High-Margin, Low-Ticket Businesses

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There are high-margin, high-ticket products like software. There are low-margin, high-ticket products like bulk orders of gravel or iron ore. And there are low-margin, low-ticket products like paper towels.

But today's special report focuses on a fourth option...

High-margin, low-ticket products such as $2.99 eBooks or $10/month newsletter subscriptions.

As someone who sells both of these, I wanted to explain how the business model works and why selling low-ticket products can be a lucrative venture — if you know what you’re doing.

What To Sell…

In business, they say one is the loneliest number. If you are selling an inexpensive product, you need to create something that can be resold forever.

Spending an hour making a $5 product that can only be sold one time is stupid.

Spending an hour making a $5 product that can be sold unlimited times is lucrative, as long as you build your sales network.

If business, there’s a concept called “Network Effect.”

This is the idea is that a product or service increases in value when more and more people use it. Anybody can start a web forum or online bulletin board. The value lies in how many active members frequent these sites.

A $2.99 eBook that teaches the reader how to fix a motorcycle is a bad low-ticket business. There’s one product, it’s very specific, and there’s nothing to follow-up with.

Ten short $2.99 books about your various motorcycle adventures, a longer $9.99 book about fixing motorcycles, and two supplementary $7.99 books about motorcycle safety and motorcycle maintenance…

Now you’re getting somewhere.

A customer who would have tapped out at one $2.99 purchase is now potentially worth up to $55.87 thanks to all your various books and products.

Newsletters and private membership groups also benefit from the network effect.

You can also add a high-margin, low-ticket offer to an existing business. For example, if you run a YouTube channel, you could introduce a membership tier where subscribers pay a small monthly fee in exchange for early access to content or a shoutout at the end of each video.

Again, these are low-ticket offers that probably sound unimpressive on their own.

But in aggregate, the network effect makes them extremely valuable.

Here’s a real life example…

If I may plug “Dividend Insider” for a moment, this is The Daily Dividend’s $10/month premium newsletter. Members get one extra special report each week, and the returns from stocks analyzed in these reports more than pays for the newsletter subscription.

In other words, each customer gets a product worth far more than the $10 price tag.

And, thanks to the network effect, I’m able to produce premium reports without the premium pricing.

Profitable Niches And Audiences…

Low-ticket offers work best when you’re selling to people with discretionary income.

That may sound embarrassingly obvious, but let me elaborate…

Your ideal low-ticket customer will happily make a quick, emotionally driven purchase without overthinking.

Assuming you are a good writer and have crafted two hooks of equal intrigue, a fictional short story is an easier low-ticket sell than a short eBook about weightlifting. Why? Because a fiction reader will happily pay $2.99 to satiate their curiosity about an intriguing back-cover blurb. Meanwhile, someone looking for a weightlifting guide will need a hard sell on why your book is more valuable than a weightlifting book by an Olympic athlete.

When it comes to high-margin, low-ticket businesses, you don’t want to put yourself into a situation where you’re actively hard selling a product that costs less than an order of medium fries at McDonald's.

Crunching Numbers On A Theoretical Low-Ticket Business…

Let’s use Amazon self-publishing as our low-ticket business model.

Why?

Because Amazon handles a lot of the marketing for you.

Amazon.com is the world’s largest e-commerce search engine, and the third largest search engine in general.

You can create an author’s page that automatically notifies readers when your next story is out. Additionally, Amazon will automatically recommend your book to customers who’ve enjoyed similar titles.

Let’s say you build a following of 50 readers who’ll buy all your new releases. And, let’s say you’re publishing short fiction on a weekly basis…

At a price point of $2.99 per book, you’re collecting $2.07 per sale in royalties.

50 customers × 2.07 = $103.50 per week

Over the course of a year, 52 weeks, this works out to $5,382. And this figure excludes one-time impulse buyers or the pleasant surprise of having a viral title that does extremely well with a wider audience.

Other high-margin, low-ticket offers, like a newsletter or private Telegram group, are potentially more profitable since:

A) You don’t need to write a 5,000-word story before you start selling.

B) You can directly promote your offer through platforms like Twitter and YouTube — something that’s often difficult if you’re selling a fiction-based product.

You can succeed with high-margin, low-ticket offers as long as you: create a “no brainer” repeatable offer, grow your network, and deliver a quality product that customers love and benefit from.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.