From Taobao intern to the father of Pinduoduo

Chapter 51 Overselling Crisis

Inside Chengyi E-commerce Company.

The operations staff looked at the latest sales figures of the Three Little Bees store with surprise.

It has already broken into the top ten in the sales rankings; and in the overall rankings, it has even broken into the top five.

He was completely baffled: No, just how much inventory does this shop have that it's willing to squander like this?

Because the three little bees made such a commotion, the boss already knew about it, and they even bought a box of bread to study it.

It's almost certain that this store loses money on every single sale.

Once their inventory is sold out, they'll stop.

However, the boss had a different opinion. He issued an order: we can't be so passive; we must proactively hand over the battlefield to others.

He instructed the operations team to prepare for a super discount event tonight, coinciding with the launch of Three Little Bees, featuring a brand new item at 50% off. The goal was to boost sales of this item, widen the gap, and further expand the sales advantage.

So after communicating with Taobao staff, the operations team immediately started working on the store's star product, a breakfast bread.

This new product can be combined with a super discount event, and we can also test the market's reaction to this creamy breakfast bread.

At 8 p.m. that evening, the new product was launched on time, and the operations team prepared 200 units of stock.

The reason they don't stock too much butter bread is that, like the Three Little Bees shop, they lose money on every order they sell under the 50% discount, and are purely trying to increase sales volume at a loss.

From the moment the promotion was launched, orders in the Taobao merchant backend kept refreshing, with a transaction occurring almost every minute.

Drop drop drop drop.

The notification sounds from Wangwang kept coming in, and the customer service staff were busy responding to inquiries.

The operation is going smoothly for a while. Judging from the current situation, all 200 packs of bread can be sold out today, which will also bring an increase of 200 orders.

Moreover, as he pondered, the operations manager was closely observing the operational activities of the Three Little Bees store.

He discovered that recently, many people on food forums have been showing off Three Little Bees' popular items, which has even created a small trend.

The reason for this may be that the popular item carries many people's childhood memories, triggering a wave of nostalgia.

This experience inspired the operations team: if Three Little Bees could operate on a food forum, why not try their hand at e-commerce as well?

You play the childhood nostalgia card, I'll play the urban white-collar lifestyle card.

However, the operators have to admit that the person behind this store is really amazing.

He used a specialized web crawler to check and found that this store had suddenly risen to prominence about two weeks ago. Previously, it could only sell a dozen or so orders a day, with monthly sales of just over 300 orders. Since it suddenly launched a super discount event two weeks ago, its sales have skyrocketed.

Furthermore, it happened to be in the beta testing phase of a new feature on Taobao, which significantly boosted its sales. Combined with recent sharing posts on food forums, the store's daily sales have reached 150 orders.

Judging from the timeline, the new trader must have taken over about two weeks ago. If possible, the operations team would really like to get to know this behind-the-scenes trader and learn from their experience.

Suddenly, someone shouted, "Brother Wang, something bad has happened! That super discount event has a bug!"

"What the heck?" The operations manager jumped up from his chair and rushed to the person's computer.

The person who had just spoken was demonstrating to the operations team, saying, "Brother Wang, look, we only listed 200 units of the new product, right? This new product has already sold a total of 240 units!"

The operations manager frowned: "240 orders? The goods are sold out. Shouldn't the system show insufficient inventory? Why are buyers still placing orders?"

The man scratched his head: "I'm not a Taobao programmer, how would I know? Buyers have already complained; they placed orders but the system shows the item is out of stock, even though they've already paid. Brother Wang, what do you think? Should we process refunds for the customers, or go to the warehouse and get more stock to replace the orders?"

The operations manager said, "Wait a minute, I'll go ask the boss."

After some discussion, the operations team finally finalized the plan with the boss. The boss thought about it; although selling at a 50% discount would result in a loss of 5 yuan per order, times had changed. Chengyi E-commerce was now a large and established company, and they weren't short of a small amount of money. They would consider it a loss to maintain their ranking advantage. So he made the decision: Make up the difference! Make up for any over-sold orders.

A week later, the boss came to the company to review and summarize the sales data for the week.

His face was as black as the bottom of a pot; he was extremely dissatisfied with the week's results.

First, there was the super discount event. Driven by the discounts, a total of 1000 new products were sold in 7 days, resulting in a loss of 5000 yuan.

The loss of 5000 yuan is not a big deal. The key issue is that this super discount event misled existing customers who added the product to their shopping carts, making them think that other items in this category would also be on super discount in the future.

This has led to the following phenomenon: marketing costs have increased, but user repurchase rates have decreased.

To clarify, when listing products on Taobao, a single link doesn't limit you to selling only one item.

For example, when listing a breakfast bread, you can set three flavors and sizes in the product link for customers to choose from. The approach taken by Chengyi Store is to add a new flavor to the product link and offer a huge discount on this new item.

However, this discount led long-time customers to mistakenly believe that other older items would also be discounted in the future, so they decided to wait for the discounts before buying.

The boss rubbed his temples. This was truly a case of losing more than he gained. It was all those damned little bees' fault for throwing him off balance.

He glanced at the marketing plan for the month, which involved launching an event on a food forum to encourage users who bought the cream-flavored breakfast bread to share it, with a chance to win a free order.

The marketing plan did not go smoothly, and the traffic it attracted from the food forum was minimal.

The boss analyzed that this was because those who shared the posts on the forum were all users who placed orders during the super discount event.

The posts that food lovers saw on the forum all emphasized the low price of this bread, which led to a common perception: people would not buy bread unless it was discounted; they would only buy it when it was discounted, and the discount had to be significant.

The boss was in a terrible predicament: a huge blunder!

……

Inside a private room at the Shangri-La Hotel.

Lin Mu and several old friends clinked glasses, and he said, "I'll be transferring to the Taobao Mall department soon, and my colleagues will be taking over your shops. But don't worry, if anything goes wrong, I'll help you resolve it. Besides, your shops are already on track, so whether I'm there to support you or not makes little difference."

He then changed the subject: "As for Taobao Mall, I suggest you all open a flagship store here."

Li Zhi downed a glass of baijiu and said, "I trust Brother Lin. Since Brother Lin is willing to gamble his future, then I'll follow Brother Lin."

Factory Director Mao also said, "President Lin, my revenue this year will definitely exceed 1000 million. My peak revenue wasn't even that high. I trust your judgment, and like Brother Li, I'll work for you. If you want me to open a flagship store on Taobao Mall, I definitely will.

She paused, then asked, "But can I ask you something? What's the difference between Taobao Mall and Taobao Marketplace? Isn't this just a way for Taobao to rip off merchants? You don't have to pay a single cent deposit to open a shop on Taobao Marketplace, but you have to pay a 2 yuan deposit to open a shop on Taobao Mall."

Lin Mu thought to himself, "It's not just this."

In later generations, Taobao Mall was renamed Tmall. After Tmall became a huge success, the deposit for Tmall even increased to 10 yuan.

During this period, an interesting little business happened: an old Tmall store that had paid a deposit of 2 yuan in advance saw a price difference, so someone directly sold the Tmall store and made money.

Some people even hoarded dozens of Tmall stores and made millions of yuan by reselling them.

Closer to home.

Lin Mu explained to the two of them in detail: "What will Taobao Mall look like in the future? With the country's 4 trillion yuan economic stimulus, people's living standards will rise accordingly. They will shift from 'having enough to eat and wear' to 'eating well and dressing well.' People's requirements for life will change from 'just being able to survive' to 'living well.'"

"And your shops just happen to meet this need: Li Zhi, your shop takes the route of storytelling, and Director Mao, your 'Spring Diary' is positioned as high-end and has been featured in the news and special reports. It would be especially suitable for you to open a shop on Taobao Mall."