When developing products, enterprises should not only examine the market demand, product characteristics, and platform characteristics, but also examine the various costs of the product. Effective cost analysis is a basic element for enterprises to succeed in the fierce market competition.
As a cross-border e-commerce enterprise, when developing products, the profit that needs to be calculated and analyzed mainly refers to the sales profit of the product. Simply put, the product sales profit is the balance after deducting the production cost (purchase cost) and the sales expenses of the cross-border e-commerce platform from the product sales revenue. It can be said that whether the cost analysis can be carried out correctly plays a very important role in whether a company is profitable, that is:
Product sales profit = product sales price – product cost – sales expenses
When developing products, it is necessary to calculate the sales profit of the product. Only when the product profit meets the requirements of the enterprise, it can be said that the product has a higher development value. As can be seen from the above formula, the factors affecting the product sales profit are the product sales price, product cost and sales expenses. If the product profit cannot meet the requirements of the enterprise, then the enterprise needs to make further operational decisions, such as whether to increase pricing or reduce costs and expenses to increase profits, or directly give up the development of the product.
The main functions of product profit analysis for enterprises are as follows:
(1) It helps improve the forecasting and decision-making capabilities of enterprises, so that enterprises can correctly evaluate the expected market performance of products; it can provide clear ideas for product development decisions, avoid blind decisions, and help reduce business risks.
(2) It helps enterprises discover product problems, thereby optimizing and improving them and tapping product potential. Through measurement and analysis, enterprises can clearly see the impact of products on profit targets, and then enable enterprises to make scientific decisions.
(3) It helps enterprises improve their control in the fierce market competition and avoid making wrong decisions due to unclear ideas in complex big data.