This is still not enough: adding seasonality and product category
Posted: Tue Jan 07, 2025 6:05 am
We calculated the product part (at the top of the screenshot). We looked at how the advertising campaign worked: money, expenses, cost of the basket, order, click (middle left part of the screenshot).
Next we have the mandatory parameters related to the product category (middle right part of the screenshot) - this is the product status according to the ABCXYZ matrix + season + product availability.
One of the classic examples of seller behavior: "There mexico whatsapp phone number have been no sales for the last 30 days, let's lower the price and reduce the margin." But the matter may simply be that this year there has been a dry summer, so people do not buy raincoats.
What to do
If you see a problem in sales, before blaming marketing, changing the parameters of the advertising campaign or lowering the price, be sure to double-check that there are no problems with the season or availability of goods.
What's next? We add marginal profit to the marketing funnel (bottom left in the screenshot). And here you can see the product categories that are generating losses for you even before the advertising campaign.
If you have caught such a product (SKU), you do not need to launch advertising on articles that are basically minus, but you need to fix the price and marginality. If the marginality according to the ABC-XYZ rating cannot be saved, then the article should receive the status of "stop list" instead of the status of "regular assortment".
On stop lists we have additional criteria that we are no longer going to produce this. This means that we can reduce the profit margin for this product and even work at a loss in order to return the money invested in the product.
The main thing is to never launch advertising campaigns on such SKUs, except in cases where you want to quickly sell the product at a loss.
Who controls the gross income on the marketplace and what does financial P&L have to do with it?
Marketplaces are a mathematician's market. Success on marketplaces today is a constant reduction of unit economics on a product. I include three parameters in this economy:
VD 1 (gross income) is revenue, that is, how much the seller sells the product for on the market, minus the cost price - how much the seller spends on producing the product.
VD 2 — channel cost (all expenses on the marketplace, for example, logistics, fines, storage).
VD 3 — the cost of the advertising model (how much is invested in promoting the product).
Incorrect calculation or lack of control in each of the parameters (and founders usually do not delve into them) can lead to significant losses.
Next we have the mandatory parameters related to the product category (middle right part of the screenshot) - this is the product status according to the ABCXYZ matrix + season + product availability.
One of the classic examples of seller behavior: "There mexico whatsapp phone number have been no sales for the last 30 days, let's lower the price and reduce the margin." But the matter may simply be that this year there has been a dry summer, so people do not buy raincoats.
What to do
If you see a problem in sales, before blaming marketing, changing the parameters of the advertising campaign or lowering the price, be sure to double-check that there are no problems with the season or availability of goods.
What's next? We add marginal profit to the marketing funnel (bottom left in the screenshot). And here you can see the product categories that are generating losses for you even before the advertising campaign.
If you have caught such a product (SKU), you do not need to launch advertising on articles that are basically minus, but you need to fix the price and marginality. If the marginality according to the ABC-XYZ rating cannot be saved, then the article should receive the status of "stop list" instead of the status of "regular assortment".
On stop lists we have additional criteria that we are no longer going to produce this. This means that we can reduce the profit margin for this product and even work at a loss in order to return the money invested in the product.
The main thing is to never launch advertising campaigns on such SKUs, except in cases where you want to quickly sell the product at a loss.
Who controls the gross income on the marketplace and what does financial P&L have to do with it?
Marketplaces are a mathematician's market. Success on marketplaces today is a constant reduction of unit economics on a product. I include three parameters in this economy:
VD 1 (gross income) is revenue, that is, how much the seller sells the product for on the market, minus the cost price - how much the seller spends on producing the product.
VD 2 — channel cost (all expenses on the marketplace, for example, logistics, fines, storage).
VD 3 — the cost of the advertising model (how much is invested in promoting the product).
Incorrect calculation or lack of control in each of the parameters (and founders usually do not delve into them) can lead to significant losses.