Each e-commerce platform will organize unique large-scale promotional activities, such as AliExpress Global Double 11 and Amazon Prime Day. In addition, e-commerce platforms will also carry out promotional activities of different scales in conjunction with local festivals. During the event, platform traffic and sales will increase significantly. Sellers should actively participate in platform activities to increase sales.
Promotion is a double-edged sword. Some people make a lot of money by doubling their sales, while others suffer profit losses due to improper cost calculations. How to discount and how to maintain profits after discounts? Smart sellers should plan in advance for promotional activities and strategically discount, attract traffic and sell.
Commodity Structure
There is a profession in the world called Buyer. An excellent buyer should have data analysis capabilities, product planning capabilities, supply chain management capabilities and A certain marketing concept. The person responsible for product selection in the cross-border e-commerce industry is doing the job of a buyer. They must not only judge market conditions, but also plan the product structure. Usually, a store will divide products into three categories according to their functions: traffic-draining models (hot-sale models), profit models, and image models.
The function of traffic-draining items (hot items) is to seize the top position in search rankings as much as possible, increase exposure opportunities, attract traffic to the store, and drive sales of other products in the store. Once a traffic-draining product has stable daily sales, it can be called a hot product. Drainage products are usually cost-effective products and suitable for most consumers. For example, if it is a women’s clothing store, the sales models are usually classic styles that are suitable for most women, and they provide multiple color options, and the pricing is lower than similar styles in the industry; if it is an electrical appliance store, the sales models are usually only Items that have basic functions and are cheap.
The function of the profit payment is to obtain higher profits for the store, so the pricing will be higher than the pricing of the traffic payment. For example, profit models in the electrical appliance category will add additional advanced functions, such as LCD screens and automatic sensors, on top of the traffic-driving models. If buyers like these functions, they will spend more money to purchase them, and the extra This part of the money is a higher profit for the seller.
The function of image style is the brand positioning of a store. It is the style with the most complete functions and the highest price of a brand. For example, a fashion luxury brand usually has haute couture, haute couture/luggage, makeup and skin care products. Haute couture is the image model, haute couture/luggage is the profit model, and makeup and skin care products are the volume-draining models.
AliExpress sellers usually set the proportion of traffic-draining models (hot-selling items) at 30% to 50%. Sellers may hope to have as many hot-selling items as possible, but creating hot-selling items requires costs and needs to be accurately identified. There are market opportunities, so it is impossible to sell all the products at a high price. At this time, it is necessary to add other product types to improve the product structure of the store. Only product types that are related to each other are suitable for matching sales. If buyers can buy all the required products in one store, the unit price will naturally increase. At the same time, too many types of goods will increase the difficulty of inventory management. Sellers should continue to optimize inventory management according to their own circumstances.
Product Pricing
Before calculating pricing, you should fully understand all costs of the product. Cost = product cost + international shipping + commission + others. Each factor in the formula is subject to variability.
The cost of the product refers to the cost of the product itself. In addition to the purchase cost, it also includes the cost of packaging the product, the freight required for transportation from the supplier to the seller’s warehouse, the possible probability of damage and the risk of loss of the logistics package. wait.
International freight refers to the international freight for sending the package to the buyer. If it is an overseas warehouse, you also need to calculate the first-way freight and customs clearance fees for transporting the goods to the overseas warehouse, as well as the warehousing stored in the overseas warehouse. fee and packaging service fee. For products with free shipping, these fees should be included in the cost.
Commissions include platform sales commissions, withdrawal fees, affiliate marketing commissions, through-train fees and other marketing fees. Other costs include labor costs, rent, water and electricity bills, etc.
Pricing = cost + profit. When considering profit, you should reserve room for discounts in advance. When sellers participate in AliExpress platform activities, they will require at least a 50% discount, so theoretically the profit should be at least 1 times the cost, that is, pricing = cost x ( 1+1). If a buyer purchases multiple items at one time, will the freight cost shared equally for each item be reduced? In order to make the traffic-generating products more competitive, the profit ratio can be appropriately reduced, such as pricing = cost x ( 1+0.8); and for profit-making products, the profit ratio can be appropriately increased. To sum up, the profit ratio can be roughly 0.8 to 3 times the cost.
A product will have three price states: shelf price, which is the price filled in when uploading the product, which can be understood as the original price; sales price, which is the price displayed after discount; transaction price, except for the discount of a single product In addition, the store will also conduct marketing activities such as instant discounts. Therefore, there will be another transaction price when the user finally places an order and pays.
When there are a large number of products, it is impossible to calculate the pricing for each product in turn. It is best for novice sellers to develop a price calculation table based on their own cost situation. Products with different functions use different profit ratios, which can easily Easily calculate product pricing.
After calculating the product pricing, you can go to the platform to check the pricing of other sellers to see whether the price you set for the same product is competitive. We do not encourage price wars. If other sellers have already lowered their prices, then they should consider making differentiated products, that is, “I have what others don’t have, and I have the best when others have them.” Look for high-quality products and strive for reasonable profits. Only in this way can we continue to develop.
Promotion plan
A marketing campaign requires the collaboration of different teams inside and outside the company. Even if it is a small team operation, try to write down the plan so that it can be prepared and executed stage so that no necessary links are missed. You can consider the following aspects when setting up a promotion plan.
1. Determine promotion goals
There is a clear difference between the final results of promotion activities with clear goals and those without goals. When determining goals, there should be an overall goal and sub-goals. For example, the overall goal of this year’s “Double 11” store is to achieve sales of US$50,000, the sub-goal is to achieve sales of US$30,000 for three main products, and to achieve sales of US$20,000 for other products. million dollars in sales. According to the above sales target, it can be further refined into a traffic drainage target: the unit price of the store in the past 30 days is 25 US dollars. To complete the sales of 50,000 US dollars, 2,000 customers need to place orders. The average conversion rate in the past 30 days is 4.1%. That is to say, approximately 49,000 visitor traffic needs to be introduced to achieve this. Allocate the overall goal of traffic drainage to each channel so that each channel person in charge has clear sub-goals.
2. Do a good job in product stratification
Choose products with large sales volume, high conversion rate, and good customer feedback as the main products. Use these products to attract traffic and sign up to participate in the platform’s big promotions. flash sale event, or participate in the 50% off boutique event at the platform’s main venue. The discount for the main products is generally 40% to 60%. In order to promote the sales of the entire store, a 15% to 30% discount should also be set for other products.
3. Set preferential policies
Set an attractive discount for the main products. If the usual discount is 40%, you can set the discount during “Double 11” is 50%, and appropriate discounts can also be set for other products in the store.
You can use the store’s independent marketing tools provided by AliExpress to set up instant discounts, coupons and other activities. When setting preferential policies, you must consider the actual costs and do not sell at a loss. The purpose of designing preferential policies is to increase conversions. rate and increase unit price per customer.
4. Plan promotion channels
AliExpress website promotion channels include window recommendations, through trains, various platform activities, affiliate marketing, etc. The promotion resources that can be obtained are listed in on the table, and predict how much traffic each channel can attract, and predict how many sales these traffics can complete based on the average conversion rate of previous stores.
Recall old customers, tap the value of old customers, send preferential information to old customers, and issue targeted coupons to old customers. Develop off-site resources, cooperate with “Internet celebrities”, and carry out social media marketing.
List all available resources in the table, and prepare promotional materials according to the list. Promotional materials include pictures, videos, product links, coupons for specific channels, rebate links for “influencers”, etc. . If not organized into a list, these trivial tasks can easily be missed, causing damage to the entire promotion campaign.
5 Design related marketing
All promotion channels will attract traffic to the main products. If you want customers to buy more products, you must design related marketing and increase stores. Exposure opportunities for other products within the store, or guide customers to browse more products through preferential policies (such as 5 yuan off for orders over 99 yuan) to increase the unit price per customer.
6. Communication skills with customer service
During marketing activities, customers may have some special questions, such as how to use preferential policies, how to use platform functions with new customers, etc. Record the questions that customers may raise into the customer service database in advance to improve customer service efficiency during the event.
7. Coordinate supply and warehousing
Check in advance whether the inventory can meet the demand of the event. If the inventory is insufficient, replenish it in time to avoid the replenishment channel is also out of stock; if necessary, contact the factory When placing an order to produce goods, you must reserve a production cycle, and consider that the factory’s order volume will surge during the event and cannot deliver on time, and reserve flexible time in advance.
During the event, the delivery pressure will also suddenly increase, and the probability of sending the wrong goods will increase. The cost of returning cross-border e-commerce packages is very high. If the wrong goods are sent, you can only pay a high price. Either the shipping fee will be refunded or the price will be discounted to the buyer. No matter which method is chosen, the seller will suffer a great loss. Therefore, it is necessary to set a standard for the delivery error rate to help the delivery team reasonably arrange the delivery process, speed up delivery, and reduce the delivery error rate.