Business logic > Traffic logic

In the world of e-commerce, traffic and business logic are the two wheels that drive business growth. This article uses an actual Xiaohongshu seeding project case to reveal that even with high ROI and excellent traffic operations, a project may fail due to business logic issues such as supply chain.

A promotion note on Xiaohongshu with an advertising fee of 900 yuan brought thousands of likes and a GMV of more than 100,000 yuan. In the end, within three months, the promotion fee of less than 200,000 yuan brought a GMV of 4 million yuan, with an overall ROI of more than 20%.

However, despite such a high ROI, the partners chose to abandon this project. This was the e-commerce project that the partners tried at the end of last year, which involved planting seeds on Xiaohongshu and completing transactions on Taobao.

The logic of the project is actually very simple. Select bloggers on Xiaohongshu who match the product style, give the blogger a free sample or pay an advertising fee, and then have the blogger write a product recommendation note and publish it to his or her personal Xiaohongshu account. Finally, guide users to the Taobao store to complete the transaction through the note content and comment area.

As mentioned at the beginning of the article, the project has the genes of traditional Taobao e-commerce and understands the content of self-media platforms. The initial results of the project were very good, and many popular notes with thousands or tens of thousands of likes appeared.

At the same time, past e-commerce experience also tells us that although the women's clothing market is large, the supply chain of women's clothing is also difficult. Therefore, in order to reduce the risk of product inventory, our products are pre-sold for 15 days.

However, we still underestimated the difficulty of the women's clothing supply chain and overestimated the "contract spirit" of traditional factory owners.

Even if we lock in orders in advance through pre-sales, the factory still cannot produce the goods!!!

It is the end of the year, which is the peak season for women's clothing sales and the peak production period for factories. At this time, the factory will only give priority to meeting the needs of large customers with long-term cooperation and stable orders. As for small customers like us who are just scattering, they will delay it for a day.

Even after the 15-day pre-sale period, our orders have not been shipped. Even more so, even those Taobao stores that have cut off traffic with the same products have already started shipping, but we still have a large number of customers who have not been able to ship...

The consequences of delayed delivery are horrible. At the beginning, we estimated the return rate to be 50%-60%, but we didn’t expect that the final return rate would almost soar to 90%.

There is no point in being angry, and the facts will not change because of anger. Exhausted physically and mentally, after processing the last batch of inventory, the partner shut down the project.

In fact, in terms of traffic, the partners have done a very good job, even outstandingly.

At the launch level, we select "grass-planting bloggers" that match the product style, and avoid some "fake data" bloggers through experience and research. Finally, there is a super strong execution team that has accumulated and built a women's clothing blogger database of nearly a thousand people.

In terms of content, although the notes are all made by experts, the core of the hot-selling clothing notes is still the product style itself. In terms of selection, the partners can be said to have extremely rich experience, and the emergence of each hot-selling product has a strict screening and testing process.

Of course, I will not go into details about the specific process and data indicators for selecting bloggers and testing models here, as that would be another long article. I will ask my partner to share this specifically later if there is a chance.

In short, we did not hold the project back in terms of traffic operation. However, the project did not succeed in the end because of our advantage in traffic.

In this project, business logic is more important than traffic logic. Clothing retail is a very traditional industry, which must follow some basic business logic of this track, and traffic logic is only one part of this big logic system.

Many people come to me to communicate, hoping to learn how to acquire customers, how to invest, and how to promote products. They are always impatient, but I always ask them about their team, resources, and advantages. Finally, I cruelly tell them that they may not be suitable for this project, or that this project is not suitable for such operations at the current stage.

I can actually understand their desire to achieve success, and I don't have the heart to "hurt" them so cruelly, and I don't want to play the role of the "bad guy". But when I learned that they had no experience, only a team of one or two people, and a budget of only tens of thousands, I had no choice but to follow objective laws and tell them the facts.

Is it feasible to invite influencers to recommend products through Xiaohongshu and then complete the transaction through Taobao stores? Is this process and technology important?

Of course it is possible, and this technology is certainly important.

In fact, if we were not doing women's clothing at the time, but other tracks with simpler and more stable supply chains, perhaps this track would have been successful.

Even if we are making women's clothing, if there were dedicated people shuttling between factories to solve supply chain problems, if there were on-site managers in the cooperating factories to supervise the production of clothing; or if we directly cooperated with a mature women's clothing supply chain, with shared interests and risks, then everything would be much better.

Although this project has been stopped, the experience of this project has also given us valuable wealth. Whether it is the business thinking brought to us by the project itself, or the Xiaohong advertising experience and blogger resources tempered by the project, they are all very valuable experiences and resources.

I have written before on the official account that the thinking of students is personal ability = ability to do things, but the thinking of adults is resources at hand = ability to do things.

The development stages of a market are divided into market-driven, organization-driven and innovation-driven.

The market-driven model is the era of market dividends. It is important to dare to think and act. It is not a big problem if the products, operations and management are a little rough. Once the market dividend is over, it will enter the organizational-driven model. While making good products, you also need to reduce operating costs and improve operating efficiency through your organizational management.

In the end, organizational management will only lead to endless internal competition, competition in prices, competition in services... and ultimately through innovation, changes in productivity or production relations will be achieved, and one can break out of the internal competition.

The benefits of self-media are becoming less and less, and everyone needs to realize this and accept this reality as soon as possible.

Thinking clearly about what you have, what you want, and what you have to give up is very important for both individuals and companies.