Amazon recently said that it has blocked and deleted more than 39 million advertisements and cancelled more than 13,000 sales accounts that attempted to extort. So here I would like to remind everyone that Amazon cross-border e-commerce sellers should not drive up prices for their own interests, but should establish effective pricing strategies to obtain positive profits.
Since the outbreak of the epidemic, the Amazon platform has never been soft on punishing cross-border sellers who drive up prices, and has been even more ruthless to cross-border sellers who violate regulations. Basically, it is a one-stop punishment by directly removing products from the shelves, closing accounts, freezing funds, etc.
Since the second half of the year, raw material prices have risen sharply, shipping costs have risen unprecedentedly, and the RMB exchange rate has remained strong, and sellers’ profit margins have continued to shrink. Whether it is a boutique seller or a general seller, it is urgent to establish an effective pricing strategy.
Today, I will share with you three effective pricing guidelines:
1. Cost-based pricing strategy
The advantage of this strategy is that it is easy to operate. Cross-border sellers do not need to do a lot of customer and market research to guarantee a certain product profit margin.
All you have to do is calculate the cost of the product you are selling and then add the profit you want.
Remember that the product cost here includes the purchase price of the product, as well as various operating, transportation, and human resource costs.
And the price you add to the cost must be able to maintain the next step of the business operation while making a certain profit.
2. Competition-oriented pricing strategy
With this strategy, your product price only needs to be close to the price set by your competitors. However, as the cross-border e-commerce market continues to expand, you need to keep an eye on the pricing of your competitors’ products to grasp the position of your product pricing in the competition.
3. Value-oriented product pricing strategy
This strategy is more complicated than the above two strategies because cross-border sellers need to price according to the buyer’s definition of product value, rather than according to actual cost. With this strategy, cross-border sellers must not only conduct market research, but also conduct customer analysis.
You need to study the customer’s purchasing behavior, understand the reasons for their online shopping and the product features they value, and analyze how decisive the price is in their purchasing decisions.
Although this strategy is more cumbersome, it also has advantages: it can help cross-border sellers obtain higher product profits and increase product sales overall.