(1) Real-time dynamic update of cost changes
The purchase cost of a product is not static. For production-oriented sellers, when a product is produced more and more, the “mold opening fee” and “marginal cost” (the new cost generated by each additional product) when developing this product will be gradually spread out, and the cost will become lower and lower; for sellers who purchase products from other factories, the more products are sold, the stronger their “bargaining power” with suppliers will be, and the purchase price will inevitably decrease.
Therefore, when making a budget, sellers need to pay attention to the cost changes in real time. On the one hand, it is necessary to count the adjustments of each purchase price; on the other hand, when a product is gradually made into a hit, it is necessary to communicate with suppliers in a timely manner to reduce costs and obtain more profits and competitive space.
(2) Pay attention to changes in freight and budget freight reasonably
Because cross-border e-commerce buyers are in different countries or regions, the freight costs vary greatly. When budgeting freight (before the product is sold), it is a difficult problem to estimate the freight cost, especially the free shipping cost.
In order to solve this problem, the method of calculating the “monthly average weight freight” can be used as the standard for calculating freight during the budgeting process, that is, by counting the total freight, total weight, and total number of pieces of a certain logistics method in the previous month (these three data can be obtained from the logistics company), after simple processing, the average freight value per kilogram of product is calculated, and then this value is used to guide the freight budget for the next month.
Due to the stability of this data in the short term and the relative fixedness of the product structure and the distribution of buyers’ locations, it is reasonable to calculate the “monthly average weight freight”. Using this method to budget freight does not guarantee that the profit level of each order is consistent with the situation at the time of the budget, but from the perspective of the whole month, the actual profit margin of the product after the whole month’s sales is generally very close to the budgeted value.
In addition, this method of estimating freight should also be combined with regular monthly review and updates. For example, the “monthly average weight freight” of the previous month can be recalculated every month to check whether it is consistent with the budgeted expenses of the previous month. At the same time, the newly calculated “monthly average weight freight” is updated to the product budget table of the next month for the convenience of business personnel and sales personnel.
(3) Follow the operating principle of “appropriate tightness” in the budget process
The purpose of the budget is to make prospect forecasts and risk assessments for future sales work, and to guide store sales and stocking. Therefore, in the budget stage, in order to control the estimated risks well, the operating principle of “appropriate tightness” should be followed. For some income-related data, such as sales, rebates, and capital turnover time, a proper cautious attitude should be adopted to prepare for possible risks; for some expenditure-related data, such as costs and various expenses, the estimated amount should be relaxed as much as possible to reserve space for possible additional expenses.
(4) All data should be summarized in a dedicated product sales profit budget table
In order to facilitate business personnel and sales personnel to quickly and accurately calculate the costs, expenses, and profits of all products, and to adjust marketing and pricing strategies in a timely manner, a simple and convenient product sales profit budget table can be designed.