I will talk about my understanding of “small and beautiful” from the projects I have seen and come into contact with.
The first is the product level. “Small and beautiful” companies focus on a relatively niche field at the product level, and the SKU is relatively streamlined. They will make products with high cost performance.
The second is the platform level. “Small and beautiful” sellers are mainly platform sellers. At present, more and more Amazon sellers are the main ones. The platform is relatively single, and they may only choose one platform, Amazon or eBay, or some other platforms.
The third is the profit level. That is, high gross profit, which is also caused by the product.
The fourth is the operation level. The turnover rate of goods is relatively high, and some operational adjustments are made very flexibly according to the platform rules and regional policy adjustments.
The fifth is the development scale level. The performance scale of the seller company is developing very fast. It may be hundreds of thousands of dollars last year, and it will be one or two million dollars or four or five million dollars this year. The target of sellers with better performance, that is, the “small and beautiful” sellers we define, is to achieve monthly sales of one million to five million US dollars, and the monthly sales growth is maintained at 100% to 200%.
The sixth is the standardization level. “Small and beautiful” enterprises are relatively small in themselves, and standardization is very necessary.
The seventh is the development space level. From the perspective of the capital market, the development space of such “small and beautiful” companies is not particularly large.
Investment requires early, mid-term and long-term judgments. In the short term, “small and beautiful” e-commerce sellers still have a relatively large space, and it is enough to master a few core points. But in the long run, there are definitely many mountains to climb before sustainable development. I will roughly summarize the core points we need to look at in investment projects.
Let’s start with the short term. In the short term, I will use 5 “W” and 1 “H” to explain. The first “W”, that is, “Why”, you need to understand why the platform’s rules and policies are formulated in this way. Only by knowing why the platform has formulated such rules and policies can we better adapt to the platform and become bigger and stronger on the platform. The second “W”, that is, “Where”, which region and platform you want to do it on. That is to say, after you understand the rules and policies of multiple platforms, you have to choose which platform to do it. The third “W” is “What”, what to sell. This involves the question of how to deepen and expand your supply chain and SKU, which is a dynamic balance. The fourth is “Who”, who sells. Enterprises or sellers must know how to train employees, how to train talents and how to manage talents. The fifth is “When”, at what point in time do you take out your things, and this time point must be grasped very accurately, otherwise you will become a “martyr” if you do it too early. 1 “H” is “How”, how do you sell, which involves how to do some details of your operation, marketing, logistics, warehousing, etc.