Many sellers on e-commerce platforms will offer free shipping to attract consumers. However, for cross-border e-commerce, postage is also a considerable expense. Therefore, sellers need to make comprehensive considerations when setting the price of free shipping products to ensure that they do not lose money while ensuring that the price is highly competitive. When setting product prices, sellers need to consider the following factors:
(1) Product cost
(2) Product quality and volume
This should not only consider the product itself, but also the quality and volume increase caused by product packaging.
(3) Logistics and freight
Mainly includes domestic logistics costs, international logistics costs and registered mail costs; based on operational experience, the price of logistics and freight can be set at 120 yuan/kg. If the delivery is carried out according to China Post Small Parcel, the delivery price of several popular markets on AliExpress is usually not higher than this price.
If the price exceeds this price too much, you can choose Singapore Post, which has a relatively high cost-effectiveness. Normally, the price of dedicated logistics will not exceed RMB 110/kg. Therefore, choosing a price of RMB 120/kg can basically ensure that the seller will not lose money in the logistics process.
(4) Profit margin
The profit margin of ordinary products is usually 20%. Products that are designed to attract user traffic usually have lower profits, and the profits of those super popular brands will be even lower. They may be sold at cost price or even at a loss.
(5) Other expenses
The exchange rate of RMB against other currencies will fluctuate, and the platform will extract part of the commission from the transaction, which will bring additional costs to the merchant. Therefore, this part of the cost should also be taken into account when setting product prices.