This article summarizes what pricing should involve, in a formulaic form, to help everyone set the price within a reasonable range.
For convenience, the author separates the pricing of FBA sellers and FBM sellers for formulating.
1. FBM seller pricing formula
FBM seller product selling price – product cost + cross-border shipping + platform commission + expected profit + promotion marketing + others:
It should be noted that the product cost here includes all costs of the product, that is, all costs of production or procurement plus domestic freight, packaging, etc.
Cross-border freight charges require different prices depending on the channels used. You can consult your logistics provider in advance on this point; please check the platform commission based on the percentages of different categories provided previously. The expected profit is the profit value we hope to get from this product; promotion and marketing are the promotion funds we are prepared to spend on this product; the rest are the miscellaneous costs such as labor, taxes, operations, etc. that we need to bear.
2. FBA seller pricing formula
FBA seller product selling price = product cost + platform commission + FBA first-leg fee + FBA fee + warehousing fee + expected profit + promotion marketing + customer service Cost + Others. It should be noted that there are several contents in FBA pricing that are different from FBM. First of all, the FBA first-leg fee refers to the shipping fee incurred by sending a batch of goods from China to the Amazon warehouse. Secondly, FBA fees include FBA postage and sorting fees. Because Amazon’s storage fees will change every year or even every quarter, please make your own estimate based on the storage fees announced by Amazon. Especially during the peak season, general storage fees will increase significantly, and sellers should pay special attention to it. Regarding customer service costs, since the return and exchange rate of FBA is very high and cannot be controlled by the seller, the seller must set aside a certain cost for customer service based on the actual situation. Note: “Customer service” here is not a noun, but refers to the action of “carrying out customer service”.
The above is the basic pricing formula for products in different channels. After completing the pricing according to the basic formula, you can then make adjustments based on the pricing method mentioned above and combine it with your own business strategy, and pay attention to the effect of the adjustment in a timely manner. Don’t regard adjustment as the goal. Our ultimate goal is to generate sales. This is the key point.