What is Downselling? Is it Profitable for your Business in 2024?

Are you a dropshipper thinking to downsell your products? Or are you confused about what is downselling in dropshipping? Worry no more, because we have got you covered with the ins and outs of downselling in dropshipping.

Dropshipping is easy to start – this statement is just too good to hear, but at the same time it's just too scary to know!

When a business model is this easy to get started with, from low overhead costs to a unique ability to reach out to global audiences – the competition is ought to increase. But should you get scared with this? Absolutely NO.

Because what makes a dropshipping store stand unique is not the product but the strategy they are using. The more innovative a dropshipper is with its marketing technique, the higher are the chances of him getting more sales. And one such way to attract more visitor to your dropshipping website is – downselling, and below we will let you know why!

What is Downselling in Dropshipping?

Downselling in dropshipping, in simpler words means a dropshipper selling a product at a cheaper rate while the competitors are already selling it at an expensive pricing. This is one of the most common strategies used by dropshippers to attract more visitors to their site. The reason why this strategy works best is, it gives customers access to the same product at the cheapest possible rate, hence the chances of them buying it increases.

For example, let's say you are selling shoes in your store, and one of your competitors is also selling the same shoes at the same price. Now, to stand unique in the eyes of customers, if you downsell here, and the product is the same as the one available in the other store, the chances of customers buying the shoe from your store increases. Because why on earth would someone like to pay more if there's the same product already available at a cheaper price?

But downselling is just as easy as it sounds and also comes with a fair share of pros and cons. So to help you make a wiser decision, we have listed out the potential downsides of downselling along with how you can actually downsell, let's get started!

Also read 👉 What are Upselling and Cross-Selling?

Benefits of Downselling in Dropshipping

The potential benefits of downselling in any e-commerce business setup is unimaginable – many have already done that, and have earned good profits in the bare minimum time period. However, down here we will be focusing on 5 of the main ones:

1. Increased revenue

Increased revenue

The one major benefit of trying out downselling in dropshipping is you will be amazed by the revenue change you will see in your store. Many customers often don't buy a product from the store because they believe it's overpriced or not worth paying this much. You can check this out through your cart abandonment rates. Even though the customer has visited your site, they liked a product, but because of pricing they chose not to buy it – which for you means a lost opportunity.

But by downselling your products, you will actually be able to attract more customers to buy products. And the more the customer will be satisfied with the product at that specific price range, the more they will buy again from the store and might recommend others to do so.

2. Higher AOV

Higher AOV

This point is actually an extension of the above benefit. If a customer will step into your store, check out that the products here are cheap and are of awesome quality, the chances of them buying more products increases – because of which your order value will increase. And the more a customer will buy more products, the higher the profits you will earn.

3. Better customer loyalty

Better customer loyalty

We already know that there are thousands of dropshippers out there selling the worst quality products at a higher rate, and customers are actually buying from them. But when you decide to downsell, you will be giving the same customer the benefit of buying the same product at a cheaper price. Hence, because of this more customers will prefer buying from your store, if the products are good they will stay loyal to your brand, all in all, giving you repeat business.

4. Improved customer service

Improved customer service

When you attempt to downsell any product in your dropshipping store, you are actually helping your customer buy the best item at the best possible pricing. And if you are able to share this tactic to your customer, that you are willing to give a solution to customers, they will love your brand. Also, the more a customer will get happier with your services, the higher the sales you will make.

5. More flexibility

More flexibility

The last yet the best benefit of downselling in dropshipping is flexibility. By downselling you are actually giving customers the option to explore more products. For example, if your strategy for downselling is offering free shipping, your customer might actually buy just a product or more and will feel they are getting much better options in this store as compared to other ones. The same goes with other tactics as well, you as a dropshipper, by the help of downselling will get more chances/flexibility to try out different sales techniques.

Downsides of Downselling in Dropshipping

Above were the 5 best benefits of downselling, but that doesn't mean that this selling strategy should be your GO-TO Strategy. Hence, here are three potential cons of downselling of dropshipping you must look into before trying it:

1. Lower profit margins

The only concern with downselling in dropshipping is lower margins. Because Dropshipping is all about you buying (sourcing) products from Alibaba or AliExpress and then selling it on your store. Now you will be the one deciding profit margin here, but when you decide to downsell, you will be actually cutting off your margins. Hence, a big hole in your pocket.

2. Customer attention issues

Selling lower-priced items doesn't just affect the seller, but even the buyer gets perplexed, whether they should buy the product or not. Reason being, customers out there already have a notion in their mind that higher priced items are of superior quality. And maybe because of this belief, they might think twice before making the purchase.

3. Not best for every Dropshipping Niche

To the last, downselling is just not an appropriate sales strategy for every dropshipper. For example, if you are into clothing, AliExpress undoubtedly sells cheap products in this niche, hence downselling here might work for you. But a few products on AliExpress like luxury watches and machines are already priced higher on that marketplace, hence downselling here won't work for you at all.

How to Start Downselling in Dropshipping? A Quick Guide!

After exploring the potential benefits and cons of downselling in dropshipping, if you are still content with the sales strategy, here's how you can implement it the right way:

1. Know the timing

If you are thinking of implementing a downselling sales strategy to your dropshipping store, timing does matter. For example, there are two types of dropshippers. One who has been in the market for long and has a good amount of customers, they get more repeat orders as well. Second are those who have started very recently and are looking forward to testing sales tactics to get new sales.

If you fall into the first category, then downselling WILL WORK FOR YOU. Reason being, you already have customers looking forward to buying from your store, and when you start selling cheap, the chances of them moving to another store becomes less. And if you fall into the second category, with downselling you will be able to get a few sales, but if the product quality is not good here, the chances of you losing your customer's trust increases.

Try downselling only when there is a need and you know your customers well, orelse it will turn into a major failure!

2. Don't overmarket

If you have made your mind to downsell, AWESOME, but don't overmarket. Only a few customers appreciate messages, mails about discounts and sales, rest might start avoiding your brand. Even if you are sending mails to your recent customers, they will be reluctant to visit your site again, because you are just over doing the marketing. Hence, take it easy, and try advertising your customer about cheaper products when they are on your site already, don't be too SALESY.

3. Test your strategies

Downselling might not fit in the very first time, hence stay prepared to test and tweak your strategies every now and then to get it right. For example, do you want to change the pricing of your product directly? Or offer a few products as freebies? Or deliver the item with no shipping charges? Or run a flash sale on your site? Try every strategy out, explore which one is triggering your customers best, and then stick to one.

What is Downselling in Dropshipping? | FAQs

Can I try Downselling in Dropshipping?

Yes, you can try downselling in dropshipping by selling your products at the cheapest possible rate to attract more visitors.

What are the cons of Downselling?

Lower profit margins are among the biggest cons of dropshipping, while a few other including customer attention issues.

Is Downselling the best Sales Strategy?

Yes downselling is the best sales strategy for dropshipper who is selling exactly the same product as its competitor but at a cheaper price to attract more visitors.

What is the meaning of Downselling?

The meaning of downselling is a dropshipper selling products at a cheaper rate or offering major discounts to buyers in the form of free shipping or freebies to increase their revenue and AOV.

Conclusion: What is Downselling and Should you Try it in Dropshipping?

Now that you have explored the whole model of downselling, it's you who have to answer this. Because, if you are opting for this sales strategy, initially your profit margin will be quite low as compared to other dropshippers.

When you will see them earning more for the same products you are selling, you might feel the ache. But do remember that, at this stage, all you have to do is attract those customers to your website so that they can know that you are selling the same product at a cheaper price.

And if you are able to crack the code at this point, your average order value will increase rapidly, thus giving you more profits. Remember that, customers will often feel pressured or misled with your products (since you are selling at cheap prices), but if in any way, you are able to gain their trust, sky will be the limit for you.

So, what are you waiting for? Try downselling your products out, evaluate your results quite often, and ace your dropshipping journey like never before (with DROPTWEAKS)!

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