Recently you must have heard that Amazon started to enter Indian market. This is a great success in the business transformation on Indian’s e-commerce.
Amazon with the rise of sellers, the rapid growth of categories and SKUs, the competition between sellers is increasing, making a difference in operating patterns and differences in tissues. product image on this e-commerce site.
So how can new sellers with certain power find the right method for themselves?
1, FIRST GIANT SKU
The large SKUs mentioned here refer to multiple types of SKUs, not only a large choice in one category, but because of the new sellers, the number of SKUs has been greatly increased before reaching the maturity stage. stability. Therefore, there are certain shortcomings.
Due to the two-week account period of Amazon and FBA or overseas warehouses as well as domestic demand, large SKU sellers have large capital pressure and inventory.
Many sellers will face a situation of out of stock leading to a drop in rankings and surpassing competitors. However, without money to reserve, there is no strong supply chain.
Large SKUs will definitely have a large number of SKUs that don’t sell well or even slow down.
In order to quickly return the money, it is possible to reduce the price regularly or reduce the price greatly, resulting in price instability, affecting the buyer’s experience and getting negative feedback. Even seriousness can damage the brand image.
Quality can not control, each company’s resources are limited, high-speed expansion time, in the context of large SKU, supply chain management or procurement management work will be exhausted, substance problems The amount of product we can say is inevitable.
If it is a manufacturing company, large SKU means continuous development of new products. If the product is not sold well, the decision to stop production and the fixed cost (such as mold opening fee) is very much divided and the cost of training the staff is huge.
Similarly, if it is a trader, the purchase cost of the previous unit will be too high, which will affect prices, resulting in weaker competitiveness, possible termination of product life or misjudgment. Product prospects.
2, VENDORS DO NOT COMPLY WITH THE PRINCIPLE
Whether it’s selling online or opening a store, there are certain rules. The sales process on Amazon is quite simple, making most new sellers begin right away without paying much attention to Amazon’s policy.
This is probably the most common problem for too many sellers, causing their accounts to be suspended, even worse, by being banned from selling permanently on Amazon.
So if you want to do business on Amazon smoothly, vendors should carefully read the policies and terms before doing anything.
3, THERE ARE TOO MANY OPTIONS, EXHAUSTING INVENTORY
For most sellers, the balance between sales volume and inventory risk plus capital pressure brought about by SKU is difficult to handle for many sellers. Between opportunities and sales risks, choose a lightweight, manageable balance period, which is too much inventory selection or inventory exhaustion.
Multi-options are mentioned here, low-level inventory inventories and for large new product SKUs will be regularly included, thus significantly reducing inventory status and capital pressure.
Sellers often apply this model to develop a product testing cycle based on the product portfolio to verify the heat and prospects of the product and decide to continue selling or removing prices. Typically, the test cycle of products on shelves in the first half is longer due to off-season sales.
Since the initial launch of the product is exhausted inventory compared to the facts, once the product becomes selling, it will face the problem of out of stock.
If supply chain management and cooperation is not managed, leading to long-term outages, ratings will fall sharply or be overcome by competitors, even miss out on the parties after delivery.
Because the number of online SKUs is much less than the mass SKU mode, under the same conditions, the number of selling products is lower, thus the need to increase the success rate of the explosion requires development or Choose products more time now.
4, THE ONLY PRODUCT WILL WIN
The most successful in this mode must be the Amazon Echo series, some SKUs, millions of units of sales, are the most popular sellers. This model does not necessarily require companies to master the industry’s leading technology, unless it is the industry’s leading product, such as Echo.
However, it requires a strong research and development ability, a very rich resource that can be appropriate and extremely sensitive to market knowledge. It can significantly improve users’ market or demand gap, points of interest, etc., integrate them into product development.
Moreover, there are two types of profit models for this model: one is based on the product itself and the seller’s thinking to make a profit, two is based on the product to promote the ecosystem, think of the person Buy on the Internet. Echo is a combination of these two profit models and it also has shortcomings.
As mentioned above, due to the large amount of resources needed to develop products, this road is very difficult for small and medium companies.
Development risks are huge. In formation, in addition to the largest element of the product, there are many other influencing factors, such as promotion, operation, inventory management, etc. and problems in a link may be missing. , leading to waste of development resources in the early stages.
5, THINK THAT ADVERTISING CAN BOOST SALES
A big mistake in the mind of Amazon sellers is that when selling just advertising on Amazon, it can boost sales. How can a new vendor compete with long-time salespeople who have good sales and profits on Amazon? This is a big question.
Don’t be too expecting to advertise on Amazon, focus on the product as well as the sales ranking before thinking about advertising.
6, SELLERS DO NOT HAVE ENOUGH COST TO MAINTAIN
Before participating in any e-commerce site for sales, vendors should consider everything when calculating the required investments. It is difficult to maintain a product that is not out of stock, especially for sellers with limited funding or lack of patience to maintain.
It is best to set up a specific, complete and serious plan for sales, reserve funds in the importation, maintain inventory to avoid insufficient import costs.
In general, any business environment has its strengths and weaknesses. If you are already in business you need to be clear about how to deal with inadequacies. So you can develop your business perfectly and get financial freedom.
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