Unlike other sellers who rely on “slightly competitive prices + advertising promotion”, in the process of creating spiral hits, the author adopts the method of “sufficiently low prices + advertising promotion”. The biggest difference between the two methods is the setting of product prices. For most sellers, “It is acceptable to earn less or even break even, but if I have to sell at a loss, sorry, I won’t do it!” The author does the opposite in the process of spiral creation. “Since most sellers cannot psychologically accept losses, no one wants to do it, so I will do it!” The idea of this low-price creation is to let sellers accept temporary low prices or even losses, drive sales with prices, and promote the spiral rise of operations.
For a product with a cost of $8 and a current price of $11.99 on the platform, the spiral hit creation method is used. When the operation is started, the price is set at $4.99, which is almost the lowest price of the product on Amazon, and it has an absolute competitive advantage in price. In this case, as long as the product can be displayed in front of consumers, the strong stimulation of ultra-low prices can easily stimulate consumers’ desire to buy and prompt them to place orders.
After setting the ultra-low price, generally observe for 3 to 7 days. If orders are generated and the orders show a gradual growth trend, it is just in line with expectations; if no orders are generated, turn on the in-site advertising to use advertising to bring exposure and traffic to the product. The author calls this operation “advertising imports traffic, low prices bring conversions”.
At this stage, it is recommended to set the advertising to automatic advertising, because on the basis of product optimization, automatic advertising allows Amazon’s algorithm to automatically capture information in product details and make the best and most extensive matches. Set the product price to $4.99 and turn on automatic advertising. Driven by low prices and active traffic, the product begins to generate orders. At this time, we need to observe whether the orders can grow steadily.
Assuming that 5 orders are generated on the first day, whether the orders begin to grow to 8 or 10 orders per day in the next few days is the key. If the orders grow, it is naturally gratifying and what we expect; if the orders are stable at 5 orders per day and almost do not move, then we have to think about whether the price is not low enough and whether the current price is not enough to drive consumers to buy. When we encounter a situation where orders do not increase, we can try to increase prices slightly and then observe changes in sales. If sales do not change after the price increase and remain at around 5 orders per day, we will continue to increase prices until sales begin to decline. This shows that this price is a sensitive price at the current stage. We can use this price as a critical point and adopt a drastic price reduction to promote sales growth, thereby breaking through the current bottleneck of “stable 5 orders per day”.
Assuming that the product is priced at $4.99, with the price advantage, the number of orders begins to increase gradually at a trend of 5, 8, and 10 orders per day, and the BSR ranking also rises with the growth of sales. For example, if sales increase from 5 orders per day to 10 orders per day, the BSR ranking rises from 1000 to 500. At this time, we can start to increase the price from $4.99 to $5.99.
Since the price of $5.99 is still very advantageous compared to the price of $11.99 of its competitors, sales will often continue to grow and the ranking will continue to rise. For example, sales will increase from 10 orders per day to 15 orders per day, and the ranking will also rise from 500 to 200.
At this time, you can continue to raise the price to $6.99. After the price increase, observe the changes in sales and ranking. If sales are still growing and the ranking continues to rise at the price of $6.99,
For example, sales increase to 20 orders per day and the ranking also rises to 100, then continue to raise the price to $7.99. Some people may wonder why sales will continue to grow after the price increase? Because although the price of the product has been increasing, it is still at a low price compared to the products of peer sellers and is still very competitive. Sales growth and ranking increase bring more natural traffic to the product, and competitive prices drive sales growth and ranking increase.
But sales will not continue to grow like this. According to my previous operating experience, when the price of a product rises to $7.99, that is, when it reaches the break-even point, sales may begin to decline. I call this stage the “price-sensitive range under the current ranking (weight)”. At this time, under the spiral hit model, my solution is to quickly and significantly reduce the price. I call each small increase of $1 in the above price increase process “small steps”, and the rhythm of price increases needs to be “jogging”. After each price increase, observe the changes in sales and rankings for 3 to 7 days. In summary, each price increase should be small, and 3 to 7 days should be left after the price increase to observe the changes in sales and rankings, that is, the “small steps and slow jogging” marked in the model. As for whether the observation period during the price increase process is 3 days or 7 days, my suggestion is that if it is still in the loss stage, it is recommended to observe for 3 days: if the price has exceeded the break-even point and the order has been profitable, the observation period can be appropriately longer, preferably 7 days.
Assume that the price rises to $7.99 and sales volume declines, that is, it enters the price-sensitive range of the current ranking. At this time, the usual approach is to quickly and significantly reduce the price, which can be reduced from $7.99 to $5.99, entering the second round of spiral explosion.
For the substantial price reduction after multiple price increases, the author calls it “advance four and retreat three”, that is, after multiple small price increases, when sales are blocked at a certain price, a one-time substantial price reduction is required to increase sales. Compared with the initial $4.99, the price of $5.99 has increased slightly, but compared with the $7.99 that was blocked, $5.99 is much cheaper. This operation is to use the price advantage to activate a substantial increase in sales.
Generally speaking, a substantial price reduction is reflected in sales volume, which is a substantial increase in orders. For example, at the new round of $5.99 price, sales increased to 30 orders per day. After being stable for about 3 days, observe whether the sales volume is stable and rising, and then raise the price to $6.99, and then raise it to $7.99, $8.99, etc. at the same pace. During the price increase process, if the sales volume is stable or slightly decreased, continue to raise the price.
In this process, it is best to record the sales volume and ranking of each price after each round of price adjustment, and compare these data with the data of the previous round. If the overall data is good, it is benign and you can continue to move forward; if the sales volume drops sharply at a certain price, it means that this price is a sensitive price under the current BSR ranking in the new round of creation. At this time, based on this price, the next round of creation is carried out.
Generally speaking, most products can enter the profit range after three rounds of creation, that is, the product price is profitable and has stable sales every day. At this time, the sales volume may not be enough, and the ranking has not yet entered the top position of the BSR ranking, but the profitable price is a milestone event for most sellers. At this stage, the pace of creation should be slowed down and the price should be kept for about 15 days.
There are two reasons for doing this: (1) Profits are a good thing, and stable profits over a period of time can make up for the losses in the early stages of the creation; (2) For a new product, there are no reviews for the product, and after a period of sales, there may not be much inventory left. Time needs to be left to wait for the next batch of goods to be warehoused and put on the shelves, as well as for the product reviews that may be generated by the early sales.
After the new batch of goods is warehoused and put on the shelves, the products have also received reviews one after another. Sufficient inventory can cope with the greater sales demand in the next step of the creation, and product reviews can also increase the weight of the products, which is more conducive to further promoting the BSR ranking. In the spiral hit creation model, full use is made of consumer psychology and platform algorithm logic, using price as a fulcrum to promote the rapid formation of a hit.