Amazon product selection: Be careful when buying products with low order value

My dears, today I am going to share with you my experience in selecting products on Amazon, especially how to avoid products with low average order value❗

1. The temptation and truth of low-order products

Surface temptation:

For novice sellers with limited funds, low-price products have low initial investment and look very attractive. And in times of economic downturn, low prices are more likely to attract customers👀.

The truth behind:

Take Amazon as an example. The platform charges a percentage. Assuming that you sell products worth $5 and $50, the fee rate is 15%. The fee for the $5 product is $0.75, and the fee for the $50 product is $7.5. But to get the same income as one $50 product, you have to sell 10 $5 products, which means you have to handle 10 times the order volume and bear 10 times the logistics pressure and other operating costs.

2. The profit dilemma of low-order products

Disadvantages of price war:

Competition on Amazon is fierce, and there is little room for adjustment in the price war for low-unit-price products. For example, if a competitor reduces the price of a $5 product to $4.5, there may be no profit, while a $50 product can still make a profit if it is reduced by $5.

Promotion restrictions:

With slim profits, it is difficult to have extra funds to invest in advertising or marketing activities. Without promotion, it is difficult for products to stand out, forming a vicious cycle😖.

3. Analysis of high-priced products

Advantages:

With high profits, we can invest more money in marketing. With fewer orders, we can provide better services to each customer💪.

challenge:

Customers take a long time to make purchase decisions, so the conversion rate may be low. Moreover, customers have high expectations for high-priced products, so the return rate may also be high😫.

4. Transformation suggestions

It is not recommended to abandon low-unit-price products immediately. You can gradually introduce high-unit-price products to test the market reaction, adjust the product portfolio according to the situation, and find a balance point that suits you👑.

When starting a business on Amazon, product selection is critical and you need to consider various factors comprehensively.