Since the specific conditions of sellers vary, you can refer to the following 4 strategies and choose the ideas that suit your own conditions to operate, so as to shorten the introduction period.
1. Fast skimming strategy
Fast skimming refers to the promotion of new products through high prices and high promotion costs. This strategy can be considered for products with large market demand and obvious competitive advantages. High prices can obtain the maximum profit per unit of sales and recover investment as soon as possible; high promotion costs can quickly establish brand awareness and occupy the market. Generally speaking, in the product introduction stage, as long as the new product has obvious advantages over the alternative products, customers will not care so much about its price.
2. Slow skimming strategy
Slow skimming refers to the promotion of new products with high prices and low promotion costs, with the aim of reducing marketing costs as much as possible to obtain more profits. This strategy is suitable for products with a small market size and a certain brand awareness. As long as the target customers are willing to pay a high price, the product can steadily obtain excess profits.
Since Amazon platform information is relatively transparent, adopting a high pricing strategy during the new product period is likely to attract the attention of potential competitors, resulting in a large number of homogeneous products flooding the market. Therefore, this strategy is not suitable for products with low wall protection and simple production process.
3. Rapid penetration strategy
As the name suggests, the rapid penetration strategy refers to launching new products at low prices and high promotion costs. This is also the basic idea of the so-called “spiral creation of explosive models” adopted by most e-commerce sellers. Its purpose is to take the initiative and enter the market as quickly as possible to gain the largest possible market share. With the expansion of sales and production, the unit cost of products will gradually decrease, and eventually achieve economies of scale.
The weekly sales histogram of a certain clothing category product shows that the sales in the next three weeks have accounted for more than 80% of the total sales, and the low prices or even losses in the first five weeks can be quickly compensated. The rapid penetration strategy is suitable for products with large price demand elasticity and large market capacity. It can often attract more potential customers to place orders in a short period of time and quickly increase sales.
4. Slow penetration strategy
Slow penetration refers to launching new products at low prices and low promotion costs. Low prices can expand sales, and low promotion costs can reduce marketing costs and increase profits. This strategy can be used to promote products with large market capacity, which will not be saturated in the short term, and with relatively ordinary product styles or improved styles that are popular on the site.
In addition, for products in the introduction period, the overall situation of the market can be judged by analyzing the prices of the top 100 links in small categories, and the pricing strategy can be finally determined.
Most links set a minimum price as the solicitation price, and the lowest price is only $1.62. Calculations show that the average minimum price is $18.5, while the average maximum price is $28.45. The overall competition in the category is fierce. Even if the price is set at $27.81 when there is no profit, the competitive advantage is not obvious. At the same time, clothing is seasonal, so when it is actually put on the shelves, operators can adopt a rapid penetration strategy with low pricing and high promotion costs. Promotion methods at this time can include advertising, promotions, coupons, early reviewer programs, QA, evaluations, etc.