Why Business Is A Game of Margins, Not Volume – How To Sell High-Ticket Products & Services Ep. 1

(triumphant music) I don’t know if you can hear, but I’m actually quite sick. That’s why my voice is
not as optimal as usual. But, (audience laughter) I’m not going to let that
affect my performance. Okay, ’cause I’m here to deliver. Okay, so get ready to take notes. How to sell high ticket
products and services? How to sell high ticket
products and services? Questions number one, what would you consider
as high ticket for you? Just yell out the number. (audience speaking) – [Woman] Ten grand.
– Ten grand? – [Man] 100 grand.
– 100 grand! Okay. – [Second Man] 10, 20.
– 10 grand. Okay. – [Third Man] 5, 10.
– 5, 10? – [Fourth Man] 20k.
– 20 K, okay. – [Fifth Man] Ten thousand.
– Ten thousand. Ten thousand. – [Second Woman] Half a million – Half a million, yes. So, we’re talking anything
from, from anything, so depends on your comfort level, some people might say, “Oh, it’s three thousand, or
five thousand, or 10 thousand”. So, what I’m going to share with you today applies from as little
as three thousand dollars to as much as, it can be
half a million dollars, even a million dollar contract. A lot of the strategies and
the tactics that would apply, have sold everything in between as a $2,000 thing, $5,000 thing, $10,000 thing. Last year, my business
partner, we sold a contract to a pharmaceutical
company for $800,000 U.S. One sale. $800,000 U.S. So, it’s the same. What I’m sharing with you, it’s the same. It’s the same psychology,
the same ideas would apply. So don’t feel like, “Oh, Dan what you’re saying
may not exactly apply to me”, it’s the same, okay? So, let me go through the seven reasons why you want to sell high prize
products and services that you might not aware of,
you might not aware of. First reason, reason number one is, more profits and less what? Hassle, less hassle. When you sell a high ticket item, you make more, higher profit margins. Everybody knows that,
but here’s the thing. Within your marketplace,
most of your competitors, my guess is, they’re not comfortable, selling at a high price. Or they don’t know, how
to sell at a high price. So, very few companies, notice, yes, “Dan, there are companies that do well, selling, low margin
products, such as Walmart.” Right? It’s Walmart. But you notice, if you look at history, before
Walmart, there was Kmart. Where’s Kmart? – [Crowd] Gone. – Gone. Before that, there
was Sears? Where’s Sears? – [Crowd] Gone.
– Gone. – [Man] Almost gone. – Almost gone, barely breathing. So, what happens is, when you are selling at a low price, when you’re in the commodity business, when you’re selling to the general public, the problem with low price is this, it’s not a sustainable
advantage, in business. Write this down. Competing on price, is not a sustainable
advantage in business. Because, it’s very, very
easy, for someone incoming, to your space, and say,
“I’ll charge you less. “You charge x, I’ll charge y.” So, your advantage of “Oh, we
guarantee the lowest price,” some morons, could come in and say, “We’ll sell 20% less than you.” Your advantage, it’s gone instantly. Okay, and they could maybe. How the hell do they do that? I mean I’m barely making a profit. Well, a lot of companies, they
go into marketplace knowing, they’re basically using
their capital, and say, “I’m gonna grab market share, “I’m gonna acquire these
customers at a loss. “Just to put you out of business. “Just to put you out of business.” They might know, “Well, you
probably won’t last six months, “we have enough cash to
last one year, you’re gone.” When you’re gone, then they become the
game in the marketplace, and then they jack up their price again. So, and also customer infrastructure, to serve more clients, at a low price, requires, bigger, more infrastructure, i.e. more customer service,
bigger office, more people, more shipping, handling,
everything, it’s more. So, it requires a more
complex infrastructure. Personally, and this is
my personal preference, I like to keep my business
lean, mean and simple. I’m not a big fan, and I know
people make a lot of money doing that, and that’s kudos to them, just my personal preference,
I like to keep my business, lean, and mean, and simple. If I can hit my goal, my financial goal, with 1,000 customers, versus 10,000 customers,
I prefer 1,000 customers. If I can hit my goal with a 100 customers, I prefer 100 customers,
than 1,000 customers. So, more profits, less hassle. But here’s the cool dollar help, business is a game of margins, not volume. In fact, repeat after me. Business. – [Crowd] Business. – Is a game of? – [Crowd] Margins. – Not Volume.
– [Crowd] Volume. – Some entrepreneurs say, “But Dan, I’ll make it up in volume. “And I’m doing half a million,
my margin is like this. “Oh, if I make three million,
then my margin would go up.” Don’t bet on that. Don’t bet on it. Do not bet on it. So, business is a game
of margins, not volume. I was watching, how
many have seen the show the Profit? If you guys have not seen
the show, watch the show. I don’t watch a lot of TV, but
that’s a great show to watch. It’s like a mix of, Kitchens Nightmare, combined
with Shark Tank, Dragon’s Den kinda, type show. So, the Profit, was watching
one of the episodes, so basically, Marcus, who
is the CEO of Camping World, he goes into these business,
and try to fix them, and help the business owner, he would put in the money, but he’ll also put in the time and effort,
and invest his expertise in turning around the company. One of the episodes I was watching, Marcus, went to this meat packing business. The business, the meat
business, has been around for many, many, many years, I
think if I remember correctly, 75 years, or something like that. They’re doing 50 million
dollars a year in sales. 50 million. Is that a little bit of money,
or is that lot of money? – [Crowd] Lot of money. – Right, 50 million sales, 400
grand in losses every year. “You might think, “How the
hell could a company do “50 million dollars a year in business, “and yet, lose 400 grand.” And also, they’re four
million dollars in debt. In debt. In loans, and everything else. And when Marcus looks, he
looks in that guy’s business, he has 30k, 30k, 30 grand, cash in the bank. To say that the business is in trouble, is an understatement, okay. So, if you think, “Wow, 50
million dollars in sales.” So, because business is
game of margins, not volume, it doesn’t mean anything. This business, is so close,
when Marcus looks at number, they’re weeks, weeks away from bankrupt. Weeks away. 75 years of history,
weeks away from bankrupt, so think about that. So guys. (crowd laughs) Do not believe what the ladies tell you, because size matters. Size matters, okay. I’m talking about transaction size, some of you are thinking
about something else. Transaction size matters, it does matter. So, let’s take a million
dollars as an example. So, to make a million bucks, you have a few ways you could do, let’s say, if you sell
a $25 dollar product, you get 40 thousand customers,
you make a million dollars. Yes.
– [Crowd] Yes. – Or you sell $50 product, you sell to 20,000 customers, you make a million dollars, okay. Or $100 products, 10,000
customers, a million dollars. Or, $1,000 product, 1,000
customers, a million dollars, or $10,000 product, only a 100
customers, a million dollars. Now, you might be thinking, “But Dan a $100 “versus $10,000, “does that mean, it takes
a hundred times for effort, “to make a $10,000 sale,
versus a $100 dollar sale.” What do you think? – [Woman] No. – No. No. Because, think of in terms
of to sell that $100 product, do you say you have to do marketing? There’s due cost involved. And to get that $10,000 customers, nowadays, costs money. I don’t care what you
sell. It costs money, to acquire the customers. $10,000 on the other hand. Well, I only get a 100
customers, to get to a million. And what if I don’t get a 100
customers, I get 80 customers, it’s still 800 grand.
Does that make sense? So, look at this numbers,
and look at them, from your business. Look at your business, where you’re at. “Huh, yeah man, I’m selling a $50 thing, “shit, I need 20 customers,
to make a million sales.” Revenue, not profit,
just to hit a million. Or if I wanna sell something, “What if I can increase the price, “if I can sell at a premium price, “how would that affect my business?” So let that thing sink in a little bit. – [Announcer] 10 times your finances. 10 times your business. 10 times your marketing. 10 times you life. Hit the subscribe button now.

79 Replies to “Why Business Is A Game of Margins, Not Volume – How To Sell High-Ticket Products & Services Ep. 1

  1. Thank-you for this video and for bringing Dan Peña in to our lives. I can see Dan Peña in you and I am bringing the Dan Peña out in myself too. Thank-you

  2. Dan,
    Even Woolworth requires honorable mention since it was the epitome of the epic five and dime store, where everything costed
    5 cents or 10 cents. This is where the Dollar Store chain took it's business model. Sam Walton also revamped the Woolworth model as well. Great video BTW!! Thank you!

  3. Do you ever come to London …? I knew you have spent time with Pena in his castle…..in Scotland …what about us here UK.

  4. Well Dan is to the point and no messing….simple and straight forward like he sayings the other people that teach you all this crap is broke, digusted, and busted….themselves….teachers broke, professor's broke…the bloody list goes on what a con….? We have been fooled all this time…..wake up wake up….

  5. Awsome video! Dan you´re more likely to charge Value Aggregate Taxes – VAT – than Euro government… so much value added here!

  6. It's so simple and obvious, yet so easy to not realize and be aware of this principle… great insight Dan! I'm a student of yours in your 7-week course and am absolutely eye opened by the radical shifts I've been discovering through immersing myself in your work. Excited to continue to grow!

  7. I've understood that SIZE MATTERS and most competitors are not comfortable selling high ticket products. Competing on price in not a sustainable advantage in business. Got it Sifu.

  8. Years ago one of my dad's friends who owned a small Chinese takeout restaurant, he upped his price and detered bad customers off. His revenue stayed about the same, but his profit margin was up and there was less work. Some people thought he was crazy for wanted to get rid of some of his customers.

  9. Selling high end , when customer Walks in the doors they have the money , only questions they ask is what colors do you have ….

  10. Thank-you Sifu Dan for this wonderful video. I am re-watching my Daily 10 Videos by playlists so I can better understand each subject and I can take better notes.
    Thank-you Sifu Dan.
    Yes! Daily Video#6 Completed 5/11/18. Thank-you Sifu Dan.

  11. Ok so you have to be less desperate to shed the tirekickers to show your clients and have them respect what you offer to the market. Failure to do so keeps you stuck in a rut and stuggling to single handedly get yourself out of the quicksand. Don't sell more, sell bigger!

  12. Completing on price, is not sustainable advantage in business, More profits, less hassle, Business is a game of margins, not volume and size matters.

  13. Dan, How can I start coaching without any testimonials ou experience? I really have the mindset and the through thought process, but just can't get through that.

  14. Here's a question which makes coherent sense. What is something that you are willing to pay for that you've not already got?

  15. Thanks Dan for sharing… Same I am doing in business… but many people told me that I am wrong but after watching this video you proved me Right and appreciate it… now i will increase price again… Thanks a lot again Dan…

  16. I wish I knew this before I started my company. Feels like I am slaving away for nothing. Thanks for the knowledge!

  17. That voice over at the end "10x your life" etc. It was so cheesy! hahaha.

    I'm loving your channel though. One day when I'm rich and successful, I'll thank you in person. Count on it.

  18. You can make money either way… if you have the right ideas along with the right mentality you can be profitable… look at mcdonalds Walmart taco bell

  19. It is also better to have a bigger customer base because you can sell more products and services to the same customers. Thats why marketing people make money. They have a big list ofcustomers

  20. I love Dan's sales videos but in this video he's basically doing maths that a 12 year old can do. $100 x 10,000 = 1m or $10,000 x 100 = 1m. Isn't that a little obvious? How many businesses can actually sell a $10,000 product though. I'm running a social media agency. Even though all my results are transparent on my Instagram. People still hesitate to spend £500/month

  21. Keeping your business, "lean and mean and simple." I love this! I call it Simplicity Theory. Great Stuff!

  22. Your also at risk of losing a bigger percentage of your earnings if you lose or upset a single customer.

    Of course hes right. Just wanted to add the point. Lol. But of course thats why hes a millionaire business owner and im worth 7 dollars. Lol. He takes risks and runs businesses. I watch him talk about making millions and running businesses…. lol.

    Good video/talk man. I also enjoy Marcus on the profit.

  23. A bit vague with little to not actionable insight. All good to say increase the price, but if the customer is not willing to pay in that market space, you are shooting yourself in the foot.

  24. Some of the richest men to have lived made money on volume… For example : Sam Walton (Walmart), Jeff Bezos (Amazon), What do make of that…

  25. I have upped my prices and get better clients/ customers. The cheaper you are, you attract cheap people! Thanks Dan !

  26. I have already commented in one of your videos that i am one of your greatest fans. You indeed are KING in your chosen field but may i respectfully and very humbly say that Kings and Presidents donot use double meaning sexual jokes from public platform.
    With Regards.
    B. B. Sharma.

  27. Henry Ford proved that 3 quick nickels beats one slow dime. It still works. Plus you gain market share.

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