How to accurately price AliExpress products? — From factor analysis to specific calculations
In the process of publishing a product, after writing the title and selecting the corresponding attributes, the seller needs to start pricing the product. Pricing is very important, because pricing not only affects click-through rates, rankings, and conversion rates, but if scientific pricing methods are not adopted, it may also lead to losses for the product. So, what information is needed to accurately calculate product prices?
Required preparations
- There are products suitable for sale on AliExpress;
- Have an AliExpress account and have completed the real-name authentication of the account;
- Complete the product selection work and design the title of the product;
- Complete filling in product attributes;
- Complete uploading the main product image.
Operation skills
Understand the factors that affect pricing
Before calculating the price, the seller carefully thought about what factors needed to be considered. At first, he thought of product cost, international shipping costs, platform commissions and profits, but he always felt that something was missing. After being reminded by a friend, he learned that the factors that affect product pricing are not only the above four factors, but also need to consider sales strategy, purchase quantity, measurement unit, discount rate and competitive product price. The profit margins of different products and different industries are different, and the discount rates for popular models, traffic-generating models, and profitable models are also different. There are two most basic sales strategies: one is to create hot products to drive sales; the other is to fully price.
Accurately formulate pricing formula
Logistics costs, discount space and profit margins have a large impact on pricing, so be sure to take them into consideration when calculating product prices. For consumers, everyone likes products with free shipping, so the shipping cost must be included in the price. For new stores, discount activities are an effective means of attracting traffic. This part also needs to be reserved in the price in advance, and discounts and free shipping are used as elements to attract customers. In addition, the cost-to-gross margin cannot be ignored – this is the ratio of gross profit divided by costs.
The specific calculation formula for commodity prices is as follows:
[Commodity price = frac{[(commodity cost + logistics cost) times (1 + profit margin)]}{[(1 – platform commission rate) times reserved discount rate]} / exchange rate]
It is worth noting that the exchange rate cannot be the exchange rate of the day, because the collection time is usually one month later. If the U.S. dollar exchange rate drops, it will lead to losses. Therefore, a safer value should be chosen based on recent exchange rate conditions.
Calculate product price
Assume that the seller is about to put on the shelves a girl’s dress numbered GW02. The product cost price is RMB 28 per piece, the shipping fee is RMB 12 per piece, the expected gross profit margin is 40%, and the reserved discount is 80%. The platform commission is 5% and the exchange rate is USD1=CNY6.00. The price of this dress is calculated as follows:
[Commodity price= frac{[(28 + 12) times (1 + 40%)]}{[(1 – 5%) times 80%]} / 6 = USD12.28 ]