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.

PRODUCT LIFE CYCLE IN THE INTERNET

The third step in selling products on the internet is to understand the product life cycle stages on the internet. Life cycle on the Internet include product introduction stage, the stage of retail products in the season, the final stage of product life and product liquidation phase. Product introduction phase is also known as the product launch phase. This stage occurs when the product was introduced to the market and the product is very new thing for the customer's mind. At this stage the product in warm conditions or product supply exist or can not meet all the demand. Circumstances like this cycle is known as the state of the product life cycle healthy. Usually the time between 1 year to 3 years. Conversely, if the supply of products is greater than the demand indicates unhealthy conditions or product failure, the time between 6 to 12 months or less. For example, when Apple took the iPod Mini, an MP3 player has been sold out for three months at the introductory stage. In contrast, the electronics company that sells kitchen equipment $ 1,000 for 2 months on the Internet have failed and ended with a discount at this stage of its introduction. Phase retail products is a step in season, most companies require retailers to provide product prices in accordance with recommended. Digital cameras, cars, books, television and clothing are the latest and greatest products in the retail season. For example, if you bought a digital camera to Best Buy, Circuit City, Electrinic Boutique, Sears and other stores, will find the same prices, except maybe a package price in the context of specific events, but basically the price at any cost the same otulet. The final stage of product life is usually caused by the introduction of new products in the category of products by companies or competitors. At this stage manufacturers and retailers pulled the old product as soon as possible by replacing the new product is still warm. At this stage the product sold as a cost or a small loss, as customers shifted from older products to newer products. In the old product seller using a high discount rates to attract customers to buy the old product. For example, old products we call P100, the new product that replaces with a new model we call P200. This applies to the automotive, electronics, computers, clothes and so on. Liquidation phase is the phase of the excess inventory of products, produces waste and product updates. This stage is the stage avoided by producers and retailers, as it suffered heavy losses. Usually sold products 10% to 20% of the cost or a loss of 80% to 90%, so that producers and retailers to remove these products. For example, companies want to sell in large numbers for women's leather jacket for winter and autumn. Companies producing in large quantities and menyetok in large numbers in the thousands of shops and the city. It turned out that the estimate is wrong, because only certain cities are in dire need leather jacket. So the only way to sell only to give a big discount to sell the leather jacket and the resulting loss.