On the platform of Amazon, a global e-commerce giant, every customer’s purchase behavior is related to the profit of the merchant. As an important indicator reflecting the customer’s purchasing level, the average order value is of great significance to the merchant. So, what does Amazon’s average order value mean? How should merchants choose between high-average order value and low-average order value products? This article will explore these issues in depth to help merchants better understand and respond to market challenges.
1. Analysis of Amazon’s average order value
In simple terms, Amazon’s average order value is the average amount of goods purchased by each customer on the Amazon platform. This indicator is calculated by the ratio of total transaction volume to total order volume, reflecting the customer purchasing level of the store or market. The average order value is directly related to the merchant’s profit, so increasing the average order value is an important goal pursued by merchants.
2. The trade-off between high-average order value products and low-average order value products
On the Amazon platform, high-average order value products and low-average order value products have their own advantages and disadvantages. Although high-average order value products have a larger profit margin, they also require merchants to invest more funds and energy in research and development, production and promotion. At the same time, high-priced products face higher return risks and market competition pressure. Although low-priced products have smaller profit margins, they have wide market demand, stable sales, and relatively low operating costs.
Therefore, merchants need to make comprehensive considerations based on their own financial situation, long-term planning, and market demand when choosing products. If merchants have strong financial strength and R&D capabilities, and have in-depth understanding and confidence in the market, high-priced products may be a good choice. If merchants have limited funds or are not accurate enough in grasping the market, low-priced products may be more suitable.
3. Strategies to increase product profits
Whether merchants choose high-priced products or low-priced products, it is crucial to increase product profits. Here are some suggestions:
Reasonable pricing: Reasonable pricing based on product costs, market demand, and competitors’ prices, both to ensure profit margins and to attract consumers.
Optimize product portfolio: Increase the added value and competitiveness of products by setting different numbers of variables and adopting bundling sales.
Consider self-delivery: For lower-priced products, merchants can consider self-delivery to reduce FBA costs and increase profit margins.
Precision marketing: Increase product exposure and conversion rates through advertising, social media promotion, etc., thereby increasing sales and profits.
On the Amazon platform, high-priced products and low-priced products have their own advantages and disadvantages. Merchants need to make choices based on their actual situation and market demand, and adopt corresponding strategies to increase product profits. Through reasonable pricing, optimized product portfolio, considering self-delivery and precision marketing, merchants can stand out in the fierce market competition and achieve sustainable development.