50% margin is usually actually about 50 bucks instead of 30 bucks. $50 still is not that much to make per sale.

You're still going to have to make like, I don't know, 10 or 20, maybe 30 sales per day in order to be profitable at the same level you could be with high ticket drop shipping. 10, 20, 30 as opposed to 1, 2 or 3. Take your choice, right? The same amount of money goes into marketing these products. Again it's not a whole lot different. The same ad costs and ad spends that bring the customer to your website, to remarket them, to follow up, all that stuff is very similar. The same amount of effort goes into creating the website, building it all up, building the marketing, stuff like that, and fulfilling the order.

Why would you rather make 30 bucks? You would probably rather make $300 per order, right? It just make sense. This is all the cool stuff that I teach how to do in the eCommerce Paradise Academy. Now the eCommerce Paradise Academy High Ticket Drop Shipping Masterclass specifically is about a case study store that I have built that I documented the entire process with my best, best methods of starting up and launching and scaling the drop shipping business. This is way different because most courses just teach you how to do stuff. Kind of like show you topical overview stuff and then maybe screenshots. Maybe a demo site.

You kind of have to figure things out yourself. They don't show you how to do code adjustments in the theme or customizations. I actually break down and film and record the entire process of me doing all of that. It's way different from any other course out there. The coolest thing is that right now it's at a drastic discount because I'm still building it out. Get in there right now. I can't guarantee the price is going to last forever, but check it out. If the pricing is still good, it'll be on that sales page. If not, if I've actually finished the course by the time you watch this video, then the price is what it is.

You can always sign up for my free mini course called "The Drop Ship Secrets" if you're just getting started. That really goes over more of just topical overview stuff where I go into depth onto what you need to know before you go about starting a drop shipping business. You can also get my free niches list. It's a 99 niches that are actually vetted. These are niches where real websites exist out there that are selling these, that are niche drop ship only websites. That's key here is understanding that you need to find competitors first that are actually already successful in your market because you can start selling to that market.

Again it's something that I talk about in the academy. That's in the niche section of the academy. You can go to the sales page ecommerceparadise.com/academy or just go to the homepage. Sign up for all niches list and the free resources there and stuff like that. You can read some guides. Go to the academy sales page, academy.ecommerceparadise.com and read about it and look at all the lessons. I actually list out every single lesson I do on there, which is again totally different. Most courses never do that kind of a thing. I actually show my lessons out there, what they are. You'll see all the in-depth work that it goes into.

Some of those modules have 30 plus lessons in them, and that's just because this takes a lot of work and I realized that most courses don't teach people how to do it. They teach people like the super simple stuff because I realized most people want something that's just really simple. Easy to implement. They can just do it fast. The truth is that this stuff isn't simple. In the beginning, it might be, but really if you want to do it right, you want to be profitable with it, actually create a real business, you're going to have to get more into depth, right? That's why I decided to teach and make something that's better than anything else out there.

Go check it out. eCommerce Paradise Academy. Get your free niches list. Get your free mini course. If you decide that this is something that you want to do, then you can get in there and get started right away. I'm looking forward to helping you start your own profitable high ticket drop shipping business. I'll see you on the inside.

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