With the rise of various costs and increasingly fierce competition, many sellers’ operations have become profitable but not profitable. They are busy every day and ship a lot, but after calculating at the end of the year, they find that there is not much profit. In the better situation, there is a slight surplus on the books after the inventory and investment are offset. In the worst situation, the inventory cannot even balance the investment, and there is definitely a loss. Cross-border e-commerce has passed the era of “picking up money everywhere”. Under the new situation, if you want to really make money and put the profit in your pocket, refined operation is particularly important. How can you achieve refined operation? Start with the following 4 aspects.
1. Fine cost control
Many sellers cannot do fine accounting in operation, the cost expenditure is unclear, and the account accounting is also rough. It seems that sales are booming, but there is only a very low profit. If you want to achieve stable profitability in operation, you must do a good job of cost control.
In cost control, office costs are a very important item. Some sellers have too good expectations. They rent high-end and large office spaces according to their expectations, which seem to be classy. However, they do not know that the excessive pursuit of high-end will result in high unit rents. The rented area is too large and cannot be used temporarily, so they have to pay a lot of rent every month. Cross-border e-commerce is an industry that can survive in a low-key manner. There is no need to be overly ostentatious when there are no customers visiting. Excessive ostentation in the office space will only dilute their profits and increase the risk of business failure.
For cross-border e-commerce sellers, logistics and freight account for about 30% of total sales. If you want to control costs in a refined manner, the choice of logistics methods must be taken seriously. Taking the first-leg freight of FBA in the United States as an example, the freight of commercial express (FedEx.UPS, DHL, etc.) is about 35 yuan/kg, the freight of dedicated logistics (air + delivery) is about 25 yuan/kg, and the freight of sea freight is only about 9 yuan/kg. When shipping, sellers can combine the three methods to ensure the delivery timeliness and save a lot of freight costs. If these reduced costs are evenly distributed to unit costs, the profit margin of a single product can be increased by about 20%.
To control costs well, we must carefully calculate every detail that can save money. In the process of coaching students, the author often emphasizes that “it is not easy to make a penny, but it is not difficult to save a dollar.” In addition to saving rent and shipping costs, the choice of payment tools is also very important. There are many payment tools on the market, such as NetEase Payment Wanlihui (WFWorld First), PingPong, Lianlian Payment, etc. The rates of different payment tools vary greatly. Taking NetEase Payment as an example, the official rate of 0.6% is not a small amount compared to some payment tools with a rate of up to 1%. Therefore, choosing a suitable payment tool can also save costs.
2. Employee work efficiency should be improved
At present, the average salary is rising almost every year. In this case, how to control personnel costs?
It is essential to improve employee work efficiency.
Some companies like to recruit as many employees as possible, but this is not the case. If the work efficiency is not high and the per capita output is very low, it is meaningless to have more employees.
There are many ways to improve employee work efficiency. Putting aside the specific management, in terms of staffing, we should adhere to the principle of “3 people doing the work of 5 people and paying 4 people’s wages”. In this way, employees will get high wages, their satisfaction will increase, they will cherish their jobs more, work more attentively, and the work efficiency of the entire team can also be improved to a certain extent.
3. Select products with high quality to speed up capital turnover
Some sellers adopt a large-scale distribution model. The shipment volume of a single product is not large, but because there are many SKUs, the total stock volume is large, and the funds occupied are also large. Because there are many SKUs, it is impossible to create each product in a refined manner during the sales process, so some products cannot be sold, inventory is overstocked, and the capital utilization rate and turnover rate are not high, which increases costs invisibly.
Some sellers also choose large and heavy products because of “low competition” when selecting products. Although the competition is not fierce, they need to be shipped by sea, which takes a long delivery cycle, occupies a lot of funds, and has a low capital turnover rate, which increases costs invisibly.
For cross-border e-commerce sellers, when selecting products, they should try to choose products that are just needed, small and light, easy to pack and can be shipped quickly, so as to reduce costs and increase overall profit margins through high capital turnover.
4. Adhere to the core strategy of creating hot products
The creation of hot products is a typical feature of Amazon store operations. Even 10 products with average sales cannot match one or two hot-selling hot products. It can be said that only with hot products can you survive. Therefore, sellers must do their best to “push” their product rankings to the top of the category rankings. On the basis of carefully selecting just-needed products, you must set the goal of creating hot products in operations. Once there are several hot products in your store, the difficulty of overall operation will be reduced. The hot selling model not only increases sales, but also intensive operations, which can reduce operating costs and increase store profit margins. Therefore, the hot selling model is indispensable in Amazon store operations.