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Summary

This video discusses the realities of being an online seller, particularly focusing on profit margins and revenue structures. The speaker, an experienced seller, explains that while making a sales target of 10 million KRW in monthly revenue is achievable, the profit margins are often much smaller than expected. Factors such as marketing costs, platform fees, and operational expenses reduce the final earnings. The speaker emphasizes that while profit margins may appear low, increasing revenue is the key to business success. The current era offers opportunities to scale sales, but understanding the cost structure and focusing on increasing sales volume is essential for long-term success.

Takeaways

• 😀 Takeaway 1: Margin understanding is crucial for sellers. The script explains how to calculate margins, accounting for product cost, fees, marketing, and taxes.
• 😀 Takeaway 2: Selling on platforms like Coupang can seem easy, but the margins are often lower than expected due to various fees and operational costs.
• 😀 Takeaway 3: The current era makes it easier to generate sales, but the competition and costs are higher, leading to slimmer margins for sellers.
• 😀 Takeaway 4: Even with a high sales figure like 10 million KRW per month, the actual profit is much lower than anticipated due to fees, taxes, and other expenses.
• 😀 Takeaway 5: Understanding the structure of your sales, including fees like marketing costs, delivery, and platform charges, is key to calculating realistic profits.
• 😀 Takeaway 6: The script emphasizes that even though sales are increasing, the percentage of profit a seller keeps is much lower compared to previous years.
• 😀 Takeaway 7: For 1-person sellers, reaching 10 million KRW in sales is achievable, but understanding the underlying costs and margins is essential to avoid feeling disappointed by low profits.
• 😀 Takeaway 8: Sellers need to accept that margins are thinner due to external costs such as logistics, platform commissions, and advertising fees.
• 😀 Takeaway 9: To succeed as a seller, focusing on increasing sales rather than solely on profit margins is the key. The more you sell, the better your overall profit can be, even with thin margins.
• 😀 Takeaway 10: The overall takeaway is that while the current market offers easier opportunities to make sales, understanding the financial structure and focusing on growing revenue, not just cutting costs, will lead to success.

Q & A

Why is it common for sellers to give up even if they reach a monthly sales of 10 million KRW?

Sellers often give up due to a misunderstanding of profit margins and the overall sales structure. Many fail to realize that while generating high sales is achievable, the actual profits can be much smaller due to high costs like fees, marketing, and shipping.

How do profit margins differ between the past and present for sellers?

In the past, sellers could retain a higher percentage of profit, sometimes around 30%, due to lower costs for things like shipping and staffing. Today, despite generating high sales, sellers are left with lower profit margins due to increased fees, external services, and the growing costs of marketing and logistics.

What role does the profit margin calculator play in understanding business performance?

The profit margin calculator helps sellers understand the true cost structure of their sales. It takes into account the cost of goods sold, various fees (such as platform commissions and advertising), taxes, and shipping, allowing sellers to calculate their actual take-home profits.

What is the significance of understanding a seller's cost structure?

Understanding the cost structure is crucial for realistic business expectations. Without a clear understanding of costs like platform fees, marketing expenses, and logistics, sellers may miscalculate their profitability and become disillusioned when their profits appear lower than expected.

How has the process of selling changed in recent years?

Selling has become significantly easier due to the rise of platforms like Coupang, where one can list products with minimal effort. Sellers no longer need to handle logistics, marketing, or customer service directly, as these tasks are often outsourced or handled by the platform, making it easier to scale sales.

Why is a 10% or 15% profit margin considered acceptable in today's selling environment?

In today's e-commerce landscape, a 10% or 15% profit margin is considered normal due to the high fees and additional costs associated with platforms like Coupang. While margins may seem low, the ease of generating sales and the reduced need for staff and infrastructure make it a viable model for many sellers.

What challenges do sellers face when scaling their business, even with higher sales?

Sellers face challenges like increasing external costs (e.g., shipping fees, advertising), as well as the complexity of managing larger operations. As they scale, even though sales grow, a larger portion of the revenue is allocated to these costs, leaving less for the seller's profit.

How does the cost of external services impact the profitability of individual sellers?

External services such as marketing, logistics, and customer service management are crucial but expensive. As sellers rely on platforms that handle these functions, they pay for the convenience, which significantly impacts their profit margins. The higher the service costs, the lower the profits that remain after fees.

What advice does the speaker give for sellers looking to increase their profits?

The speaker advises sellers to focus on increasing sales rather than obsessing over small profit margins. By scaling their sales volume, they can offset the impact of lower margins. Understanding and accepting the costs involved while pushing for higher sales is key to succeeding in this business.

Why does the speaker say that the current era is the best time for selling online?

The speaker believes the current era is ideal for online selling because platforms like Coupang make it easier than ever to generate sales. Sellers can now operate as one-person businesses without the need for a large staff or infrastructure, making it easier to succeed with lower upfront costs.