1. Profit = store sales * net profit margin

In simple terms: Profit = sales amount * (net profit / net sales income * 100%). That is to say, whether the store participates in activities or the cost issues in the promotion need to be taken into account, and then the product of the net income and sales amount is the total profit of the store.

2. Profit = number of people who buy goods in the store * average customer price * net profit

From this formula, it can be seen that the profit of the store and the number of people who buy the store are directly related to the average customer price and cost of Taobao. Therefore, when promoting and operating Taobao, it is necessary to promote it reasonably according to the profit margin of the store. For example, when using Taobao through train, do not blindly pursue the highest bidding ranking and ignore the cost issue, so as to make high profits within a reasonable range. Mu Sicheng reminds everyone that when pricing the average customer price, do not disrupt the normal crowd positioning of the store for the sake of sales.

3. Profit = Promotion Display * Promotion Conversion Rate

Taobao promotion is something that every merchant needs to implement, so its profit must also be mastered and understood. The so-called promotion profit is the total gross profit minus the promotion fee.

(1) Total gross profit = sales volume of promoted goods * product profit - fixed cost.

(2) Promotion fee = 20% of sales.

From the above, we can understand that it is normal for Taobao profits to reach 5%-15%, but the profits of Taobao products in different industries are also different.