[Background of the problem]
In the process of releasing products, after writing the title and selecting the corresponding attributes, Liu Jing needs to start pricing the product. Pricing is very important because it affects click-through rate, ranking and conversion rate. If a scientific pricing method is not adopted, the product may lose money. So what information do you need to master to accurately calculate the product price?
[Preparation required]
1. Have products suitable for sale on AliExpress;
2. Have an AliExpress account and have completed the identity verification of the account;
3. Complete the product selection work and design the product title;
4. Complete the product attribute filling;
5. Complete the upload of the main picture of the product.
[Operation skills]
1. Understand the factors that affect pricing.
Before calculating the price, Liu Jing carefully thought about what factors he needed to consider. At first, he thought of product costs, international shipping costs, platform commissions and profits, but he always felt that something was missing. With the reminder of his friend, he learned that the factors that affect product pricing are not only the above four items, but also sales strategies, purchase quantity, unit of measurement, discount rate and competitive product price. The profit margins of different products and industries are different, and the discount rates of hot-selling, traffic-generating and profit-making products are different. There are two most basic sales strategies. One is to create hot-selling products to drive sales; the other is to fully implement the price.
2. Accurately formulate pricing formulas.
Logistics costs, discount space and profit margins have a great impact on pricing, so be sure to consider them carefully when calculating product prices.
For consumers, who doesn’t like free shipping? The shipping cost should be included in the price. For new stores, some discount activities are needed to attract traffic, and this part should also be reserved in the price in advance, using discounts and free shipping elements to attract customers. The cost-to-gross profit margin cannot be ignored, that is, the ratio of gross profit divided by cost. ?
Product price = {[(Product cost + Logistics cost) * (1 + Profit margin)] / [(1-Platform commission rate) * Reserved discount rate]} / Exchange rate
It should be noted that the exchange rate cannot be the exchange rate of the day. The payment time is usually one month later. If the US dollar exchange rate drops, it will lead to losses, so a safe value should be selected based on the recent exchange rate.
3. Calculate the price of the product.
Liu Jing is about to put on the shelves a girl’s dress numbered GW02. The product cost price is RMB 28 per piece, the freight is RMB 12 per piece, the expected gross profit margin is 40%, the reserved discount is 80%, the platform commission is 5%, and the exchange rate is USD1=CNY6.00. Therefore, the price of this dress is:
Product price = [(28+12)*(1+40%)]/[(1-5%)*80%]/6=USD12.28