Reading mode
Reveal
Next step
Show all steps
Replay animation
Thumbnails
Speaker notes
Presentation mode
Fullscreen
Print / PDF
PPTX export will be provided in a later version.
Cross-border cost, delivery and after-sales
A US$15 order, seven cost lines and almost no margin
Speaker notes Open with the seller's belief that a US$4.50 product sold at US$15 earns US$10.50. Ask where the money went.
Opening question
Hook 3 min
Price minus product cost equals profit?
Price US$15, goods US$4.50 Free shipping Marketing, commission, duty, returns What is left per order?
Learning objectives
O1–O4 2 min
By the end, you can...
Map seven cost items. Separate GMV, revenue and profit. Choose a fulfilment mode. Evaluate prevention versus remedy in after-sales.
Concept 1 · Advantages with costs
O1 4 min
Every advantage has a matching cost
1
Convenience
24/7 service needs staffing and systems.
2
Wider selection
Assortment needs inventory and curation.
3
Low startup cost
No rent, but traffic must be bought.
4
International reach
Reach needs logistics and compliance.
Speaker notes Remarketing is the fifth advantage in §1.6; it needs an ad budget, which appears in the ledger.
Concept 1 · Challenges
O1 4 min
Challenges are cost and risk items
Service
Limited service
No face-to-face help; support costs.
Touch
Cannot touch goods
Expectation gaps create returns.
Rules
Competition under rules
Compliance and price pressure.
Traffic
Rising ad cost
Figure 1-6 shows ad spend growth.
Speaker notes Ask which challenge can be reduced by better product information. The answer is "cannot touch goods".
Concept 1 · The ledger
O1 5 min
Where the US$15 goes (1/2)
? Which four lines take most of the US$15?Swipe horizontally to see the full figure
0 1 2 3 4 5 Goods 4.5 Marketing 2.8 First-leg 2.3 Last-mile 2
Takeaway Goods is 30% of the price. Marketing, first-leg and last-mile together are 7.1, about 1.6 times goods.
Simulated values for teaching; not a real cost structure.
Teaching simulation USD per order · Teaching simulation · Course simulation, not real cost data
Speaker notes Four largest items. Ask students to add marketing, first-leg and last-mile: 7.1, about 1.6 times goods.
Concept 1 · The ledger
O1 5 min
Where the US$15 goes (2/2)
? Where does each dollar of the US$15 go?Swipe horizontally to see the full figure
0 3 6 9 12 15 15 Price -4.5 Goods -2.8 Marketing -2.3 First-leg -2 Last-mile -1.7 Commission -0.9 Duties -0.8 After-sales 0 Left
Takeaway The seven lines consume the full US$15. The US$0.80 after-sales line is a provision, not profit.
Simulated; the zero residual is an assumption of this teaching example.
Teaching simulation USD per order · Teaching simulation · Course simulation, not real cost data
Speaker notes Remaining three items total 3.4, so the seven lines sum to 15.0. The 0.80 reserve is a provision, not profit.
Concept 1 · Pricing
O1 3 min
Free shipping is priced in
Logistics is US$4.30 of a US$15 order; the customer simply does not see a separate line.
Price from the full ledger. A goods-only price loses money on every order. State whether shipping is included.
Speaker notes Ask why sellers still advertise free shipping. The answer is conversion, not cost.
Concept 2 · Vocabulary
O2 4 min
Three numbers, three questions
Activity
GMV
All platform transactions, including cancellations.
Own sales
Revenue
The seller's recognised sales or platform fees.
What remains
Profit
Revenue minus all costs and provisions.
Speaker notes Ask: can GMV rise while a seller's profit falls? Yes, if competition raises ad costs.
Concept 2 · Scope
O2 3 min
Whose number is it?
Platform GMV All sellers on the platform Includes cancelled and returned orders Measures platform activity Seller revenue One seller's own sales Net of discounts and cancellations Basis for profit calculation
Speaker notes This is the most common reporting error in ecommerce. Ask students to label the next GMV headline they see.
Concept 3 · Fulfilment
O3 4 min
Three modes, three trade-offs
Test
Small parcel
Slow, cheap, low inventory risk.
Middle
Consolidated line
Pooled orders on fixed routes.
Speed
Warehouse / FBA
Fast, but stock and forecasting upfront.
Concept 3 · Warehouse
O3 4 min
A warehouse is not automatically cheaper
Parcel First-leg 2.30 + last-mile 2.00 No storage Slower delivery Warehouse First-leg plus storage 3.40 Last-mile 1.20 Faster, needs stock
Concept 3 · Break-even
O3 3 min
0.30 needs a 2% conversion lift
At a US$15 price, 2% of 15 is 0.30 - below that, the warehouse loses money before inventory risk.
State the assumption. Test conversion before committing stock. Inventory risk is additional.
Concept 4 · After-sales
O4 4 min
Why returns hurt more across borders
Cost
Reverse freight
Return shipping can exceed the original delivery.
Time
Weeks, not days
Cross-border return and inspection take weeks.
Trust
Disputes escalate
Unclear responsibility damages reviews.
Concept 4 · Prevention vs remedy
O4 4 min
Cheaper to prevent than to remedy
Prevent
Accurate listings
Size charts, real photos, honest timing.
Remedy
Local returns
Local collection points cut reverse freight.
Last resort
Refund-only
Cheap per case, but monitor abuse.
Speaker notes Ask which measure is prevention and which is remedy. Do not let students treat refund-only as prevention.
Case · Teaching case
O1–O4 6 min
The US$15 ledger
Case: the US$15 ledger (teaching case)
3,000 orders per month Return rate 4% at US$8 per return Dispute rate 1.5% at US$15 Reserve US$0.80 is inside the cost What is left?
Three scenarios, three answers
Base
About US$0.26 per order
After-sales 0.545 replaces the 0.80 reserve.
Marketing +1
About −US$0.74
A single cost change wipes out the margin.
Warehouse
Needs +2% conversion
Extra 0.30 must be earned back.
Common misconceptions
O1–O4 3 min
Four claims to retire
Profit = price minus product cost. Free shipping means no shipping cost. Platform GMV is the seller's revenue. An overseas warehouse is cheaper.
Speaker notes For each, point to the ledger line that refutes it.
Classroom activity
O1–O4 12 min
Break the ledger
4 min Write the seven items, total them, state assumptions. 3 min Compute actual after-sales and profit per order. 3 min Recompute with marketing at US$3.80. 2 min Find the warehouse break-even conversion lift.
Materials on this slide
Exercise: seven-line ledger
Five questions
Q1 largest cost · Q2 GMV/revenue/profit Q3 testing mode · Q4 returns Q5 free shipping
Speaker notes Q5 is the pricing application; if missed, revisit the free-shipping slide.
What you can now do
Build a seven-line ledger. Keep GMV, revenue and profit apart. Choose a fulfilment mode with numbers. Design prevention before remedy.
Sources and preparation
Textbook §1.6–1.7; §2.2.5; Figure 1-6. All ledger figures are a teaching simulation. Next: shopping contexts in China and students' home countries.
Speaker notes Remind students that no real seller's costs are disclosed here and that the figures are for structure only.
←
Slide 1 of 22
→
1
Cross-border cost, delivery and after-sales
2
Price minus product cost equals profit?
3
By the end, you can...
4
Every advantage has a matching cost
5
Challenges are cost and risk items
6
Where the US$15 goes (1/2)
7
Where the US$15 goes (2/2)
8
Free shipping is priced in
9
Three numbers, three questions
10
Whose number is it?
11
Three modes, three trade-offs
12
A warehouse is not automatically cheaper
13
0.30 needs a 2% conversion lift
14
Why returns hurt more across borders
15
Cheaper to prevent than to remedy
16
The US$15 ledger
17
Three scenarios, three answers
18
Four claims to retire
19
Break the ledger
20
Five questions
21
What you can now do
22
Sources and preparation
Lesson 08 · 50 min · 1 / 22
Cross-border cost, delivery and after-sales
A US$15 order, seven cost lines and almost no margin
Open with the seller's belief that a US$4.50 product sold at US$15 earns US$10.50. Ask where the money went.
Opening question · 2 / 22
Price minus product cost equals profit?
Price US$15, goods US$4.50 Free shipping Marketing, commission, duty, returns What is left per order? Take estimates on the board. Most will be far above the real simulated margin.
Learning objectives · 3 / 22
By the end, you can...
Map seven cost items. Separate GMV, revenue and profit. Choose a fulfilment mode. Evaluate prevention versus remedy in after-sales. O2 is tested by Q2; O3 by Q3 and the warehouse calculation; O4 by Q4–Q5.
Concept 1 · Advantages with costs · 4 / 22
Every advantage has a matching cost
Remarketing is the fifth advantage in §1.6; it needs an ad budget, which appears in the ledger.
Concept 1 · Challenges · 5 / 22
Challenges are cost and risk items
Ask which challenge can be reduced by better product information. The answer is "cannot touch goods".
Concept 1 · The ledger · 6 / 22
Where the US$15 goes (1/2)
? Which four lines take most of the US$15?Swipe horizontally to see the full figure
0 1 2 3 4 5 Goods 4.5 Marketing 2.8 First-leg 2.3 Last-mile 2
Takeaway Goods is 30% of the price. Marketing, first-leg and last-mile together are 7.1, about 1.6 times goods.
Simulated values for teaching; not a real cost structure.
Teaching simulation USD per order · Teaching simulation · Course simulation, not real cost data Four largest items. Ask students to add marketing, first-leg and last-mile: 7.1, about 1.6 times goods.
Concept 1 · The ledger · 7 / 22
Where the US$15 goes (2/2)
? Where does each dollar of the US$15 go?Swipe horizontally to see the full figure
0 3 6 9 12 15 15 Price -4.5 Goods -2.8 Marketing -2.3 First-leg -2 Last-mile -1.7 Commission -0.9 Duties -0.8 After-sales 0 Left
Takeaway The seven lines consume the full US$15. The US$0.80 after-sales line is a provision, not profit.
Simulated; the zero residual is an assumption of this teaching example.
Teaching simulation USD per order · Teaching simulation · Course simulation, not real cost data Remaining three items total 3.4, so the seven lines sum to 15.0. The 0.80 reserve is a provision, not profit.
Concept 1 · Pricing · 8 / 22
Free shipping is priced in
Price from the full ledger. A goods-only price loses money on every order. State whether shipping is included. Ask why sellers still advertise free shipping. The answer is conversion, not cost.
Concept 2 · Vocabulary · 9 / 22
Three numbers, three questions
Ask: can GMV rise while a seller's profit falls? Yes, if competition raises ad costs.
Concept 2 · Scope · 10 / 22
Whose number is it?
Platform GMV All sellers on the platform Includes cancelled and returned orders Measures platform activity Seller revenue One seller's own sales Net of discounts and cancellations Basis for profit calculation This is the most common reporting error in ecommerce. Ask students to label the next GMV headline they see.
Concept 3 · Fulfilment · 11 / 22
Three modes, three trade-offs
Ask which mode suits a new colour with unknown demand. Small parcel.
Concept 3 · Warehouse · 12 / 22
A warehouse is not automatically cheaper
Parcel First-leg 2.30 + last-mile 2.00 No storage Slower delivery Warehouse First-leg plus storage 3.40 Last-mile 1.20 Faster, needs stock Total 4.30 versus 4.60. Ask what must improve to justify the extra 0.30.
Concept 3 · Break-even · 13 / 22
0.30 needs a 2% conversion lift
State the assumption. Test conversion before committing stock. Inventory risk is additional. This is the arithmetic the activity asks for. Make students say 0.30/15 = 2%.
Concept 4 · After-sales · 14 / 22
Why returns hurt more across borders
Ask why a seller may prefer refund-only to a return. The return costs more than the item.
Concept 4 · Prevention vs remedy · 15 / 22
Cheaper to prevent than to remedy
Ask which measure is prevention and which is remedy. Do not let students treat refund-only as prevention.
Case · Teaching case · 16 / 22
The US$15 ledger
3,000 orders per month Return rate 4% at US$8 per return Dispute rate 1.5% at US$15 Reserve US$0.80 is inside the cost What is left? Case is fictional. Warn students not to subtract the reserve twice.
Case analysis · 17 / 22
Three scenarios, three answers
Ask which scenario is most realistic for a new seller. Usually marketing increase.
Common misconceptions · 18 / 22
Four claims to retire
Profit = price minus product cost. Free shipping means no shipping cost. Platform GMV is the seller's revenue. An overseas warehouse is cheaper. For each, point to the ledger line that refutes it.
Classroom activity · 19 / 22
Break the ledger
Check for double-counting the reserve. The break-even is 2%.
Self-check · 20 / 22
Five questions
Q1 largest cost · Q2 GMV/revenue/profit Q3 testing mode · Q4 returns Q5 free shipping Q5 is the pricing application; if missed, revisit the free-shipping slide.
Summary · 21 / 22
What you can now do
Build a seven-line ledger. Keep GMV, revenue and profit apart. Choose a fulfilment mode with numbers. Design prevention before remedy. Return to the opening estimate and compare it with the calculated margin.
Sources & next · 22 / 22
Sources and preparation
Textbook §1.6–1.7; §2.2.5; Figure 1-6. All ledger figures are a teaching simulation. Next: shopping contexts in China and students' home countries. Remind students that no real seller's costs are disclosed here and that the figures are for structure only.