During the operation process, many small and medium-sized sellers always lament that low-priced goods have no profit, and high-priced goods are out of control, so they lose their direction. For new and small sellers, it is recommended to use low-cost trial and error, and low cost means that only low-priced goods can be selected. So can low-priced goods be made? If so, how can they be operated to achieve profitability?
Here, the seller takes a low-priced product created by his own operation team as an example for detailed explanation.
A product operated by the seller’s own team is priced at only US$4.99, and orders are placed steadily every day, maintaining a certain profit. Some sellers find it incredible that the price of US$4.99 includes procurement costs, first-leg logistics costs, and the Amazon platform deducts platform sales commissions and FBA fees. How can there be any profit? Let’s calculate it below. It should be noted that when operating an Amazon store, the seller’s goal is to make a profit, and try to ensure that each product can achieve stable profits after being created. This is also the operating philosophy of our team. As for product selection, every product selected by our team adheres to three points: winning by rigid demand, Tian Ji horse racing, and staying away from infringement. Our product selection and operation are strictly carried out according to this standard.
Next, we analyze this product priced at $4.99.
Purchase price: 2.41 yuan/piece (if you look carefully, you can find a lot of such products on the 1688 website, and you can refer to the selection method mentioned in the product selection chapter).
Product weight: 75 grams. If you send commercial express, the freight is about 35 yuan/kg; if you send by sea, the freight is only 10 yuan/kg. Our team uses air + sea transportation when shipping. At first, air transportation is used for small quantities, and after stable operation, it is basically shipped by sea. A simple calculation shows that the most expensive FBA first-leg logistics cost is 2.60 yuan/piece, while the later sea transportation cost is less than 1.00 yuan/piece.
In FBA first-leg logistics, each shipment will be split and combined according to the total weight of the goods at that time. As long as the minimum weight standard of express + air transportation is met, express + air transportation will be used; if air transportation + sea transportation can be used and it is not expected to cause midway out of stock, air transportation + sea transportation will be used. After the operation and sales are stable, the goods are basically shipped by sea transportation.
Sellers often emphasize that it is difficult to make a penny, but it is relatively easy to save a dollar. In the first-leg logistics of FBA, as long as you calculate carefully, it is the most likely place to save costs.
In terms of product packaging, the seller team has always adhered to the principle of extremely simplified packaging. On the basis of ensuring safety and no damage during transportation, the packaging is as simple as possible. Because no matter how the packaging is, the Amazon FBA warehouse will re-package the goods when processing the order. No matter how exquisite the packaging is, for consumers, it is the inner packaging when receiving the goods.
Extremely simplified packaging can save packaging costs on the one hand, and freight costs and FBA fees on the other hand.
Therefore, our products are packaged in simple PE bags. The purchase cost of a single PE bag is only a few cents, which is almost negligible. This packaging does not increase weight or cost.
Let’s look at the FBA fee. Because the product is light in weight and small in size, it is a small item, and the height of the packaged product is less than 1.9cm, which is within the range of Amazon’s small standard parts, so the FBA fee is relatively cheap. At a price of $4.99, the commission plus FBA fee is only $3.16.
Here is a point of knowledge for readers: When using FBA to ship, the goods will be divided into standard parts and small standard parts according to their weight and size. For lighter and smaller goods, sellers can also choose the FBA light and small plan. The FBA fees for the three shipping standards are quite different. If sellers can properly match the three shipping methods according to the weight and size of their own goods in operation, they can save a lot of money. In terms of operation, both opening up and saving money are indispensable.
From the details listed above, we can know that at the price of $4.99, after deducting the commission and FBA fees, there is still $1.83. According to the current exchange rate, after deducting the cost of getting the goods and the first-leg fee, there can also be a profit of more than 7 yuan.
This product is relatively unpopular, with a BSR ranking of around 20 and a daily sales volume of around 20. After the initial promotion, the daily advertising cost has been controlled to less than $3. Compared with the lowest selling price of more than $6.5 of competitors, as the BSR ranking of this product further rises, there is still a lot of room for improvement in the price of the product.
Some sellers may say that even so, the total profit is not much. This is true, but considering that the total investment in this product is not much, the input-output ratio is still good. It can be said that if a new seller can create products according to the above ideas, even if the single product does not make much profit, it is enough to have confidence in the subsequent operation.
If the layout can be reasonable, a store can release about 10 products, and accumulate three or five small hits, then a profit of about 50,000 yuan a month can be achieved.