Lazada platform store profit calculation and optimization strategy

When opening a store on the Lazada platform, correct profit calculation is crucial to ensure the success of your business. This article details how to optimize your profits by calculating gross profit margin, considering promotional price reductions, and evaluating return and delivery failure rates.

1. Gross profit margin

After completing the cost calculation, the seller can add the expected profit to the final selling price of the product in a certain proportion according to its own pricing strategy. This process can be achieved through the following formula:

[ text{Product selling price} = text{Product cost} times (1 + text{Gross profit margin}) ]

2. Room for promotion and price reduction

After determining the preliminary price based on gross profit margin, further consideration needs to be given to possible price reductions caused by promotional activities. For example, if you plan to promote a product and intend to reduce its original price by 20%, then in order to maintain the original gross profit level of the product, you need to adjust its listing price:

[ text{Product selling price} = text{Product cost} times (1 + text{Gross profit margin}) / (1 – 20%) ]

In addition, considering the free shipping services or “buy more, get more discounts” discounts that the store may provide, these additional benefits should also be included in the product pricing to compensate for part of the lost profits. For example, if the Malaysian site implements a two-piece free shipping policy and the upper limit for each order is 4 ringgits, then the products with such discounts need to add 2 ringgits to the unit price as compensation.

3. Return rate and delivery failure rate

In order to accurately estimate actual operating costs, sellers should also count and analyze the number of returned and failed delivery orders that cannot be resold due to various reasons in the recent past (such as within a month), and then derive the corresponding cost proportion:

p>

[ text{Proportion of buyer returns and secondary sales failure} = (text{Number of orders that failed delivery and could not be resold} + text{Number of orders returned by buyers and returned to the seller’s warehouse}) / text{Total number of orders} ]

This ratio should be considered when calculating various fees, including but not limited to purchasing fees, packaging fees, domestic shipping fees, international shipping fees and payment processing fees, because these fees are generally not refundable to the merchant due to order cancellation. . Specifically, the updated procurement cost calculation method is as follows:

[ text{Purchase cost} = text{Price of purchased product} times (1 + text{Proportion of buyer returns and secondary sales failure}) ]

Country tax exemptions

Finally, when setting product prices and arranging shipments, sellers also need to pay attention to the tariff regulations in different markets. The import declaration value limits for Lazada sites in various countries are:

• Thailand: 39,000 baht;
• Indonesia: 15,000,000 Indonesian Rupiah;
• Vietnam: 1,000,000 VND (certain categories of goods are not subject to this restriction, please consult the relevant industry manager for details);
• Singapore/Philippines/Malaysia: No upper limit yet.

The calculation method of the declared price is:

[ text{Declared price} = text{The selling price of the goods in the package displayed at the Lazada front desk that day} – text{Seller discount} ]

If the declared amount exceeds the above limit, the goods may be intercepted at the sorting center and the order may be cancelled. Therefore, setting product prices reasonably will not only help improve competitiveness, but also avoid unnecessary economic losses.