The necessary conditions for the success of high margin brand
an e-commerce business whether there is investment value. VC consider the value of a B2C site is mainly a few indicators:
1, website conversion rate, that is, the conversion ratio between the amount of clicks and orders.
2, the next line sales conversion rate (for the sale of the network in terms of the site).
3, repeat purchase rate.
4, order average amount.
5, active users.
the average amount of the order is considered profit related. Internet brands need to continue to put a lot of money to bring sales, after sales, there is a relatively high margin to support the continued investment in advertising.
cited an example of the three well-known brands of shoes. BELLE, Daphne, red dragonfly. The initial three brand pricing are similar, but later BELLE continuously improve the product price, the price in the price range but also Daphne than BELLE, red dragonfly basically maintained a stable price between 200-400. With the development of BELLE’s price is higher and higher, the profit is higher and higher, the high profit can make BELLE into some high-end shopping malls, because of its profit to support the mall related to expensive costs. So BELLE can occupy the forefront of commercial display position. The red dragonfly is more difficult to enter these high-end shopping malls. This cycle is reflected down.
Some brands of
network, such as clothing brand cosmetics brand cosmetics brand clothing VANCL, India and some Taobao ya. The higher the price, the higher the gross margin, the more profit it is to advertise the new product. Taobao developed in most of the brands are relatively high prices, to maintain a good profit, the development of a better brand. While the other part many sellers just in the price war, prices are lower and lower profits increasingly thin, do very tired. The worse the quality of the original product, the loss of customers, but no money to advertise, vicious circle.
network brand pricing need to add some brand value to support. Product concept, product quality, packaging design should be relatively better, so as to support the brand. Product related requirements to the big name. To allow consumers to buy this product feel worth. This is related to the brand to increase investment in the brand to match. It’s not just to raise prices. Repeat purchase rate is very low.
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