Chapter - 5100

Hannah took advantage of this and unexpectedly lowered the return rate to less than 5%! This was recognized by the brands. Although Hannah's number of fans was not as high as those of top streamers, her fan conversion rate was high and the order transaction rate was also high, which resulted in brands increasing her commission ratio.

Live streaming has become a profitable business. For example, the five towels that Hannah sold yesterday, the production cost in the southern factory is about 15 dollars. Due to the huge order volume, the cost of logistics is about two or three dollars and the cost of storage and packaging is added up, the total cost is only twenty dollars, but the live broadcast sold five items for ninety-nine dollars and the gross profit rate is extremely high. However, brands also have their own weaknesses. What they are most afraid of is the high return rate. In order to protect the interests of consumers, the platform gives consumers the right to return the product within seven days without any reason.

Each time a product is shipped out, the expenses for labor and transportation amount to 5 dollars. However, if the customer returns the product, the revenue from the sale is reduced to only one cent. This results in a net loss of 5 dollars. Additionally, returned products often have their packaging damaged, requiring additional effort and cost to repackage the item for resale. When the return rate is high, even if the gross profit margin is initially high, the actual profit margin for the brand is not significant.

However, in Hannah's case, the return rate is significantly lower. Even when she sells low-quality items like leaking garbage bags, few customers choose to return them. Hannah understands that if she were to sell expensive skincare products with a higher commission, a customer's dissatisfaction with the product would result in a higher rate of returns.

Therefore, she has established a rule for herself: the maximum unit price per customer for live broadcast sales must not exceed 99 dollars. By keeping the prices low, she minimizes the likelihood of returns. She recognizes that consumers have a limit on the amount they are willing to spend for any given product.

She sells items such as bags of garbage for 19.9 dollars, disposable shower caps made of plastic wraps for 29 dollars, and five towels for 99 dollars. Even though the quality of these items may not be great, they are still useful to her customers and unlikely to be returned.

Even though the garbage bags may not be of high quality, they can still be used for decoration. Similarly, the plastic wraps may not be perfect for keeping food fresh, but they can still serve a purpose of covering leftovers. The towels may not be suitable for washing the face, but they can still be used as rags.

Since the prices of these items are relatively low, customers often view their purchase as a way to show their support for the live broadcaster.

Additionally, due to the relatively low value of these items, the effort and cost associated with returning them is often deemed not worth it. The process of submitting a return request, scheduling a pickup, repackaging the item and paying for shipping can be seen as more trouble than the item is worth.

Furthermore, the cost of shipping returned items can also be a deterrent for customers. The cost of shipping through a major shipping company may only be a few dollars, while individual express delivery can be much more expensive, at least 10 dollars. Given this, customers may find it more cost-effective to keep the item rather than go through the hassle and expense of returning it.

Hannah's low return rate is also an advantage for her when negotiating with brands. She is able to use her low return rate as leverage to negotiate a higher commission for each sale. For example, if a brand offers a 20 dollars commission for each sale through another live streamer, Hannah may be able to negotiate a commission of 30 dollars per sale because of her lower return rate.

Because of this, brands are also willing to give Hannah a higher commission. The profit margins generated by Hannah's sales are higher than the average streamer, and she sold 1.1 million dollars in goods yesterday.

According to a return rate of 5%, Hannah's commission before taxes would have been as high as 310,000 dollars. However, the excerpt mentions that this was not a peak performance for Hannah.

It is mentioned that the best time for her live stream is on Friday and Saturday evening, and all day on Sunday, when the American viewers are awake, and the Chinese viewers are back from work or school. On Sunday evening the traffic drops significantly.

On Friday night, Hannah sold products worth over 2 million dollars. On Saturday, she broadcast two shows and sold a total of 3 million dollars. On Sunday evening, she sold 1.1 million dollars.

In total, Hannah sold 8 million dollars in products over the course of one weekend. With a commission rate of 30%, her pre-tax commission would have been 2.4 million dollars. This is a very high income in a short period of time and would easily allow her to afford luxury items like a Mercedes-Benz Big G or a Rolls-Royce Cullinan.

After all, she only needs to pay the down payment on the vehicle. She will be able to earn the full cost of the vehicle after a month.