Revealing the Wish profit algorithm and influencing factors: how to optimize the income of foreign trade merchants

With the rapid development of cross-border e-commerce, more and more foreign trade merchants choose to open stores on the Wish platform. In this process, merchants urgently need to understand the profit structure of the platform, especially how to calculate actual profits through profit algorithms, and what factors will affect Wish profits.

Analysis of Wish Profit Algorithm

First of all, to calculate Wish’s profit, merchants need to understand the following basic formula: revenue = price of goods sold – cost. Specifically, the cost of goods can be calculated by the following formula: last month’s inventory + this month’s purchases – this month’s inventory. After getting the revenue and costs, the gross profit can be calculated by “revenue – cost”. Next, the calculation of profit includes: gross profit – business taxes and surcharges – various expenses (such as operating expenses, administrative expenses and financial expense losses), and the final net profit is “profit – income tax”.

Factors affecting Wish’s profits

1. Product Cost
   For foreign trade merchants who are just starting out, products are usually obtained through OEM or direct purchase of finished products, so procurement and transportation costs become important factors affecting Wish’s profits.

2. Product Pricing
   Product pricing is restricted by multiple factors, including procurement costs, market factors and operating costs. Under the market model, if the supply of a product exceeds demand, merchants can naturally raise the price; on the contrary, when market competition is fierce and supply exceeds demand, the price will be lowered. In addition, if the product is about to be replaced, the merchant may need to lower the selling price to clear inventory.

3. Operating costs
   The retail commission charged by the Wish platform is 15%, and a collection channel fee of about 1% is also required. These operational costs have a significant impact on merchants’ profits, and merchants need to consider how to share these costs with consumers in their pricing strategies.

Summary

Through in-depth analysis of the profit algorithm and influencing factors of the Wish platform, merchants can better formulate sales and pricing strategies to improve their profitability. The specific situation of each store is different, so when applying these algorithms, you need to make corresponding adjustments based on your actual situation.