Profit margin = ((selling price - advertising / procurement / logistics / operation and other costs) * (1 - commission rate - tax rate - after-sales loss rate))
The difference in profit margin for different products on independent sites is mainly reflected in the gross profit (selling price - purchasing), advertising costs, and logistics costs.
The more popular the goods and the more competitive the category, the higher the advertising cost will be and the gross margin won't be enough to make money.
On the other hand, if the unit price is too low, even if the gross margin of a single order is high, the gross profit will be relatively small, and in this case, it is more difficult and advertising costs to break even. For this reason, many independent site merchants will only choose to sell between $ 50 to $ 200 price range, where goods gross profit and conversion rate are in a good range.
Many newcomers to the industry overlook logistics costs when choosing products, and there are many examples of huge losses due to miscalculations of logistics costs. The calculation of logistics costs mainly contains factors such as weight, volume, and whether it is charged. Weight is taken into account, but factors such as volume and charging may be overlooked in the early stages, leading to the cost being found to be seriously higher than expected when sending the goods.
Key points.
(1) Independent stations try to choose high gross profit goods, and the price can not be too low, the recommended selling price of 50 ~ 200 knife
(2) Try to choose goods that are convenient to mail, to avoid too high costs or more depreciation
【Source text: by report】
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