No matter which kind of business we would like to do, we need to know exactly what would it be. In many cases we make choices to meet our interests. Then we know that it is easy to start but hard to end. If cross border eCommerce is really to your taste, congratulations! Because once you get into trouble, what keeps you going is not the courage, not knowledge, not pressure, but interest.
The purpose of cross border eCommerce is to get more profit in terms of its huge potential. One of the important factors of profit is price. Today we’ll talk about how to set prices for cross border eCommerce eCommerce products.
Step 1: Price research
First we need to know our competitors. A famous price inquiry platform in China is called etao (www.etao.com). It includes most of famous eCommerce platform in China such as JD, Taobao, Tmall, Amazon and eBay. Then we search the category of the product (Not Keyword). It will show multiple prices of one kind of category. We need to get rid of the one which is in top 5 and also get rid of the one which is in the bottom 5. That is because some higher or lower price settings are used to increase false sales, which don’t make sense. Then we need t calculate the average price, the highest price and the lowest price.
Step 2: Calculation of weight and volume
You should know the weight of your product. Compute the weight to every ten grams because of the high price of cross border logistics. Furthermore, some fragile products need additional foam, rope or carton. We also need to weigh them and calculate the volume including packing. After that we can calculate the exactly transportation expenses.
Step 3: Calculation of FOB
FOB stands for “Free On Board” and always used in conjunction with a port of loading. Indicating “FOB port” means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer pays cost of marine freight transport,insurance, unloading, and transportation from the arrival port to the final destination. The passing of risks occurs when the goods are loaded on board at the port of shipment. Use the product price which is including free shipping minus the real transportation expense, and you’ll get the FOB price.
Step 4: Do it or not?
FOB price multiplied by exchanged rate then compared with the pick up price, and we’ll get the gross profit. Normally, we can make the decision according to whether or not it has 10% of the profits or more than 20RMB per product. Of course the higher, the better. Higher profit means we can make use of more marketing strategies.