Cross-border e-commerce is essentially a business, but traditional foreign trade has been transformed into the Internet. This makes domestic e-commerce and traditional foreign trade companies feel that cross-border e-commerce is a new thing, and there are also changes in new things. There are rules to follow.
Business needs to be profitable. Some people say that I want to build an internationally renowned brand. In fact, that can only be achieved on the basis of profitability. This section introduces how to calculate the cost of a single product
Every Amazon seller hopes to sell profitable products. High-profit products correspond to higher product quality and better services. Don’t think that Buyers are easy to be deceived, especially buyers in the United States. There are several apps installed on their mobile phones to compare prices!
When launching a new product, you must learn to set a price instead of taking it for granted. Sellers should pay more attention to the prices of competitors. If your product is exactly the same as that of your competitors, then you must make it cheaper or significantly higher than your competitors.
For example, if a competing product sells for $20, you can price it at $19, or more than $25, because this involves buyers’ shopping psychology. Many buyers need cheap products, but there are also many Buyers demand better quality products. A higher product price means that your product quality should be better. Generally, the premise of following this principle is that it corresponds to the main picture of the product. If the main picture of the product is exactly the same, the price must be lower than others; if the price is higher than others . Then the main product image must be more textured.
Once the principles for setting product prices are clear, we need to calculate product costs.
Take the Amazon platform as an example. The cost of the product includes the purchase price, domestic logistics fees, first-leg logistics fees, platform commissions, and FBA distribution fees.
Suppose the purchase price of your product is 30 yuan, the product weight is 500 grams, and the selling price is 30 US dollars (about 191 yuan). The domestic logistics fee is calculated as 1.3 yuan/kg. The domestic logistics fee for a single product is 0.5 kg multiplied by 1.3, which equals 0.65 yuan (the prices of different logistics companies may vary). The first-leg logistics fee is calculated based on the US air freight of 32 yuan/kg. That is, 0.5 kilogram times 32 equals 16 yuan (the specific price changes at any time). The platform commission is 15% of the selling price, that is, 30 times 15% equals 4.5 US dollars, which is equivalent to approximately 29 yuan in RMB. The FBA delivery fee for a single product is US$2-3 (the larger the volume, the more expensive the price), which is equivalent to about 15 yuan in RMB. Then the cost of a single product is 30+0.65+16+29+15=90.65 yuan.
The gross profit margin of a single product is 191-90.65=100.35, and the gross profit margin of this product is about 50%.
The net profit of a single product is 100.35. A certain amount of returns – product advertising fees – company operating costs – 1% of the final exchange loss. If returns and advertising fees are well controlled, the net profit margin of this product is 35%~45%
Some people may say that the cost of marketing and promotion of new products and the cost of unsaleable losses caused by Amazon’s own warehouse have not been calculated. It should be noted that the calculation here is when a single product is put on the shelves. The seller should calculate the total cost.
The general principle is that only when the gross profit margin of a product is above 40% and the net profit margin is above 30%, can this product have development value. If your product’s net profit margin can be controlled at 45% after 3 months on the shelves, it means that your product is popular on the platform and your operating methods are mature.