New Konga Commission Rate
One of the main reasons why people choose to become an entrepreneur is because of the freedom and flexibility that comes with. Freedom in the sense that, you get to decide how many hours of work you’d like to put in per day, you get to decide when you work and most importantly, you get to decide how much profit you want to make.
In a way, selling on established market place like Konga provides that kind of freedom for mini importers. Because they are established brand, it’s much more easier for new businesses with little or no public recognition and trust to rely on the established Konga brand name and make sales to online customers. In return, Konga get to charge merchants a small amount of commission per sales. The percentage of commission charged depends on the category of goods being sold.
In today’s post, I would share the recent changes in Konga commission system, how small business owners can survive and make reasonable profit even with the increased commission and will also shed more light on why you should consider setting up your own e-commerce store.
Konga has three tiers of merchants, the difference between each tier is based on the number of sales they make on monthly basis. The Classic plus merchants are the lowest tier of merchants, they generally make small sales as compared to other tiers and as such, they pay the lowest percentage of commission to Konga. The way the commission system works is such that, the higher your sales, the higher your commission rate, which means, Classic merchants would pay a slightly higher commission, higher than classic plus merchant but definitely not as high as that of bronze merchants which is the highest tier.
For small and medium business, the commission system might really affect the net profit from each sales, but there are ways to market your goods on Konga, in such a way that the commission percentage won’t affect your net profit, and I would be sharing some of them with you.
The first method is to calculate the commission rate and add it on the listing price of your items. Take for instance you sell shoes, which is categorized under fashion items with 12% commission rate. A shoe that should normally be sold for #2,000, should be listed for #2,300. That way, when Konga deduct it’s commission of #276, you would still be left with #2,024 in profit. The secret here is that, people generally don’t mind paying more provided the price is not rounded up to the nearest thousand.
Another method is to list the same items several times, however with various prices. Take for instance the shoe example, you can list the same item thrice and then put a varying price of #2,500, #2,400 and #2,300. Some people would buy the same item for #2,500 while others would go for the cheaper price, either ways you’re still on the winning end of the bargain.
Doing the math, I believe market place like Konga is good for new businesses, but when you fully understand the business and you have enough capital, nothing beats starting your own e-commerce store. With your own store, you have access to customers’ data, their emails, phone number and other shopping metrics; this data can be used subsequently for future promotion.
Once you are able to create a brand for your store, then making 100% profit from your business would not be a difficult task. However, you can still trade profitably despite the new Konga commission rate.
To your success!