In AliExpress, the two major factors that have an important impact on ranking are sales volume and keywords. The most critical factor affecting sales volume is price. Before talking about price, let me explain the following terms.
?List Price (LP): It is easy to understand. It is the price we fill in when uploading the product.
?Sales Price/Discount Price (DP): It is the price displayed under the store discount.
?Transaction Price (OP): The unit price paid by the user after the final order is placed. Then the direct relationship between these prices is as follows.
Sales Price = List Price x Discount
Transaction Price = Sales Price – Marketing Discount (Instant Discount for Full Purchases, Manual Discount for Discounted Sellers)
By clarifying the relationship between these prices, we can adopt different pricing strategies for products with different positioning. (1) Madman Strategy.
Study the sales prices of sellers and homogeneous products in the same industry, determine the lowest price in the industry, and use the lowest price minus (5%~15%) as the product sales price. Use the sales price to reverse the listing price, and determine the transaction price without considering gains and losses.
The listing price can be determined in the following two ways: ① Listing price = sales price / (1-15%); ② Listing price = sales price / (1-30%).
① This strategy is expensive. You can use a lot of money to create a hot product. It is simple, rough and effective, but it is not sustainable and has high risks.
② This strategy is slightly conservative. You can adjust the discount later to make the sales price return to normal. Both pricing ideas can be sold at a break-even or slightly loss-making level under a 15% discount as a hot product.
(2) Steady strategy.
A more stable way is to calculate the cost price of the product and determine the sales price of the product based on the cost price + profit. After the sales price of the product is determined, the listing price is determined according to the store marketing arrangement.
For example, the product cost is 3. According to the current average gross profit margin of AliExpress (15%), there is also a fixed transaction commission rate of 5% for AliExpress, and a 3%~5% alliance fee generated by some orders. We can deduce: Sales price = 3$÷(1-0.05-0.05)÷(1-0.15)=3.92$. More conservatively, sales price = 3$÷(1-0.05-0.05-0.15)-4$.
Among them, the 5% affiliate commission is not generated for all orders, but considering some marketing investments such as full discounts and store coupons, it is basically correct to use 5% as marketing expenses.
It can be obtained: Of course, the investment in lost packages and dispute losses can also be included. According to the 1% loss rate of postal parcels,
Sales price = 3$÷(1-0.05-0.05-0.01)÷(1-0.15)=3.96$. More conservatively, sales price = 3$÷(1-0.05-0.05-0.15-0.01)=4.05$.
After getting the sales price, we need to consider whether the product is sold through promotion or as a general model. If it is a promotion model, then the calculation is based on the platform’s usual promotion discount requirement of 40%:
Listing price = sales price ÷ (1-0.4), 40% discount in normal times, and up to 50% in promotions. (3) Sold as a general model.
Listing price = sales price ÷ (1-0.3), 30% discount in normal times.
It is recommended that the discount parameter should not be less than 15%, because the discount required by the platform promotion is this number, and not higher than 50%, because a discount that is too large is prone to suspicion of false discounts. According to official statistics from AliExpress, a discount of around 30% is the most popular discount for buyers and is within the reasonable expectation range.
For the 50% discount activity requirement, based on the above pricing model, it is basically equivalent to selling at a break-even price, with no loss or slight loss. If a customer buys two or more, you can make a profit.