PRODUCT VELOCITY

The fourth step in selling products on the internet is to understand the price of the products we sell and the number of products sold within a certain time. The relationship between the two are usually referred to as product velocity. The more products we sell, the greater the velocity of his product. We can make a curve relationship between price and amount sold each week. Usually the greater the desire to sell in large quantities, then we should set a lower price, otherwise the higher price that we set the less the amount of products we can sell.

Average Sales Price can also be narrowed by stating in an item contained in the so-called Stock Keeping Unit (SKU) which is a term often used by off-line retailers to demonstrate a unique item in the inventory. For example, Seller A has three red shirts with the XL size is two, and blue with one L size pieces, then SKUnya only two, namely SKU1 is a red shirt (number 2) and SKU2 is a blue shirt (number 1) . Key concepts to be understood without having to work on campaigns or do something special demand in the market or putting the regular SKU, the demand will not change in a period of 30 days to 60 days. Another variable that works is the supply, then we must also control the supply, though supply is also controlled by our competitors. This information is a weapon we can use to make important decisions based on our goal.

For example, Seller A sells 10 units of the SKU of each month at a price of $ 150. A seller has a target to increase its profits each month. SKU cost on a volume of 40 units cost $ 100, but if it can increase sales of more than 100 units per month, the cost of SKUs down to $ 85. So this information can be made a variety of scenarios. The first scenario focuses on high margin, we are selling at a price of $ 150 sold 40 units at a cost of $ 100, then its gross margin ($ 150 - $ 100) x 40 = $ 2000. The second scenario focuses on the current margin, we are selling at a price of $ 120 sold 80 units at a cost of $ 100, then its gross margin ($ 120 - $ 100) x 80 = $ 1600. The third scenario focuses on low margins, we are selling at a price of $ 100 sold 160 units at a cost of $ 85, then its gross margin ($ 100 - $ 85) x 160 = $ 2400. By understanding the speed of product / price and a test allows us to get the approximate number of SKUs that we can sell and we expect vulume. By estimating the price and volume of our products will help make the preparation of resources and products are able to predict the margin we earn each month. If the product is not made by us, then we can negotiate the price with the source of our products at a price based on sales volume.