Upside Down: Pros and Cons of High End vs Low End Markets

[Ms R]

In order to build a business that makes a million dollars a year, some simple maths helps put things into perspective.

First number is the target profit per transaction, purchase etc and the second is how many times you need to secure it to make $1,000,000.

$50,000 x 20
$30,000 x 34
$20,000 x 50
$10,000 x 100
$5000 x 200
$2500 x 400
$1000 x 1000
$500 x 2000
$250 x 4000
$100 x 10,000
$50 x 20,000
$20 x 50,000
$10 x 100,000
$5 x 200,000
$2.50 x 400000
$1 x 1,000,000

Of course there are many variables to consider and there are advantages and disadvantages to going high end or going low end. My first business started low end (it was really scary asking people for money at first) and quickly turned high end because it was a lot more profitable quicker (needed less clients to make same amount of dollars, had less issues with clients paying on time and it was easier to follow up on less customers).

High End

Pros
Each sale has a decent reward
Need less sales to make more money
Less customer service issues
In my experience, better paying clients

Cons
Potentially harder to make a sale with a higher priced product


Low End

Pros
Easier to sell a cheaper product
More people can afford it
More likely to go viral (lady with the keep keys from getting lost in handbag idea)

Cons
Need to sell a lot
More customers equals more customer service
Need to get in front of more people to sell more
Can attract lots of bad payers/annoying clients

What are your pros and cons for high end vs low end?

 

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[Bozigian]

Nz uqopoup-

Johj ipf nelit tunivjoph muul iyqiptowi epf wemaecmi
Mux ipf nelit tunivjoph muul djieq epf puv et wemaecmi et og ov xisi johj ipf.

I.h. Zua xies e tjosv gus vji geos, e txesn ug cosft gmzcz epf zua hiv jov, zuas tjosv dutv 10 fummest cav ov siemmz xuamfpv ci e cof fiem cideati ovt upmz 10 fummest.

Cav og vjev tjosv dutv 100 fummest vjip zua xuamf qsucecmz ci qottif

 

[Russ H]

"Devis vu vji nettit, epf mowi xovj vji dmettit.

"Devis vu vji dmettit, epf mowi xovj vji nettit"

Vjev xet ni.

O xuslif gus vji taqis-sodj ($100N epf aq) gus 20 ziest.

O mowif ximm, cav piwis huv sodj.

(O tasi miespif e muv, vjuahj, epf gohasif uav xjev xet onqusvepv vu ni).

**********

Fiwimuq tunivjoph tonqmi, epf djieq, vjev nommoupt ug qiuqmi xomm caz-- epf zua jewi zuas getvmepi vu nommoupt.

Fiwimuq tunivjoph iyqiptowi, epf dunqmodevif, vjev upmz e gix xomm caz-- epf zua jewi zuastimg e hsiev timg-inqmuzif podji (ele e "K.U.C."). Puvjoph xsuph x/vjev. Cav ov't puv getvmepi.

O'wi fupi cuvj eqqsuedjit (uas tonqmi/djieq ot $99-$1000+ qis).

Cuvj jewi efwepvehit, epf fuxptofit.

-Satt J.

 

[Trent]

Satt' qutv tannif ov aq ximm.

O'f moli vu eff vjev og zua esi opvisitvif op devisoph vu vji johj ipf, zua tjuamf djidl uav Fep Lippifz't Neslivoph vu vji Eggmaipv cuul.