What Is a Big-Ticket Item?
A big-ticket item, also referred to as a BTI, is a high-priced item, such as a house or car. In the context of retail stores, they may also refer to products with selling prices and profit margins that are significantly higher than those of other items in the stores. In economics, big-ticket items are sometimes called durable goods or goods that last a relatively long time and provides utility to the user.
Understanding Big-Ticket Items
There is no accepted dollar threshold level that defines a big-ticket item. It depends on the buyer and his or her level of wealth or income. Someone earning $200,000 per year may not consider a $1,000 video game console a big-ticket item, but a consumer who earns $50,000 a year may.
A big-ticket item need not be a luxury product or one purchased with discretionary income since many products that typically fall within this category (e.g., refrigerators and washing machines) are considered necessities. The number of big-ticket item or durable good sales can be an indicator of the performance of the economy and consumer confidence.
Big-ticket items typically refer to items desired rather than needed, such as an expensive gold watch.
Tracking Big-Ticket Items
Durable goods can be tracked on the monthly Manufacturers' Shipments, Inventories and Orders report and monthly Retail and Food Services sales report issued by the U.S. Department of Commerce (commonly known as the "Durable Goods" and "Retail Sales" reports). Note that the durable goods report divides categories by shipments and new orders and is measured in value at the manufacturers' level.
The retail sales report is perhaps more useful because it directly breaks down categories that consumers are familiar with in terms of "big-ticket" items. Motor vehicles, furniture, electronics, appliances, and building materials (for the expensive home renovation that people want) appear in the monthly retail sales report.