Will live streaming sales end sooner or later?

It is undeniable that live streaming with goods has indeed brought in a huge amount of transactions and brought considerable wealth to internet celebrities. The popularity of live streaming with goods has even led to the hot sales of live streaming with goods training courses. Even Luo Yonghao does not want to miss this opportunity and has threatened to enter the live streaming with goods industry.

From the perspective of outsiders, live streaming has created a business miracle, reconstructed the commodity trading model, and is likely to become a trillion-dollar market in the future.

However, through my in-depth understanding of the live streaming e-commerce industry over this period of time, I found that the reality is not as good as everyone imagined. I even saw the potential crises in the live streaming e-commerce model. These crises will ruin the future of live streaming e-commerce, and live streaming e-commerce is coming to an end.

How did this conclusion come about? Please read on.

• 1. The business model of live streaming is unhealthy
• 2. Bad money drives out good money
• 3. When everyone is immune, live streaming sales will die

1. The business model of live streaming is unhealthy

The live streaming e-commerce business model refers to the cooperation model between merchants and live streaming influencers. There are currently two types: service fee plus commission and pure commission cooperation.

There seems to be nothing wrong with this view. Let me show you the specific data: service fee plus commission. The service fee ranges from several thousand to several hundred thousand, depending on the number of fans of the Internet celebrity. How much is the commission? 15 to 20 points. Cooperating with a well-known live-streaming influencer, with a service fee of 400,000 plus 20% of sales volume, doesn’t it feel like the pressure has doubled instantly?

Then let's cooperate on a pure commission basis, which is equivalent to CPS, and share the profits based on sales volume. This is safer and has lower risks. So how many points is the commission for pure commission cooperation? 50 points! Oh my god!

Let me ask, how many points of profit does your product have? If you sell 100 units of a product worth 100 yuan, with sales of 10,000 yuan, you have to give 5,000 yuan to the influencer and keep 5,000 yuan for yourself. Is it possible to make a profit from the 5,000 yuan? It is possible, considering that the profit margin of cosmetics can be over 90%.

So, we can see that live streaming sales by internet celebrities started with the category of cosmetics and skin care products. The benefit is that it added a new profit growth point to this category and set a good start for internet celebrities to monetize. The disadvantage is that when other snacks and daily necessities enter the market, they find that the high-price model suitable for beauty products is no longer suitable for them.

The profit of snacks is less than 10 points, so half of the sales should be given to the internet celebrity. Remember, it is sales, not profit. What’s even worse is that the prices of goods in the live broadcast room are all rock-bottom prices, and the profit itself is extremely low.

Those non-beauty and skincare merchants who hire internet celebrities to do live streaming to sell their products are basically losing money to gain publicity. So why do we rarely hear businesses complain? Let me tell you a story and you will understand.

Xiao Jin met a very beautiful girl on his way home at night. The girl said, "Brother, come to my house and play." With the intention of helping others, Xiao Jin followed the young lady home without saying a word. Just when we were about to get down to business, a group of big men jumped out and said that Xiao Jin had committed a crime. You know, should we settle it privately or publicly? Xiao Jin was very scared and said that he would just settle it privately. He transferred 5,000 yuan to the other party and went home.

The next day, the police came to the door and asked Xiao Jin if he had been set up by a honeypot last night. Xiao Jin replied: No! How is that possible! I don't want to save face!

It’s not to say that the cooperation with internet celebrities to sell goods through live streaming is a scam. It’s just that from the perspective of merchants, they have invested hundreds of thousands of dollars in online celebrities to sell goods in the hope of gaining brand exposure. Even if the profits are not good, they have lost all their money.

But the external publicity is still that we are cooperating with a certain internet celebrity, bringing in 8 million worth of goods in one night, setting a new sales record. Everyone is welcome to come and buy. This is just a matter of swallowing one's anger.

I didn't dare to speak out loud about the loss I suffered, I could only keep it in my heart, or complain to the people closest to me. Alas, I suffered a huge loss by cooperating with the internet celebrity this time. There are many examples like this. If you have friends who have worked with internet celebrities to sell products, you might as well ask them indirectly how they are doing.

In the business of influencers selling products, the influencers make money, the consumers make money, and the merchants lose money. You have to know that for a business model to operate smoothly, all parties involved must gain something. If the sponsor does not make money, can this model continue? Of course not.

Do you really think your sponsor is a fool? Then why are there still many companies scrambling to cooperate with Internet celebrities? Because big companies don't lack this little money, it's no harm to spend hundreds of thousands to increase sales. But small and medium-sized enterprises must not be led astray by big companies.

2. Bad money drives out good money

The commission distribution is unreasonable and the merchants cannot make any profit. In the future, internet celebrities will reduce the commission ratio, and the live streaming and selling model by internet celebrities is still worth pursuing. But there is a new situation, which is destined to be a dead end for live streaming sales by internet celebrities, that is, bad money drives out good money.

Among live streaming e-commerce platforms run by influencers, there is another group of players who do not care about the user experience at all and only consider profit as their starting point.

Everyone knows that the biggest selling point of live streaming by internet celebrities is the low price, but the commission is high, so merchants cannot afford it. Actually, two words are missing here: formal. Formal merchants cannot afford to invest, and informal merchants such as camel milk, honey, belts, brand shoes, high imitations, etc. After reading this, readers who are familiar with the gray industry should have some understanding.

Yes, such products, like skin care products, also have huge profits, with profits starting at 300~400%, and they can afford the investment.

After doing advertising for a long time, I noticed that regular e-commerce merchants never put in information flow ads, because the profits simply cannot cover the advertising costs. However, we can also see e-commerce advertisements in information flow ads. You can guess the tricks yourself. One is inferior products, and the other is user fraud.

Last time, in the live broadcast room of an internet celebrity with tens of millions of fans, I saw the host slash the price of snacks from 29.9 yuan quoted by the merchant to 9.9 yuan. Oh my God, I couldn’t help but want to scold the host at that time. How could he exploit the merchants like this? Even if you have fans, you can't bully others too much.

The helpless merchant finally said, okay, okay, I'll just place 100 orders as a benefit. The anchor said, place an order for 5,000 and I will pay for it. I was so grateful at that time, thinking that the host was such a nice person and he deserved to have so many fans.

As I got to know more about the tactics used by influencers in live streaming to sell goods, I found myself being slapped in the face. Yes, the one above is a play performed jointly by the anchor and the merchant, which is called a script in the industry. Newcomers who become internet celebrities and sell goods through live streaming will receive training. 29.9 yuan is a price anchor, and the actual cost is less than 5 yuan. The cooperation between both parties makes the audience feel that they have got a great bargain and they place orders in a hurry.

This kind of routine has been played out offline a few years ago, and now it has moved online, and it even fooled an old driver like me. Alas, there are always talented people emerging, and the predecessors have been beaten on the beach. No wonder the return rate of live streaming products is so high. This is one of the reasons.

Are there many such merchants selling inferior coins? I’m not quite sure either. Ever since I learned about this routine of internet celebrities, now whenever I see internet celebrities bargaining with merchants when selling goods, I feel that they must be acting. I even began to doubt whether the live broadcasts of the top male and female celebrities are also played in this way. Now that the trust between people is gone, can internet celebrities go far in live streaming to sell goods?

3. When everyone is immune, live streaming sales will die

A very interesting statistic is that the audience of live streaming sales is mainly in third- and fourth-tier cities. Coincidentally, the market for TV shopping is also in third- and fourth-tier cities, which makes people think a lot.

If I think about it carefully, it is true. There are very few people around me who watch live broadcasts to buy goods. If I didn’t want to study the gameplay of live broadcasting to sell goods, I wouldn’t watch it often, mainly because I don’t have the time.

As live streaming is a new thing, it is normal for the conversion rate to be high in the initial stage. Those who are engaged in operations should all know that when a new operation routine appears, the best effect is the period when the gameplay is just released, such as fission.

As more and more companies engage in fission, the effect of fission is getting weaker and weaker. Now few people talk about fission because users are immune to it, they are indifferent, and the effect has disappeared.

Is this also the trend for live streaming sales? Yes, when the official account first started to monetize, one tweet could sell 20 cars. Now, if you push it and sell 2, you win.

Why do internet celebrities who do live streaming work so hard, for more than 10 hours a day? Is their life only about live streaming? Will they have to spend the next 70 or 80 years of their lives live streaming 10 hours a day? No, there is a saying that these internet celebrities know that the popularity of live streaming sales is limited, and maybe it will only be for one or two years. If they don’t try now, when will they?

It's like there is a gold mine and you can only mine it for two years. Wouldn't you like to work 24 hours a day to make enough money? Anyway, you will have plenty of rest days in the future. Live streaming merchants have been cheated too many times and don’t want to invest anymore; users have been cheated too many times and don’t want to buy anymore; by then, only anchors with a price but no demand will be left, facing fans with no desire, staring at each other in disbelief, and the live streaming industry will be dead.

at last

Will live streaming e-commerce last far? Not necessarily. It requires guidance, regulation and sacrifice. Guide the industry towards formalization, standardize live streaming sales through rules and regulations, and regain user confidence.

Sacrifices will be a bit difficult, and top anchors need to take the lead in reducing commissions so that merchants can make money. Only by achieving win-win results can we go further together. Will it happen? It’s difficult!

Author: Cucumber Morning News

Source: Qinggua Media