Business rules for operating e-commerce platforms!

In the future, life will become more and more difficult for e-commerce operators !

Don't believe it? Please look down.

In the past, e-commerce companies could sell products by putting them on shelves. Gradually, e-commerce companies had to do search rankings to sell products (natural search, through trains, diamond exhibitions, Taobao affiliates, super recommendations, etc.). Later, e-commerce companies had to add content and write soft articles to attract customers. Later, e-commerce companies had to make short videos to attract more traffic. Nowadays, e-commerce companies also have to do live broadcasts, but they may not have traffic...

It can be seen that e-commerce operations are becoming more and more complicated, and operators need to master more and more things. It is foreseeable that future operations will become even more complicated. This is a necessary result of the development of things .

So how should operations be done?

This depends on what level of operator you are...

• Ordinary operation: promoting hot products through search ranking on the platform;
• Excellent operation, based on a deep understanding of "Tao", promotes stores through capital means within the platform;
• Top-level operations, jump out of the platform to promote hot products, retain users, and design patterns to promote repeat purchases and fission.

When you are an operator to the end, you will find that: technical methods are important, products are important, and capital is more important, but in the face of business laws, all of these seem so small and powerless .

So what is this business law? How can we operate outside the platform?

1. Business Laws

I have been engaged in e-commerce operations for 5 years, and I have stumbled along the way. It was only last year that I finally figured out this rule in the vagueness! But, do you know? Those who know this rule have already made a lot of money...

Almost every product has its life cycle, from birth to death. Business competition generally follows the following development rules:

Phase 1: Supply War

This stage is the "birth" stage of the product, from scratch to the market.

At this stage, there are more people on the demand side and fewer people on the supply side, which means there are fewer competitors.

At this time, as long as the product can be produced, there is generally no need to worry about sales through the e-commerce platform. If it is recommended by a super expert, it can bring more attention and sales.

This stage generally has the following characteristics:

1. The unit price of the product is high and the sales volume is low;
2. The popularity cycle is short (3-5 months at the fastest and 1-2 years at the slowest, depending on the industry category);
3. There are fewer competing businesses, marketing costs are relatively low, and the investment-output ratio is high.

Therefore, in almost all categories, when launching new products to the market, it is necessary to first fight a supply war. At this time, you are dealing with an almost blank market or an early market, and it is easiest to make money at this time.

Phase 2: Price War

Once a category has passed the early market, the next step is price war.

Because in the early days, the first merchants to do it made money. We all know that the ability to copy and innovate is the strongest in China. Since there is money to be made in this category, more and more merchants will join in, the competition will become increasingly fierce, and there will be oversupply. At this time, a price war is inevitable .

On the one hand, due to the huge profit margins, new entrants often seize the market by lowering prices; on the other hand, due to the maturity of technology, costs are also constantly decreasing .

I believe we have all experienced this to some extent. For example, early PCs generally cost more than 10,000 yuan, but now they cost only a few thousand yuan. Another example is early smartphones, where a good one cost around 5,000 yuan, but now they cost only a few hundred yuan...

This stage generally has the following characteristics:

1. Competing merchants obviously feel the increasing number;
2. Prices continue to fall, constantly setting new low records;

The third stage: Operational war/channel war/brand war

When a price war occurs, it is also a time to test the ability of decision makers.

Some merchants keep lowering prices, and eventually lose all the money they had previously earned; others give up on this category and look for a new one to repeat the first and second stages, making money from the time difference (this is also a model).

But more people neither want to lower prices nor can they find better categories, or they only focus on one industry. At this time, they must enter into an "operation war, channel war, and brand war."

Entering this stage is when the company's comprehensive capabilities and strength are truly tested, but most businesses either exit at a loss or struggle to survive, and only a handful of the 20% actually make it to the top.

During this stage, most businesses want to build a brand, but building a brand is extremely difficult and takes a long time, taking at least two to three years, and at most five to ten years. In recent years, it is impossible for businesses to wait until their brands are well-known before making money. They need to make money while gradually building their brands. This requires finding a parallel point between "selling goods" and building a "brand", which involves fine-grained operational stages, with operations, channels, and brands working together, allowing survival and development to coexist.

One thing to pay special attention to here is: in addition to taking advantage of industry dividends in the early stages of the product, operations at this stage must also be superimposed on new media dividends. Only in this way can a nuclear explosion-like reaction be produced.

This is also what makes top operators different from others, where their abilities and values ​​are reflected!

There is no such thing as something that comes out of nowhere without any reason in the world. All success is the result of long-term planning!

Phase 4: Pattern War

Most businesses will enter the third stage, but countless will die in the third stage, or be stuck in the third stage and unable to get out.

After the third stage has been going on for a while, whether the business can find a development path and model of its own will determine the company's progress or retreat, but this puts higher demands on the company's comprehensive talent.

For example, some merchants have accumulated tens of thousands or even hundreds of thousands of old customer fans in the early stages of e-commerce. As the cost of acquiring customers becomes increasingly high, the merchants have opened micro-malls and formed their own business models through private domain operations, such as old customers bringing in new customers, secondary distribution, and franchise agents. This is the upgrade to model war after corporate integration.

The establishment of a model is closely related to product characteristics, industry conditions, corporate resources, and current trends.

Phase 5: Capital War

No matter how fierce the competition is, there will always be a small number of businesses that win the competition. As the market matures, total market demand will be concentrated in the top two or three brands, and competition will become even more intense. At this time, what matters is capital and the efficiency of its use.

The above is one of the business laws that exists in our society. It may not be completely correct, but this is the overall situation.

Looking back, what level are you in? Going with the flow is the correct approach a top operator should take.

After so many years of operation, I increasingly feel that traditional e-commerce operation methods are slowly becoming ineffective. It’s not that we can’t promote hot-selling products, we can still promote hot-selling products, but the life cycle of hot-selling products is too short, and many times the cost is not recovered before the products hit the bottom.

In the future, new e-commerce operation methods will gradually converge with the offline and education industry operation methods. The theoretical source of this operation method is " direct marketing ."

I also set a flag for 2021: If traditional e-commerce operators do not master "direct marketing" and operations based on the WeChat ecosystem, their future operations will be difficult.

This picture condenses a lot of knowledge from top-level mentors. The knowledge framework is similar, it just depends on how it is applied. It is applicable to e-commerce, offline, and education, so be sure to save it!

2. Off-platform operations

I shared the "rules" earlier. In fact, operations should be conducted according to these rules.

Let’s first review the characteristics of the first phase of the “supply war”:

1. The unit price of the product is high and the sales volume is low;
2. The popularity cycle is short (3-5 months at the fastest and 1-2 years at the slowest, depending on the industry category);
3. There are fewer competing businesses, marketing costs are relatively low, and the investment-output ratio is high.

For example, the following product:

It is in the early stage of the market, and the prices are generally high. The lowest configuration size is generally more than 500 yuan, and the best-selling ones are around 1,000 yuan, with occasional ones costing more than 200 or 300 yuan. At this time, if you launch a 99 yuan product, do you have an absolute price advantage? You might say that yours is 99 yuan, but others’ will be 89 yuan in two days. Yes, I agree very much, but this is where the difference in operations comes in. Who told you to sell it on an e-commerce platform for 99 yuan?

Since there are no leading merchants for this type of product now, the prices are generally high. If you sell it in other channels for 99 yuan (mainstream e-commerce platforms still have high prices, such as 698 yuan), you can quickly sell it with the absolute price advantage.

Concentrate all your resources on one product to make it a hit. Use this one product to penetrate the market and achieve sales of millions. At this time, your product will be able to create a market effect. Then, use mainstream e-commerce platforms to take over this traffic and convert it.

In the electric toothbrush industry, there is a brand called "Duoxer". A friend in the industry once told me that an electric toothbrush with a resonant structure could not be produced for less than 100 yuan. As a result, not long after, Duoxier’s retail price was directly reduced to 99 yuan, and it was selling like hot cakes at the time. Then we collaborated with Alibaba to launch a “Three Lives Three Worlds Ten Miles of Peach Blossoms” themed event, which also sold very well.

However, these actions alone are far from enough.

1. When the market effect is formed, you need to upgrade your products and provide tiered pricing. Simply put, you need to plan and layout your product well.
2. When the market effect is formed, you need to promote it on the e-commerce platform. You will find that with the support of market effect traffic, it will be much easier for you to launch a hit product.
3. This is also the most important link. Behind those products sold for 99 yuan is a living person. We must add them to the WeChat platform through some method. Since the initial 99-yuan transaction has established initial trust, you need to use a mechanism to encourage these customers to repurchase (upgrade products or highly related products). More importantly, use another mechanism to screen users step by step, develop them into partners, and let them help you share sales.

Gradually the market will enter the second stage of price war, but since you have seized the market with price from the beginning, when others enter the price war, you will have to enter the third stage and do a good job of the agency/distribution channel through operations.

However, in order to do this step well, you must first add users to the WeChat platform, otherwise this step will be in vain. As for how to add users to WeChat, how to screen users, and how to operate, you can purchase some courses to learn.

In the training industry, there is an organization called "JiXhui", which is one of the best in user operations. In 2017, I spent 3,600 yuan to join, and all I got were some online courses and one offline learning opportunity. Later I found out that the 3,600 yuan membership fee was just a lead-in course.

Then, through two days and one night of offline learning, a group of users are selected to enter the next stage of high-priced learning and business guidance. The fee seems to be more than 100,000 yuan. The exact amount is uncertain, but it is calculated in units of ten thousand.

What happens after you finish this expensive course? We will further screen out business partners, similar to strategic cooperation, with fees starting at millions of yuan.

In 2019, according to friends in the circle, the agency's revenue was more than 40 to 50 million. It's really hard to believe.

When channels and agents are almost established, you need to form your own business model and establish your own business closed loop. This will determine how big you can be and how far you can go.

Taking "JiXhui" as an example, the most senior teacher in it is its founder. However, a person's energy is limited. Even if he attends classes every day, he can only complete them for 30 days, right?

But the founder was very smart. He established a mechanism to screen and train lecturers, and then copied his mature system to the lecturers. In this way, the founder's system immediately becomes a replicable business model, which is extremely powerful and makes it easier to make money.

Once the business model is successful, how to expand it further? Next comes the capital.

Did you see it? When you operate according to rules, everything is clear and predictable. So when you operate outside of traditional e-commerce platforms, the vast ocean and stars are your limits!

Okay, let’s review today’s content. There are two knowledge points:

The first is the "market law", that is, business competition generally follows the following development laws:

• Phase 1: Supply War
• Phase 2: Price War
• The third stage: Operational war/channel war/brand war
• Phase 4: Pattern War
• Phase 5: Capital War

Then there is "jump out of the platform to operate":

The core of operating outside the platform is to operate according to market rules. There are three key points:

1. Find early products and establish an absolute price competitive advantage with a time difference.
2. Concentrate all strength and resources to launch a blockbuster product to penetrate the market and create a market effect.
3. Add users to WeChat, do a good job in private domain operations, and establish a business model.

Today’s content is mainly at the level of ideas, or even at the level of “Tao”, without any specific “techniques”. I know a lot of people like something that is more practical, preferably something that can be used right out of the box. But don't be anxious. There is a saying that goes, "If you have the way but not the technique, you can still learn the technique; if you have the technique but not the way, you will only be stuck with the technique." As long as the direction and ideas are right, things on the operational level can be varied.

Finally, it will become increasingly difficult for e-commerce operators in the future. Only by upgrading their knowledge and skills can they survive in the competition. A good reference direction is: according to business rules, jump out of the e-commerce platform, and do a good job of private domain operations based on the WeChat ecosystem to make your products soar.

Author: Xiucai Youliao

Source: Xiucai Youliao