Most sellers who launched new products in 2023 generally encountered common problems:

First, advertising bids continue to rise. Based on past experience, the advertising results are not ideal, and the success rate of promoting new products by relying on pure white hat methods is getting lower and lower.

Second, it becomes more difficult to restock. Once a product is on the shelf, if it sells well, it will easily run out of stock. After restocking, it is found that the sales volume of the product cannot be increased again.

Third, once the advertising budget is cut, the sales volume driven by advertising will immediately drop, and the ranking will be completely dependent on advertising. However, high advertising investment means that the promotion cost remains high, which ultimately leads to acceptable sales but difficult to maintain gross profit margin.

For sellers who have been in business for many years, the most effective way to promote new products in recent years is to adopt a low-price spiral strategy. This strategy can quickly improve the ranking of products and is in line with Amazon's flywheel theory; as long as the product can generate sales in a spiral manner, it will naturally gain more natural traffic and the promotion cost will be lower.

However, some sellers have recently discovered that this "low-price spiral" strategy is not very effective! Once the price of most products increases, orders immediately decrease, rankings cannot be stabilized, and they can only rely on loss-making promotions; it seems that products promoted with low-price strategies have been locked in a specific consumer group by Amazon's traffic mechanism. Once the price is raised, Amazon's traffic allocation mechanism is immediately adjusted, and the traffic allocated to the product becomes less accurate, which naturally leads to a significant drop in conversion rate and a corresponding decrease in traffic.

Looking back at the situation in 2023, it seems that sellers are deeply trapped in the price war;

If you still plan to start with price this year, you might as well take a look at the price war ideas shared by Zhaodanmao!

What kind of products are suitable for price wars

In fact, price wars are mainly aimed at standard products that are exactly the same, especially standard products with fierce competition, especially some new standard products that have just emerged. The reasons are as follows:

1. Only products with unchanged core functions and almost no difference in appearance will be the main battlefield of price wars.

This category of products is particularly fierce in the 10-30 price range. This is the price range that almost everyone is willing to make. The profits in this price range are decent. The core functions of this price range have not changed and there are too many standard products. For example, in the beauty and cosmetics categories, and the electronics categories, everyone has similar functions and looks similar.

2. For newly emerging standard products where competition is fierce, the competition is not fierce and people do not need to engage in price wars. For products that are not newly emerging, people do not see the hope of making them successful and do not want to do them.

A characteristic of this type of product is that the order volume is pretty good, that is, the market capacity is slightly larger. This type of product basically has a good order volume, especially the same type of products at the front desk. Another characteristic is that there are differentiated new products. Because they are new products, almost everyone sees the hope of being able to break into the category. This is the key reason why everyone rushes to do it.

The products that can be promoted at low prices at present:

1. The product price should be below US$15.99, preferably within US$10.

2. The advertising traffic is single.

This is because for products under 15.99, you can keep selling them for 9.99 with a small plan without losing money, and you can keep selling them for a long time. But for a product priced at $30, you will lose a lot of money at 9.99, and you can’t keep selling them for a long time.

Products with a single traffic structure that can maintain their ranking with just one or two keywords can also be moved up at a low price.

Low pricing is the most effective way to place an order, and it’s also the most mindless way.

The key to price war is stable traffic

Why is it said that the key to launching a price war by selling products at low prices is to require stable traffic?

First, it takes time for a product to become popular. Low prices must also be sustained for at least three months. Low prices mean low enough, not two or three dollars cheaper, nor large coupons. It means a direct minimum price, closest to the cost price. Only when the product is low enough can the conversion rate be increased and the product's natural traffic can be increased. The time must also be long enough, the goods must keep up, and it must be sustained and stable. In this way, the product will gradually have room for price increases, with an increase of 0.5-1 dollars a month.

Second, for operations, there is no data. Because there is no reliance on advertising, no money spent, no data, and no way to optimize. It is extremely weak on the operational side. Operations cannot increase traffic or optimize data. Everything depends on the Amazon system to match traffic to you and make conversions for you.

Third, because it is not supported by advertising, the traffic will become extremely unstable. Good traffic must be paid. Traffic channels can be laid out by advertising, and the advertising structure can make the traffic stable, because low prices lead to low profits. If the profit is low, there will be no advertising, and there will be no stable traffic. Therefore, if the price is raised, the order volume will drop immediately.

All this is because you want profit, you can't stabilize the order volume, can't achieve good conversion, and continue to deteriorate, and continue to turn the link into a new product promotion state. So now we are promoting new products, in fact, to stabilize the link traffic, find the traffic channel with the highest conversion rate, achieve incremental traffic, and achieve an increase in order volume.

The most extreme option is to increase advertising at a low price, which I believe not many bosses can afford. We just need to keep the price within a reasonable range and advertise well, and the remaining profits will depend on the market. If it works, we will continue to advertise, if not, we will clear out the stock.

Price war may be a good way to promote products

When a category is first introduced, it is usually at a low price. However, we have a principle that this product is not made by just a bunch of people. In other words, we will not make a product that is made by just a bunch of people.

1. The canopy of the outdoor tent

When we first entered this category last year, there were already several big sellers. Their strategy was to sell quickly. There were about 6 other companies doing this at the time. We were the first to make a low-priced product, that is, we made a low-profile version of the product and entered the market at half the price. Our product sold quickly and the reviews were very fast. Later, we made variants with medium and high customer price. Because this product is a new product, not many people make it. It is not the kind of product that can be made by anyone.

2. Beauty and cosmetics category

In fact, there are many small products that can be made in the beauty category, but there is a common feature that there are few new products in this category. When we entered the category, we found a style with fewer competitors. Our first step was also a price war, using the cost price to spiral. This product is a strategic product, a product that attracts traffic + reviews, and the variants that are bound later are the profitable products. At that time, many small products were made in the beauty category through this method, and almost all of them were promoted, because they were not new products, nor were they hot-selling products. When they came out, many people would not see them and passed them by, and no one rushed in to make them. Price war is a good way to get reviews and attract traffic.

Many people despise price wars. Price wars are not the goal. Price wars are a strategy. The key is how to use this strategy well.