Is 9.9 yuan marketing profitable?

There are products priced at 9.9 yuan on many e-commerce platforms. Not only are they only 9.9 yuan, but they are also free shipping nationwide. Will such pricing bring profits to businesses?

Have you ever bought a product worth 9.9 yuan? Even lower, and free shipping nationwide!

I have bought many products priced at 9.9 yuan. Not only are the portions large, but the quality is also very good.

In addition to paying attention to whether the product itself is worth the money, what I want to ask is, can you make money by doing 9.9?

Since I have been working on e-commerce related things in the past one or two years, I had the opportunity to try the 9.9 yuan business and clear up the confusion in my mind. I have recently started several 9.9 yuan projects, such as 5 pounds of apples with rock sugar fillings for 9.9 yuan, 6 packs of tissue paper for 9.9 yuan, and 3 buckets of hot and sour noodles for 8.9 yuan.

So I want to take advantage of this enthusiasm to share with you, hoping that it will be inspiring to you. (Purely a case, for understanding only)

Special note: The 9.9 in this article refers to goods priced around 9.9.

1. Why do users need 9.9 yuan?

As long as you open the mainstream e-commerce platforms on the market, you will find that there are almost all 9.9 yuan channels, especially Pinduoduo, Taojiji and other platforms, which have taken 9.9 yuan to the extreme.

The reason why we want to make it for 9.9 yuan and the reason why we can make it for 9.9 yuan are closely related to market demand. 9.9 yuan, there are a large number of users who particularly need it.

(1) It’s only worth 9.9 yuan

The value of a commodity determines its price. In our daily lives, there are a large number of ordinary commodities that are worth only RMB 9.9 or less. For example: a mobile phone case, a roll of tape, a bag of instant noodles, a cabbage, and a pound of oranges.

The 9.9 item covers a wide range of categories, from daily necessities, food, fresh produce, clothing, mother and baby products, etc.

(2) Low price

Nowadays, whether it is a roadside mobile stall or a one-dollar store or ten-yuan store on the streets of a small town, many goods are very cheap.

You know, a serving of Shandong pancake costs 7 yuan, and a serving of stinky tofu costs 8 yuan. So, 8 pairs of socks cost 9.9 yuan, a data cable costs 3 yuan, and 10 pencils cost 5 yuan.

For many people, the price is considered super affordable, so the decision to place an order is very low.

(3) Great value for money

The low price is one reason, but another important reason is that you spend 9.9 yuan and get value far beyond 9.9 yuan. That’s why on the roadside, 3 pounds of oranges for 9 yuan, a red-fleshed pomelo for 7.9 yuan, and 2 cabbages for 9 yuan are so popular.

This time, I made sugar-coated apples for 9 yuan and 9 pounds, about 70mm in size, at least 10 pieces, and free shipping.

Picture: The 9.9 yuan rock candy heart is beyond users’ imagination

The feeling users get when they hold the fruit in their hands is beyond imagination. When they cut the fruit and find out that it is made of rock sugar, everyone praises it even more. When we launched the product at 9.9 yuan for 5 kilograms, it was sold out immediately.

Therefore, there has always been a demand for 9.9 yuan and it will always exist.

2. Why can merchants sell for 9.9 yuan?

No one would reject the idea of ​​cheapness, but users want things to be as cheap as possible. Can this be achieved?

The answer is: Yes.

(1) The product is cheap

Paper towels: The first product we chose was paper towels, because paper towels are a product that is in high demand and used frequently. Whether it is a household or a takeaway or catering store, there is a need to stock up.

After much study and understanding, we found that a pack of paper towels with 60-100 pieces, double layer, and less than 90mm*12mm can have a factory cost of 0.6-0.8 cents. So we can make 6 packs, 8 packs or even 10 packs of paper towels in a box and sell them for only 9.9 yuan.

Apple: I believe everyone has seen the news about Apple's slow sales this year.

The purchase price in previous years was 1-3 yuan, but now it is around 0.6-1 yuan, and it can be even cheaper if the quantity is large.

This year, we have teamed up with some fruit farmers and merchants in Shandong and Shaanxi to directly pick and ship apples from the production area. The cost of 5 kilograms of apples is within 3.5-4 yuan.

In addition to apples and paper towels, as mentioned above, there are also a large number of commodities such as tangerines and oranges, the prices of which are all within 9.9 yuan.

Therefore, it is not difficult to find products for 9.9 yuan.

(2) Low freight

Once the product is found, the problem becomes getting it to the user.

If you set up a stall, or go to the local vegetable market or supermarket, the logistics cost is very little, just the cost of gas. However, when it comes to delivering goods that cost 9.9 yuan to users across the country, express delivery costs become a key factor.

As we all know, if an individual asks JD.com, SF Express, STO Express or other couriers to send a parcel, even if it is just a small document, it will cost 6-8 yuan within the city and more than 10 yuan across provinces.

How do they make money by selling such an expensive express delivery for 9.9 yuan?

In fact, most industries follow the principle of paying more for larger quantities, and the same is true for express delivery.

Let’s take Yiwu, a paradise for small commodities, as an example.

In Yiwu market, for orders of more than 3,000 pieces with a weight of less than 0.3KG, the price can be reduced to 1.5~1.7 yuan, with free shipping nationwide. Even though there have been policy fluctuations recently, the first weight can be kept within 2.5 yuan, and the fee will increase by 0.1 yuan for every 0.1kg increase in weight. Even SF Express’s prices can be as low as 3.5 yuan.

Why are the express delivery fees in Yiwu so low?

In addition to the improvement of various infrastructure such as transportation and vehicles, large quantity is also the core.

Data shows that in the first half of 2019, the total express delivery business volume nationwide was 27.76 billion pieces, of which Jinhua (Yiwu) City's business volume was 236,404.1 million pieces (about 2.4 billion pieces), accounting for 8.6%, ranking second in the country after Guangzhou's 292,561.7 million pieces. The express delivery volume of Yiwu accounts for 30% of Zhejiang's express delivery business volume.

Therefore, a siphon effect has emerged. Many e-commerce companies have their offices or warehouses in Yiwu. Or they send the goods to Yiwu by truckload, and then pack and ship them from Yiwu to consumers across the country.

(3) Ability to make money

A box of apples costs 9.9 yuan. The cost of 5 kilograms of apples is 3.5 yuan, plus the express delivery fee is less than 4 yuan, so you can still make 2.4 yuan by selling it for 9.9 yuan.

Of course, labor costs, packaging costs and other costs need to be taken into account here. But no matter what, overall, you will not lose money.

The 9.9 yuan apple promotion we did this month still left the fruit farmers with a profit of 1-1.5 yuan per order after final calculation. We only made 1 yuan from 5 kilograms of apples, but we sold 50,000 pieces at one time. For fruit farmers, not having to delay payment for goods is better than anything else.

And since users can eat apples that are several times cheaper than those on the market, why not?

Photo: A paper towel product on Taobao

So, apart from Apple, is the same principle true for products such as paper towels, pencils, data cables, instant noodles, mobile phone holders, etc.?

3. What should we pay attention to when doing 9.9?

After understanding the general situation of 9.9, some people may want to give it a try.

Don’t be impatient. Let me tell you what you need to pay attention to when making the 9.9 yuan product.

(1) Ensure quality

In any sales service, product quality comes first. If the product is not good, no matter how good everything else is, it cannot be saved. Therefore, we must ensure the quality of the products we provide.

Don’t be like the second, third or even fifth category e-commerce companies that do shady, one-off business and cheat people. You have to know that the 9.9 yuan sales volume relies on large quantities, and large quantities rely on repeat purchases, word of mouth, and small profits but quick turnover. There are also products such as apples, oranges, bread, etc., which have a relatively high damage rate.

Picture: 9 yuan 9 orange

For example, the Ehime Orange No. 38 and Sugar-coated Apples that we made recently were both damaged to some extent. It’s a small problem. We will subsidize users 1 yuan. If the bad fruit rate is high, they will have to resend it.

That order would mean a loss of 7 or 8 yuan. Therefore, when you are selling products for 9.9 yuan, you must ensure the quality of the products.

(2) Pay attention to product selection

Not all products are suitable for the 9.9 yuan price. In other words, even if the price of some products is below 9.9 yuan, you have to rethink if you want to have a high repurchase rate.

Seasonal: There are spring clothes, summer clothes, autumn clothes and winter clothes throughout the year. So at any time, if you plan to sell for 9.9 yuan, you have to think about whether there are seasonal products, preferably those that everyone needs right now. For example: selling T-shirts in summer, selling oranges in autumn, and selling dates in winter.

The advantages of choosing seasonal products are that they have high user awareness, abundant product supply, and price advantages.

Low loss: In order to achieve value for money, the net profit of most 9.9 yuan products is relatively low, because the profit is actually the hard work fee.

Therefore, we must also find ways to reduce losses from the product perspective, especially for fruits. Although users have a high degree of acceptance, we really cannot afford the losses. The express delivery services of STO Express, including SF Express, are not very fast except in Jiangsu, Zhejiang and Shanghai, as long as the delivery is across provinces, the delivery will be dropped many times on the way.

Therefore, when selecting products, try to avoid products that are fragile, easy to rot, and have a short shelf life. For example, we had to give up on making the popular purple rice bread and custard bread because they had a shelf life of only 7 days.

High frequency: Another dimension of product selection is the products presented to users. We must choose high-frequency products.

Frequently used goods are not only consumed quickly, but users also have the habit of stockpiling them, so one more piece is not considered too much. Of course, if the quality of your products is acceptable, user loyalty for some high-frequency consumed products may not be particularly high. Paper towels are the best example, as well as garbage bags.

Paper towels are not only used frequently and in urgent need, but also come in various varieties such as tissue paper, wet wipes, toilet paper, kitchen paper towels, children's paper towels, and adult paper towels. In fact, fruit is a high-frequency demand, but the rotten fruit rate must be controlled. As for other foods, such as firewood, rice, oil, salt, sauce, vinegar and tea, you can try them if you have the chance. For example, we are planning to make some rice recently.

(3) Cost accounting

9.9 yuan may not be that profitable, but it is very likely to lose money. Therefore, we must control costs reasonably, in addition to goods and shipping costs. Be sure to make good estimates in terms of labor efficiency, product packaging, losses, etc.

For example, in terms of packaging: flexibly match according to the product, such as socks, tablecloths, etc., in fact, only one express plastic bag packaging is needed.

There is no need to use boxes and other packaging, which wastes money. It is better to spend this cost on the product. Even if you buy 5 pairs of socks and get 1 pair for free, it is more practical than spending it on packaging. For items like fruits, you must use two layers of net bags or dividers. This kind of extra packaging may cost an extra 70 or 80 cents.

But if you pack one less, there is a high chance that there will be 3 or 4 more rotten fruits. We learned a lesson from this 9.9 yuan fruit event.

(4) Cold start traffic (startup companies)

9.9 yuan, as long as the product is good, no one will refuse it and someone will definitely buy it.

If you are a mature platform and sell for 9.9 yuan, it should be easier to get started. Choose the right products, control the rhythm and gameplay, and sales and results will definitely not be a problem.

But if you are a small team in the initial stage, you must pay attention to the cold start traffic at the beginning. Because even though your product is only 9.9 yuan, you can only promote it if enough people know about it.

Therefore, traffic is very important, and there are many ways to play. Here are three simple references:

1. Find IPs, KOLs, and KOCs with high traffic to cooperate with, such as finding several team leaders with hundreds or thousands of people
2. Build a few or a dozen WeChat groups with more than 100 people to store water in advance
3. Set some interest points, such as how many new people you invite and how many orders you sell to get tiered rewards

Remember, without traffic, no matter how good the idea is, it’s all bullshit.

(5) Pay attention to frequency

Whether you are selling a single product or a platform, you must pay attention to the frequency of 9.9 yuan, especially for certain single products. Because once you sell a certain product for a long time, it will easily create a stereotype in the minds of users, who will think that your product or similar products are only worth 9.9 yuan, and it will be difficult to raise the price later.

It's like when you go to a 10-yuan store and there's something on sale for 50, 60, or even 100, you'll hardly buy it. The same is true when we shop on Pinduoduo.

For some items, calculate user consumption and the time of next purchase and launch them appropriately. This can bring about fission and word of mouth. Otherwise, if you keep doing this, users will not feel that it is cheap and scarce.

(6) Pay attention to the matching of sku

Some 9.9 yuan products are destined to make no money, not only because the products themselves are of high value, but also because there are various risks of compensation. But why do businesses continue to do this?

On the one hand, merchants hope to increase store search display, ranking, sales, etc. through the 9.9 yuan; on the other hand, they hope to use the 9.9 yuan to attract traffic and then guide users to buy goods of other specifications.

For example: If we sell a kind of hot and sour noodles, we only make 1 yuan for 3 buckets, but 4 yuan for 6 buckets, and about 8 yuan for 12 buckets, because the express delivery costs are almost the same.

This is also why many products on Taobao and Pinduoduo have multiple specifications and SKUs. The money the merchant earns is completely different if you buy one or two. :We have calculated that only 25% of users buy 3 buckets of hot and sour noodles, and more than 50% of users choose 6 buckets, so all in all, it is not a loss.

In addition to small profits but quick turnover, setting up multiple specifications is the secret of making money for most 9.9 yuan merchants.

4. Can 9.9 be a platform?

Since 9.9 yuan can make money, can I just create a 9.9 yuan platform?

(1) It is not recommended to create a 9.9 platform

If this question had been raised 7 or 8 years ago, I think it would have been possible to give it a try. But now, I don’t recommend building a platform like 9.9 yuan.

Because the risks are extremely high and the profits are very low, all the money earned is hard-earned. For the platform, the investment costs for personnel, technology development, investment promotion, and product selection are all the same. Moreover, it is so difficult for most e-commerce platforms to acquire customers nowadays, and it is really difficult for the platforms to sell low-profit products such as 9.9 yuan.

However, 9.9 yuan can be used as a diversion section or a special topic on most e-commerce platforms, which is also the current common practice.

(2) 9.9 yuan is suitable for drainage

From the perspective of the platform or organizer, I would suggest making the 9.9 yuan product into a traffic-generating product. But there is a very important premise. Don’t ever fantasize about using products to attract traffic and also about making so-called gross profits.

9.9 yuan means that you use traffic-generating tools, which means you want to set the price to the extreme to attract users to the platform.

For some commodities, the subsidy can even be directly reduced to less than 9.9 yuan. Regular platform delivery is a strategy, but giving benefits directly to users is more tangible and easier for users to perceive.

For a product that costs 14.9 yuan, the subsidy is 9.9 yuan, while for a product that costs 9.9 yuan, the subsidy is 5.9 yuan. Set up the links of attracting new customers and providing rewards in the middle to control the cost of attracting new customers.

For some platforms, the cost is extremely low and completely controllable, even if it is just a way to take advantage of others.

There is no need to worry too much about the platform. Those who come here must be those who are looking for freebies. I have done this myself and I understand it very well.

This is also what platforms such as Pinduoduo, Taojiji, Mengtui, and Jingxi are doing, because attracting new users and traffic does have an effect.

The above is the small business of 9.9 yuan that I shared with you today. I hope it will be inspiring to you.

Author: Shili Village

Source: Shili Village (ID: shilipxl)