|
I recently did a market research and saw a very puzzling category. The size is large, close to extra-large or even extra-large. The major category is home furnishings. BSR mostly ships through FBM and AMZ, and very few through FBA.
Because it is a large item, I personally think the sales volume in the category is very high, but the prices in the entire category are very low. The average price of the best-selling sizes on BSR is 130-150, and 200 is already considered a super high price in BSR.
The software shows that the overall gross profit (FBA delivery + commission 15%) is 30-50%. (About BSR 30) Because this is a large item, the product cost is 30% of the cheapest one I saw on 1688, and the 30% cost of the hot-selling models is not found at all. Combining the domestic market and market conditions, I also feel that the low cost price is not reasonable, and 30% is already the limit.
Then I calculated the shipping cost by myself according to the market size of the FBA calculator. According to the cheapest shipping cost of full container, the shipping cost is at least 15%. Even if I use the high gross profit of 50%, deduct 30% of the cost, 15% of the shipping cost, and 10% of the refund and advertising of the category, I will lose money.
The only thing that comes to my mind is that AMZ's shipping fee is really much cheaper. I have also calculated some quotes for overseas warehouses before. Excluding miscellaneous surcharges for large items, it may be a little cheaper than FBA. Or the product cost is really only 200-300, but the product consumables are there, and it seems that even if it is cheap, it cannot be sold in such large quantities.
Are there any friends who have encountered similar situations? Are they really more philanthropists, or are they just trying to win by optimizing the supply chain extremely demandingly, and accumulating small profits into large ones by increasing sales?
"Wonderful Reply"
Brahma - Amazon High-end Selling Agree with: ThePiginTheWind, moyell, a wolf in the lonely wind, a lost horse, a1543763235 more » Yes, you guessed it right. Large furniture is the best seller. I personally feel that the level of sales is close to the three lucky series of electronic products. Although the absolute number of orders is not as much as that of electronic products, the sales value is 5 to 10 times higher than that of electronic products. I recommend all joke makers to try the three lucky series of home furnishing products, such as bed frames, tables, and chairs. Do you want to challenge the limit? Come if you dare! Millions of dollars are spent, and you can't even see a ripple. It's all about the heartbeat~
Dear big sellers, do you remember the $59 bed frame? The $69 gaming chair? The $79 lift table! ? The title of the king of volume is well deserved. The shipping cost exceeds 50% of the selling price, not to mention the 15% platform fee. How can you still make money? I am talking about a wooden bed, an adjustable gaming chair, and a 48-inch lift table! ! Not a weird iron bed or something like that.
I guess they are still clearing their inventory. Due to the sudden increase in orders and blind expansion in the past two years, I heard that they generally have millions or even tens of millions of goods on hand. In the past two years, I have come into contact with many people who want to cash out and run away and ask me to distribute and clear their goods. In addition to factories directly entering the market to compete with Amazon, large goods also have their own unique supply model, which is the so-called M2C, such as Dajian Cloud Warehouse and Export Easy. Of course, this is a pit. They are playing with capital and are still fooling factories to hold goods for them. The price is not competitive at all, and they eat both ends. Whoever uses it knows it~
In fact, large items are products with a certain threshold. They have high value and high freight (freight). Without a certain amount of capital, you dare not touch them at all. Wu Sangui is not a big deal in the home furnishing category. Three cabinets are just for starting out. They can hold at most 1,000 bed frames and 2,500 chairs. They can only be used to test the waters and test the products. But the home furnishing category market is particularly large, and money comes quickly. You can make $20 on an order, which is much better than making 50 cents on an electronic order. Because the product has a threshold, the competition was not fierce in the era of high-quality goods. In order to open up the market, they can only stockpile such a tempting cake like crazy~ Furniture cannot be shipped directly from China like electronic products. It must first be stored in overseas warehouses.
The shipping cost of large items is also quite special. UPS/FedEx has special discounts for large items. As long as there is enough volume, you can even get a 90% discount on shipping costs. For small sellers, this is another pitfall, and it is also the survival space for many overseas freight forwarders and M2C platforms. Unless you are a big seller and get a discount of more than 70%, it is not much cheaper than FBA. However, considering the shipping cost to FBA, FBM is more cost-effective. General freight forwarders can provide similar or equal shipping costs, so it is not a big problem.
Today's furniture market is already a bloody market, and it is not recommended for new sellers to enter. Even for old sellers, it is difficult to play a role in the context of economic depression, inflation, consumption downgrade, and market shrinkage. The overall market profit margin is only 3%-5%. Just look at the annual reports of the popular home furnishing brands Zhiou and Lechuang.
Maybe the market will be better after the big sellers clear out their stock, but the economic environment is still a problem. Unless you develop new products like Leckey, or find a niche category, such as the frog chair two years ago, you can experience the joy of getting rich overnight in the furniture category. You can make $30 per order, with a profit of up to 30%. With a million sales, becoming a billionaire is not a dream. ThePiginTheWind • Foshan • 2024-08-07 09:43 It feels like 3% to 5% profit is something that only a few top players can barely achieve. Without supply chain support, you can't even get the entry ticket to lose money. It's so scary.
Mr. Hao • Shenzhen • 2024-08-07 11:44 The shipping cost exceeds 50% of the selling price, not to mention the 15% platform fee-----this is simply the standard configuration of the king of rolls. Regardless of the high or low average order value, as long as you see a category with this kind of price structure, you basically don’t need to look at the CPC. Newbies should just give up on this track, because the profits are all squeezed out of the supply chain and shipping costs.
If the commission is based on sales, just ignore what I said.
hanshanxue • Ningbo • 2024-08-07 12:53 This price seems to be almost the same as the domestic price, they are all philanthropists!!
Crazy Xuan Mantou • Zhenjiang • 2024-08-07 13:44 5% profit on $59, $69, or $79 is better than 30% profit on $9.99.
Cy1234567 • Chongqing • 2024-08-07 14:24 I work for the company mentioned in the main article because it has its own overseas warehouse. The profit margin is about 6%. The ideal profit margin for new products is also controlled at 8%. This year's profit margin has dropped a lot year-on-year, and it has fallen into a situation where revenue has increased but profit has not. Now the focus is on the layout of independent sites and off-site promotion.
Anonymous user Agree with: Who crosses the river to pick lotus I just resigned from a cross-border company that made large furniture. The company mainly made tables, gaming chairs, hangers, etc. I had to clear out the stock right after I joined. The link ranking for me was quite high, but the loss was very serious.
Why are we selling at a loss? The trend was so good in the fourth quarter of last year, and the sales volume was very high, which led to a large amount of inventory this year. First of all, the delivery time of such large items is very long, and they are shipped by sea. Therefore, when the trend is not good, it is difficult to sell so many goods at a profit. The prices of competing products have been very volatile this year. In order to maintain the ranking and not be unsalable, we have to lower the price with the competing products. However, the shrinking market and the sharp drop in the prices of competing products still make it difficult to clear the goods. As you can see, the loss is very serious, and each order loses hundreds of yuan.
So I left the company not long after I joined it, and I didn't get any commission at all. Because the company as a whole was suffering from serious losses, the leaders had to work overtime a lot, and they wouldn't let these minions run away so quickly even if they worked overtime. The atmosphere was very depressing.
Anonymous user Agree with: Greedy Pig I have three and a half years of experience in large furniture, and have made office desks and gaming desks. The price of 69.99 mentioned by the OP may still be too high. At the beginning, our boss did not even count the profit, and directly sold it for 29.99. He never thought that the final shipping fee would be 40, so it would be better to throw it away to lose less. But let's be honest, the items on the shelves now are indeed low-priced coupons. If they can't be sold, they will clear the stock. If they are sold out, they will max out the budget and stock up. The profit is also substantial. With a strong capital chain, you can still make a living from furniture (starting at 10 million). Small sellers, don't come in and give away money.
Kaito Ki-taek - Development with 3 years of practice Agree with: Jessie90418, female star, AnderAnder, black You are quite brave, look at the bed frame.
If you are not specialized in this, it is not recommended. The volume of this category is comparable to 3C in furniture. In addition, the supply chain of others is perfect, and the resources and funds are prepared in several dimensions higher than ordinary sellers. ThePiginTheWind • Foshan • 2024-08-07 10:30 The master has an explanation. How did you see it? Is it so obvious?
liudong1105 • Shanghai • 2024-08-07 10:45 @ThePiginTheWind: Let me put it this way, their most basic requirement is to have more than one vc account, and this vc account is daunting for many people.
Sweet and Sour Spare Ribs Gu • Zhejiang • 2024-08-07 15:04 I deal with large and extra-large items. It seems that you are all very subjective when chatting. Don't guess. You will know only after you deal with this category.
Momo01 - Work hard and achieve financial freedom soon Agree with: Greedy Piglet, Liana, Gleeson, shatianayanh I feel like every category is competitive, not just home furnishings. I used to sell for 40 euros, but now I can only sell for 20 or so. During big sales, I can sell for more than 10 euros. I calculated that I didn’t make any money at all. I don’t know where those sellers get their profits from. And now it’s the same with products. I analyze a profitable product, and as soon as the product arrives, the competitor immediately drops the price by more than 10 euros, and they also offer coupons. This year, I launched several products and it’s the same. What’s wrong with the current market? It feels like Amazon is getting harder and harder to do business. I don’t know if it’s affecting PDD. Gleeson • Guangdong • 2024-08-08 13:52 I can relate to this. I spent a lot of time selecting products and found products that I felt were good, but after careful research, I found that every product had a charity seller. Things that normally sell for $30 are always sold by charity sellers for more than $10, almost without exception, especially for relatively inexpensive items. I really don't know what's going on this year. Who is doing charity there? It's everywhere.
GoodDay1nHell - A newbie who knows a little bit about everything Agree with: SamJiang, Mahou Soju Ringo, There are cats like me I worked on office chairs last year and early this year, and basically witnessed the process from high prices and high profits to low prices, until there was basically no profit and I had to rush to sell them at flash sales to maintain sales. However, although that is what I said, it also depends on whether the product itself is powerful. My category is basically selling products for the sake of selling products. Only the traditional front rows sell products for the sake of selling brands, so the cause and effect will be slightly different, and it also depends on the seller's planning. ThePiginTheWind • Foshan • 2024-08-06 15:19 This product is similar to an office chair, both are durable goods, and the quality is generally not too bad. The single function means that the product does not have a particularly unique selling point. In fact, I don’t understand whether it is really necessary to make such a large product that needs to be assembled with a small profit or even a negative profit to boost sales? What’s the point? Moreover, most of them are shipped by FBM, which is not so worry-free. If you don’t make money, you still have to ship thousands of dollars a month, and there are a lot of problems waiting to be dealt with, such as assembly and after-sales.
liudong1105 • Shanghai • 2024-08-06 15:37 @ThePiginTheWind: Most of these products are shipped from overseas warehouses, otherwise it is impossible to ship from mainland China.
ThePiginTheWind • Foshan • 2024-08-06 15:41 @liudong1105: It is impossible to produce it locally, right? It has to be shipped by sea, right?
liudong1105 • Shanghai • 2024-08-06 15:48 @ThePiginTheWind: My previous company was engaged in overseas warehouses for home furnishings. They produced the products in Canada and then sent them to overseas warehouses, which saved a lot of money. However, this category is super popular, and all of them are American local brands and AMZ stores. Chinese sellers account for about 1%
GoodDay1nHell • Guangdong • 2024-08-06 21:29 @ThePiginTheWind: The significance of doing self-delivery now is actually more for multi-channel distribution. I have Amazon, independent websites and Wayfair, so I can get a lot of distribution. These large pieces of furniture actually don't require big packaging, and the FBA delivery fee is not expensive, but after-sales service is a big problem. Chairs, for example, are very easy to return because the sitting comfort is very subjective. As to why they would rather lose money than not sell, in fact, many operations will ignore or not know one point, which is the factory, because as long as the factory is constantly producing and shipping, it is making money. The factory is most afraid of shutdowns. If the flow of goods is cut off, it is basically easy to go bankrupt. Therefore, many factory-led sellers would rather kill the entire category to get the money. This is the reason.
BoomToday - Research-focused Amazon player Many of those who deal in oversized items are VCs. The profit model of this VC is completely different from the normal gross profit margin model that you understand. So it’s just that you are not making money by calculating using the FBA model. I won’t go into details.
Anonymous user
This is how an outsider sees an insider. For those who can do this business, many costs are lower than you think. Those who do Amazon have a certain profit margin, otherwise who would do it? gundam157 • Shenzhen • 2024-08-07 10:06 What if they are clearing out the stock?
Wearing a vest to earn a living • Dongguan • 2024-08-07 10:22 You are also an outsider looking at insiders. There are many people doing e-commerce and Amazon who are still doing it even though the profit is very low.
liudong1105 • Shanghai • 2024-08-07 10:37 @皮个马甲赚口饭吃: Home furnishings profit will only have 10% profit after deducting everything else
Wear a vest to earn a living • Dongguan • 2024-08-07 11:50 @liudong1105: When I was in the fast-moving consumer goods business, I didn’t even earn 10 points after deducting advertising. We also shipped by full container to reduce costs.
Mr. Hao • Shenzhen • 2024-08-07 12:17 FBA delivery, non-VC, FBA shipping costs exceed 50% of the selling price. Amazon has many such mysterious links. Basically, we can only make some adjustments in the first leg and cost. The difference in the first leg will not be too big.
Anonymous user • Fujian • 2024-08-14 10:44 @披个马甲赚口饭吃: I really don't understand why Amazon is not profitable. The products made by our company cannot be said to have a huge profit, but it is basically a 1:1 profit. According to our boss, if the business is not profitable, you can go home and lie down.
Wear a vest to earn a living • Dongguan • 2024-08-14 15:57 @Anonymous user, your understanding of making money and profit is too superficial. Your sales volume is 100,000 and your net profit is 15%, while others' sales volume is 1 million and their net profit is 5%. Others may only make 34,000 for one link, which is easy to manage, and they can get a lot of goods and the factory gives a long payment period. It seems that the investment is large, but in fact, it is not your own money that is used to make money. Some may make sales volume to get VC, financing or listing. It is not a good business to make 1 or 2 yuan back immediately after investing 1 yuan.
|
