NaijaTechGuide

In this article I’m going to be debunk the idea that instead of aliexpress dropshipping low cost products that you should instead dropship expensive High ticket items. This is a controversial topic, but I’m going to be honest with you: I think that this is a terrible idea for most new dropshippers, although there is an exception to that which I will be talking about later in this article.

A commonly taken (and perhaps best) approach to dropshipping for beginners is to dropship low cost items from AliExpress. This is done is by creating a Shopify dropshipping store and then running Facebook ads to your products.

However, this isn’t the only approach. I’ve noticed some other articles and videos on YouTube that have been teaching a different type of strategy.

Instead of dropshipping low-cost items from Chinese suppliers that you find through places like AliExpress, you instead focus on dropshipping expensive high ticket items from drop shippers that are based in the USA.

A very common example given is that you could open a Furniture Shopify store selling items, like couches, tables and chairs. Your items will be priced between hundreds to thousands of dollars.

This trend consists of blindly picking more expensive items hoping that large profit margins will make expensive products worthwhile to sell.

The idea was that if you could sell a sofa for $2000 and you get a 30% profit margin on it then you’ll make $600. Whereas if you sell a mug for $10 and you make a 30% profit margin on it, you’ll only be making $3 a sale, so you would need to sell 200 mugs just to make as much money as selling one sofa.

However, this example is unfair for two reasons: Firstly, if you’re doing AliExpress dropshipping the right way then you should have upsells and cross-sells and repeat buyers from follow up marketing, so you won’t just be making $3 on each sale.

Secondly, here’s the question for you: What would be the smarter way to make $600? Selling just one sofa or selling 200 mugs? A lot of people will say: “Surely, it’s so much easier to just make one single sale, than it is to make 200, right?”.

And that’s it, that’s just the end of their argument. A lot of people hear this “argument” and they instantly accept it because in their mind, they’re like: “Whoa, 200 is way more than 1, it must be way easier to just make one single sale”, and you know what?

It doesn’t surprise me that most people will instantly accept it, because psychologically this is how our brains work.

Numbers can play some pretty curious tricks on our minds if you use them right. So, of course, you’ve got your mug which you’ve generously decided to sell for $10. So you decide that in order to increase sales, you’re going to have this item on sale in your store.

Normally this item would be $20, but you’ve listed it as $10 on sale. When you do this, you’ve got two ways that you could spend this discount. You could either say that it’s a $10 discount or a 50% discount. Which is the right one to say which one is going to give you the highest conversions? Well, if you said that it’s better to say that the item is $10 off sadly you are wrong.

Saying the item is 50% off is usually going to have higher conversions and the reason for that that is the number 50 is bigger than the item 10. So, it makes it seem like a bigger discount.

So when you hear 200 Sales, as opposed to one sale, the difference is so huge that it’s going to trigger in your mind that surely it must be easier to make just one sale.

It sounds nice, but the true cold hard facts are that for most beginners, its going to be a lot easier to make 200 Sales of the low ticket item versus that one sale of the high-ticket item.

You see, at SaleSource, a question that we get asked a lot on this channel is why would people purchase AliExpress items from your Shopify store for a markup, when they can buy it cheaper elsewhere.

That’s a great question and as we’ve explained before in other articles, you want to get your customers to impulse buy from you. You want people to see the mug:

Mug

And go “Wow, that’s a super cool mug. I love wolfs, I love Liam Neeson movies. I really want this mug” and by discounting it for 50% off for a limited period of time people go “Man, not only is this mug super cool, but it’s also got a limited time discount. If I don’t buy it right now. I’m going to have to pay full price for it. I better go ahead and purchase a set”, and because you price item at the sweet spot of $10 for impulse purchases, most people won’t really care about spending the money on the mug. They’ll just go ahead and buy it, because they want it.

One of the easiest ways to make money from AliExpress dropshipping is to sell people cool items that people didn’t even know that they want, because they didn’t know that they existed. But of course, now that you’ve shown them the item, they want that right now. That is the right way to do AliExpress dropshipping.

The wrong way to do it would be to try to sell a salad tong. Why? Well, because no one buys salad tongs, because they saw one and impulsively wanted one.

Salad Tongs

They buy it because they’ve decided on their own accord for whatever reason, maybe their previous one broke and they need a new spatula. And it’s when they are in that mindset that they are going to do their research and price check their options and discover that they can find much cheaper salad tongs than your $8.95 one, at the local Walmart and they can get it today rather than in 2-3 weeks.

Well guess what, high ticket item suffer from this exact problem. They are not impulse purchases. Purchasing something like a couch is a big decision for multiple reasons:

Firstly, because you spend a lot of money when you buy one: $800, $1000, $2,000. For most people that is understandably a lot of money. So if they’re going out there and purchasing one, spending so much money, they must have really weigh up in their minds that they really do want a new couch.

Secondly, most people who are going out there and buying a nice expensive new couch probably have a couch already. So, they’re going to have to go through the effort of thinking about how they’re going to get rid of their old one.

Not only are couches expensive, but they require a lot of preparation in order to go ahead and purchase. People are not going to do this impulsively.

So what does this mean? Well, it means that your potential customers are in the mindset of researching their options and so when they go and they do a Google search guess who your new competitors are?

You are now competing with Ikea, Pottery Barn, Ashley Home Store, etc. Here is the thing, competing with big brands is not impossible, it’s just very difficult. Here are some of the things that you’re going to have to do:

Build up an enormous amount of trust between you and your customers is key when it comes to Shopify Dropshipping

Spending $1000 on a couch for most people is a very big deal. They can’t just afford to spend $1000 on a bad couch, discover they don’t like it and then go and purchase another.

And even if your store does offer a refund policy, most people don’t want to have to go through the bother of shipping a couch back to you – they are going to want to get it right the first time.

Brands like Ikea have an incredible amount of trust. Customers know that if they buy a $1000 couch from them, not only will they actually receive it, but it will be of good quality.

So my question for you is if you were sitting there right now and you’ve been considering opening up high ticket drop shipping store. Do you really feel like you have the skills to be able to create enough trust in the consumer that they will feel like that they can trust you with a $1000 purchase over Ikea?

You will need to Send People through a Sales Funnel

Selling low cost items as impulse purchases means that when someone’s in the mindset of doing an impulse buy – they are not going to think about comparing your item price to that of your competitors.

So you don’t have to worry about competing against competition and making them think that your mug is the best mug.

But if you want to choose to drop ship high-ticket, you are directly going against big brands and it’ll be up to you to convince the customer that your couch is the best couch. You’re going to have to have a much slicker looking Shopify store and have a better sales page.

Having a basic Shopify store is just not going to do. And be prepared to get a phone number, as you’ll need to be closing sales over the phone, because closing sales directly is probably the only way that you’re going to even have a chance of competing.

Furniture Shop

The fact that places like Ikea, as part of their sales funnels have actual show rooms where people can go and see the furniture, sit on it and try it out for themselves.

Have a lot of Start-up money set aside

Because you’re looking to build up large amounts of trust with your customer, having a simple basic Shopify store with a logo that you got from Fiverr is probably not going to do. You’re going to have to invest far more time and money into the store creation process.

If you want to sell a $1,000 sofa, there’s a very good chance that you’re going to be investing hundreds of dollars into paid ads, like Google ads just to get a sale and then if you manage to close a sale, you still have to actually go out there and purchase the sofa that the customer bought from you.

See, this is something that not many people talk about: If you’re dropshipping an item from a US-based supplier and you’re charging $1000 for that item, I would not be surprised if you’re paying at least $500 for it.

Yes, you will eventually get the $1000 that the customer paid you for the item, but that money doesn’t come and instantly. If you’re using PayPal it can easily take up to three weeks, and if you’re using stripe, they have weekly payouts.

But you can’t afford to wait one two, three weeks – you need to purchase the item right now, because the customer bought it right now. So you need to have access to hundreds of dollars to thousands of dollars of start-up money, just to be able to fulfil orders.

This can be a very high barrier for some people. When you’re doing AliExpress dropshipping, I’d normally recommend that as a beginner you have about $200-$300 set aside for fulfilling orders and from the emails that we receive at SaleSource, we know that beginners often find that challenging, let alone having to set aside far more.

Final Words

Yes, on the surface it sounds like it should be way easier to sell just one item and make $600 versus selling 200 smaller items, but the real truth is that selling High ticket items requires far more skill, far more experience and far more money to get started, which is why as I said at the start of the article, there is an exception to this and that is if you have a mentor to guide you through the process.

There are a lot more skills required and there is a higher risk involved in starting a high ticket dropshipping Store.

So I really don’t recommend that beginners start one of their own. But if you have a mentor, they can use their experience and their skills to help you fast track your way to success. But of course if you don’t have a mentor and you’re just starting out as a beginner, then I recommend you make it as easy for yourself as possible and stick to selling lower cost items.

A Problem Worth Solving

In recent times, there have been a growing rate of emigration of medical practitioners from Nigeria to developed countries. Annually, it is estimated that 2000 doctors leave the country to practice in developed societies. US, UK and Canada are the popular countries of destination.

There are about 72,000 medical doctors registered with the Medical and Dental Council of Nigeria (MDCN) but only approximately 35,000 are currently practicing in the country.

Consequently, the ratio of doctor per population is approximately 1:6000 for a population of over 200 million in the country. This don’t tally with WHO recommendation of 1 doctor to 1000 population. Nigeria needs 165,000 doctors more to meet WHO standard.

This ratio would only keep getting wider as the population growth rate is 2.6% annually and 91% of junior doctors are already considering practising abroad.

The Nigerian Association of Hospital and Administrative Pharmacists (NAHAP) has said there are about 17,600 registered pharmacists in the country, giving a ratio of 1 pharmacist to 12,000 Nigerians.

Also far more than World Health Organization (WHO) recommendation of 1 pharmacist to 2,000 population.

Nurses, Medical laboratory scientist, Radiographers and other health professionals are not left out of this mass exodus from the country.

The major reasons for this problem are:

Poor Remuneration: The average monthly salary of a doctor in Nigeria in both the public and private sector is #200,000 naira which is about $560 as against $2500 that is obtainable practicing in the US or UK. This has led to consistent strike actions that usually ends up unproductive.
Poor Working Conditions: There is shortage and in some cases lack of medical facilities to aid a proper practice. Sadly, the burden of the number of patients can be overwhelming as well.
Insufficient health institutions to employ medical practitioners that has left many jobless.
Poor opportunity to grow in their career: The current atmosphere, does not encourage growth of medical practitioners in their career. Most times medical practitioners have to foot the bill of furthering their studies to increase their knowledge.

In this article, we are going to look at how the business model adopted by Uber- which is called the on-demand economy or gig economy or platform economy can be used to solve most of these problems.

But first let us look at the history of business transactions as it relates to the seller and the buyer.

The Business Model

Handshake

The bedrock of any business transaction is the meeting point of the seller/ service provider and client/customer.

The meeting point provides an atmosphere of trust and assurance for both parties for the transaction to take place. The seller wants to feel assured that the buyer can pay for his service and the buyer wants to be sure of the quality of service rendered or goods to be purchased. Neither of them wants to be cheated.

Independent contractors or freelancing was the main practice in the earliest times of business transaction. Then community base settlement was more popular.

A service provider would be well known in the community to render a particular service. Since the population was small, trust was not much of an issue.

As a service provider, if you render a poor service to a customer, feedback travels quickly among members of the community regarding your poor service and it can lead to a decline in business. This makes service providers work hard to give their best to customers.

As the communities started growing bigger into cities and even metropolis, and technological advancement now pushes the world into a big community, this model of business transaction no longer seemed sufficient.

Sellers had to put more measures to gain buyers trust so they can also widen their customer base to far reaching places of the cities or even country at large.

This led to the rise of the corporation or organization which became the backbone of the industrial economy.

In the industrial economy, the meeting point for service provider or sellers and the customer, is called an organization or company where the transaction is carried out.

In the organization model, service providers of like and complimentary skills are brought together to form a legal entity called the corporation or organization.

The organization is what customers would now have to interface with when carrying out a business transaction. Since these organizations have to register with the country of residence to render service, trust is built in the heart of the customers. In this way, customer dissatisfaction in the organization can lead to poor brand name for the organization.

The downside of this model, is that quality and cost of service is dictated by the organization and the service providers are usually placed on a fixed wage which most times is small compared to their work input.

At times they work outside their work description. There is also a fixed time frame for work, which renders the working condition is not flexible.

Advancement in technology is gradually changing the way business transactions take place. Two main breakthroughs are the drivers of this change:

Faster transportation means ensuring faster delivery of goods and services.
Faster transmission of messages over the internet and telecommunication networks over great distance.

Faster way of delivery of goods provide business the opportunity to send goods to customers globally and faster transmission of message also aided quick delivery of messages.

This advancement led to better business opportunity for the organizational business model, which led to huge profit. However, these same drivers, are gradually proving to be bane of the organizational business model.

In 2008 a company called Uber was born. They propose a business model in contrast to the traditional organizational model. In this model, the spotlight is placed on the transacting parties; in their case; the driver and the rider. While trust is handled by leaving a review and social proof on the platform for the service provider.

The driver can sign up to offer transportation service to the rider. The transactions are managed on a software that helps in the quick transmission of the transaction details.

This model leaves the service provider with a larger sum of the transaction fee unlike in the organization business model where the organization takes the bulk of the profit and pay the service provider a fixed wage.

The service provide can gain more in relation to work input. On the other hand, the customer enjoys a more affordable service.

Also, for trust of the quality of service, the customer is provided with enough information as with the reviews of other customers for a particular service provider. Top service providers get high ratings and are ranked high on the platform.

This is exactly how it was in the earliest times when business transaction was limited to the community and poor service is easily known by everyone in the community.

Only that technology, makes it easy and fast transmission of message and transportation now makes individual sellers get business transactions from far reaching cities and even globally.

For instance, a Nigeria seller can sign up on Amazon.com (a US based company) and sell products on their platform, they do not necessarily have to see the product because another company can fulfil the delivery for them. At the end Amazon.com only take a percentage, leaving seller with the bulk of the money.

This business model is called the on-demand business model or platform or sharing economy.

In developed countries, there are medical platforms adopting this model of transaction for their health sector. In health, this model of business is called telemedicine.

Telemedicine is the remote delivery of healthcare services, such as health assessments or consultations, over the telecommunications infrastructure.

The Nigeria Health Sector and the Current Business Model

Hospital and Healthcare Centre

The Nigeria health sector still practice the traditional organizational business model. Where the meeting points are the hospitals, clinics and pharmacy shops etc.

This model has led to the earlier discussed problems and is causing medical practitioners to leave the country for a better practice in developed country.

The on-demand economy has so much to offer the Nigeria health sector.

Features to expect from a Telemedicine App for Nigeria Health Sector.

Physicians and patients should be able to register on the platform for free. This way, the patient would not have to pay registration fee and the doctor can sign up easily as far as he can prove that he or she is a doctor and licensed by the Medical and Dental Council of Nigeria (MDCN) to practice in Nigeria. The doctor would have a provision to upload the current license to practice for that year. In this way quack doctors can be prevented from registering from the platform. MDCN should also grant access to the public via their website so they can easily confirm the validity of a doctor, in this way any app developer can also confirm if a doctor is registered on their platform.
The Physician should be able to set his/her own consultation fee: Physicians currently sees a lot of patients and they are paid just a fixed amount of monthly wage. With this model, the doctor can fix their own price. If a physician sees 25 patients per day at a consultation fee of 1500 naira per patient, at the end of the month for a 20-working day, the physician would earn 750,000 naira which is 375% higher than the current average fixed wage.
Appointment booking system: the app should be able to manage the doctor’s working schedule by automatically arranging patient’s appointment in accordance to the doctor pre-set schedule. In this way, patients would be allotted slots and a slot can not be booked twice to avoid clash of appointment schedule. The physician would be able to see consultation queue on their account in the app.
Provision should be made for a two-way chat and video conferencing: The app should provide a two-way experience. Consultation can either be live or virtually. Patients might like the convenience of a video chat with the physician instead of the traditional office visit.
Medical records of patient should be storable and easily retrievable in the cloud. This would give physicians access to enough information of the patient’s history both medical history and disease history. So, treatment plan would be more scientific rather than empirical.

Conclusion

There are telemedicine apps currently in existence in Nigeria but there is poor awareness. The various stake holders and venture capitalist need to act fast to cub this problem of medical emigration.

A viable system needs to be created and funded. There is so much more telemedicine can do for the Nigeria health sector.

Author Bio:

Pharm Afoke

Pharm Afoke is the founder of fokzmedics.com, a practising pharmacist and medical writer. He is highly enthusiastic to see how the internet technology can be adopted to solve problems in the health sector of Africa.

email: aakpomiemie@gmail.com