With the continuous development of the cross-border e-commerce industry, more and more foreign trade merchants choose to open stores on the Wish platform. If merchants want to know the income of the platform, they need to calculate it according to the formula. So how is the Wish profit algorithm calculated? What are the factors that affect Wish’s profits?
First of all, calculate the income first. After the income is calculated, calculate the cost and calculate the purchase price of the goods sold above. It is equal to last month’s inventory + this month’s purchases – this month’s inventory. Revenue – Cost = Gross Profit. Profit = gross profit – business taxes and surcharges – losses of various expenses (operating expenses, management expenses, financial expenses). Net profit = profit – income tax.
Of course, when foreign trade merchants open a store, they hope that the sales of their stores will be as high as possible. The higher the sales, the higher the profits will be. Let’s talk about the factors that affect Wish’s profits.
One: Product cost.
Generally speaking, for foreign trade merchants who are just starting out and do not have their own factories to help them produce products, they can only find OEMs or simply purchase finished products directly, so the procurement costs and transportation costs used are The purchase cost of the product. These are all factors that will affect Wish’s profits.
Two: Product pricing.
There are many factors that affect the product pricing of foreign trade merchants, such as the procurement cost of the product itself, market factors, operating costs, etc.
Market factors: Procurement costs are mentioned above. If a product explodes and demand exceeds supply, then merchants have the goods and can naturally set higher prices. On the contrary, if the product is more competitive and supply exceeds demand, the price will naturally fall. When this product appears on the market, your product is about to be replaced. In order to clear inventory, the price of the product will naturally be reduced.
Operating costs: It is worth noting that the Wish platform charges a commission of 15% of the retail price, and the payment channel charges a channel fee of 1%. These two are also very important cost items. For foreign trade merchants, they need to consider sharing this money with consumers through product pricing.
To sum up, Wish’s profit algorithm is to deduct shipping costs and product costs from the product price, and the remainder is the gross profit. The cost of each store is different, so the amount to be calculated in the Wish profit algorithm will also be different. Merchants can calculate the profit based on their actual situation.