what is margin in shopify

i want to talk to you really quickly,about is product pricing and margin,because these are two very very,important concepts when picking products,doing product research you have to have,your product pricing on point and you,have to have big enough margins to take,into consideration your cost of good and,your ad costs and leave some profit left,over for you to make money right so,let's hop into a screen share really,quick and i'll show you this quick,little slide so you can see product,pricing and margins very very important,you have to have,large margin in this business if you do,not have large margin in this business,you will ultimately fail so if you,source a product on aliexpress for five,dollars and you try to just sell it for,ten dollars there's a very good chance,you're not going to be profitable with,that because your cost of advertising,and cost of customer acquisition is so,large you're not going to have room left,over for profits so you need really,really large margin if you find a,product on aliexpress right your cost,for five dollars you should sell that,product for at least 30 or more now it,doesn't have to be exact right you can,sell it and try 24.95 22.95 29.95,but you should be thinking with these,really really large margins let me just,pop over to my website really quick,so i'll give you an example this product,is 22.95 and i charge 295 for shipping,so it comes out to about 26 dollars and,that product cost me 2.97,the 500 yards is 29.95 they have to pay,for shipping 295 comes out to 33,this cost me four dollars and fifty,cents right so i have really really,large margins so i can spend more money,on ads to acquire customers i truly urge,you to find products that you can sell,for at least 19.95 again the more you,can sell a product for the more margin,you're going to have the more profits,you're going to be left over with so,don't try to sell things for 9.95,13,like i did this very early on and i,really couldn't generate any profits,because there just wasn't enough juice,there for me to squeeze that lemon and,make some money right another quick tip,that people don't actually think of is,you should never price things evenly,you should always use,95.97,0.99 right for example don't sell,something for 19 don't sell something,for 20,sell it for 19.95 right the the,psychological aspect of jumping from the,teens into the 20s it's not that big of,a difference but it does matter now when,you go from,89.99 or 89.95 into the 90s and the,hundreds that makes a big difference,that's a big psychological jump so back,over to my website for example you can,see all my products are priced at,they're all priced at .95 so,22.95 29.95 54.95 89.95 right that's,just a big psychological change rather,than seeing a flat number tip my old,boss used to tell me grant cardone is if,something ends in a zero it probably,isn't true so if you tell me hey how,many calls did we make today and you,told me 400 calls that number's not true,right anything that ends in a zero is,false but you said hey we made 417 calls,it's a lot more believability to that,and the last tip i want to give you is,your target average order value should,be 50,or more right again just goes back into,the concept if you're selling something,for 50,you have a lot more margin a lot more,budget to spend on advertising to,acquire customers and still have profits,left over so i'm going to show you an,example so here's my website year to,date you can see our average order value,this year in 2021,is,dollars and 20 cents so sticking in,those guidelines if you can go over 50,or more that's the best and we've done,just on shopify uh close to 1.2 million,dollars just on this channel we have,other channels that we're selling on but,let's put that into an example so,you could see,so you can see this is my landing page,in my product page how do we actually,get to that 50 mark or more if we're,only selling 22 29 or 40 products right,so i have a,i have a few little tricks to do that,one i have this free shipping over fifty,dollars so if they spend fifty dollars,they save uh three bucks on shipping and,they get free shipping so that's just,one little subtle trick,two is having products with multiple,price points so you can see a lot of,people order the 300 500 but a lot of,people order the 90 products so it,averages out to that 50 52 mark another,trick is actually having cross sales and,upsells so watch what happens when i add,this product to cart,i have a whole bunch of product upsells,that people can add to the cart so let's,say they're spending uh the 29.95 right,they can add another 15 bucks and get,closer to that 50,they can add two of them to get free,shipping i've had some customers buy all,four of these so those are the three,tips right you wanna incentivize uh with,free shipping right free shipping over,fifty dollars to get them that fifty,dollar price point have products with,multiple price points so a cheap a,medium and an expensive version and then,again have those upsells so these are,just a few tips on product and pricing,when you're doing your product research,to take into consideration trust me they,will help you in the long run if you,take care of this now rather than do it,wrong in the beginning and try to fix it,later do it right now do it right from,the beginning build in your profit,margins have at least 60 70 80 profit,margins and you'll be golden,on to the next video

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