Freight rates are going to rise again? Strategies to deal with skyrocketing costs

The United States just issued a flight ban some time ago. Although we did not completely restrict flights in the end, there is still a limit of 2 flights per week for each airline. We have analyzed the impact on cargo transportation in our previous article. You can click here to review it. I will not elaborate here.

Even though the United States has started to resume work, the virus has long disappeared here. However, logistics prices have not fallen back. Whether it is FedEx DHL or postal parcels, the prices remain high. Even FedEx and UPS have recently increased surcharges.

Now the passenger and cargo exchanges between China and the United States are no longer a simple market economy, but have also involved political competition between the two sides. The above-mentioned flight ban is a game of back and forth. Trump even said recently that he "hopes to remove all Chinese companies from U.S. stock exchanges."

Although this is unlikely, Trump's remarks have shown that the current Sino-US confrontation has involved all aspects. Because of this confrontational consciousness, it is difficult for the passenger and freight exchanges between the two sides to return to the pre-epidemic level in a short period of time . In addition, the peak season is coming soon, and the logistics costs of our cross-border sellers are expected to remain at this high level for a long time.

When we encounter such cost increases, we will definitely calculate the profits we will get. If it is acceptable to make less money, many sellers will choose to bear this part of the cost themselves and not raise prices.

Because Amazon is very sensitive to prices, price changes will greatly affect product traffic and rankings, and in extreme cases, products may be removed from the shelves. Therefore, sellers are very cautious about price increases.

However, there is always a limit to the costs you bear. In fact, it is difficult for most sellers to calculate their actual costs clearly. Sometimes you think that leaving a little profit margin is also making a little money, but in fact, you are losing money on every order, and you are working for the logistics and brother-in-law in vain.

Therefore, we always recommend that you leave enough profit margin for your products, which can not only cope with the sudden cost increase, but also give you more room for operation during the big promotion. We have always maintained a profit margin of about 30% to 40%, so even if you discount 70% or 80% during the big promotion, you can still make money, which not only increases the volume but also makes money.

As for the concern of many sellers about “not being able to sell at high prices”, it actually has more to do with their own operating methods. How can they better sell high-priced products?

The general operation routine must start from the most basic traffic entrance. Many sellers do not have a solid foundation. They may develop well at the beginning, but their sales can easily get stuck at a certain level and find it difficult to make further progress.

This foundation is especially important for sellers who want to take the high-profit route. Since the price is not advantageous, it is even more necessary to capture accurate buyers with high willingness to pay. Here I suggest that you must first understand the major traffic entrances of Amazon, and at the same time spend more time on positioning keywords. The keywords here are not only filled in the keyword column, but also the bridge connecting the title, QA, and embedded keywords. It is not too much to spend more time on this stage.

With a good optimization foundation, the next step is to attract more traffic into your pool. Here I strongly recommend Amazon's in-site advertising. All sellers should fully understand the in-site traffic before thinking about off-site traffic.

If you have laid a good foundation for keywords in the previous step, you will be able to understand and get started with in-site advertising. Even experienced sellers have two high-end methods to choose from: brand advertising and display advertising. The combination of these advertising methods can maximize the use of Amazon's in-site traffic.

With the supporting strategy, even high-priced products will not have trouble selling. Instead of being stingy with profit margins, it is better to position yourself as a high-end product from the beginning. This can not only resist the increase in logistics prices, but also provide room for discounts during big promotions.

The second half of this year is a very critical period. Prime Day and the year-end peak season will directly overlap, which will be an unprecedented opportunity for traffic explosion. If you start planning in the middle of the year, you can still catch up with Prime Day, which starts in September.

In order to enable more sellers to escape the vicious cycle of low-price traps, Teacher Alice will talk to you offline this month about how Amazon's high-profit model works. From traffic entrances to complete explosive sales routines, from theoretical knowledge to practical operations, every link of the high-profit model will be explained in detail.