The Average Price of 'Electronic Music, Dj & Karaoke' is Changing
The E-commerce marketplace is dynamic, as can be seen in the 'Electronic Music, DJ & Karaoke' category, where the 'Average Price' has just changed by 54.7%.
Production Lead: Eric Jackson
Editor:
Sam Bernards
Published July, 2022
Where has the Average Price moved to?
Price is one of the most critical components of a consumer's decision to purchase within the E-commerce channel. The recent change from $90.18 to $139.50, a change of 54.7%, is a flag that the category is moving towards higher, more mature and customer-supported price points.
Why are so few price points driving so much volume?
Sales within the 'Electronic Music, DJ & Karaoke' category have converged into a clusters around key price points. They are:
- $0.00 to $96.60 (68.3% of sales)
- $96.60 to $193.20 (19.2%)
- $193.20 to $289.80 (6.8%)
for a total of 94.2% of best selling product sales within the last 30 days. Category competitors which do not have products in these ranges are being penalized by the amazon algorithms.
What is the performance of the top performing products?
This Leaderboard shows the top performing products within the category during the last 30 days. Typically these 10 products earn significantly more revenue than the other products within the category. The strategy to over-spend on advertising and marketing until one's product achieves a rank within the Leaderboard frequently has a benefit other than a magnitude increase in revenue, which is that organic ranking becomes more likely the closer a product gets to the #1 position in the Leaderboard--at which point paid advertising can become unnecessary. The longer a product can stay at the top of this Leaderboard, the more momentum it achieves.
Revenue share of the top-performing products
Why are prices expanding?
Because lower price point products frequently struggle to yield sufficient contribution to drive profitable growth for brands, categories with price points beyond certain levels can be attractive. One of the categories that has crossed the $100/item price point threshold is 'Electronic Music, DJ & Karaoke', in which the best selling products have an average price of $139.50. Thirty-day revenue within the top ten products ranges from $165,519 to $943,444. In order to break into the top ten products and experience the exponentially higher revenue this affords, products will need to maintain an average rating of 4.4 and earn at least 124 reviews. In order to ensure a level of margin that is at least average, brands should aim at a maximum fully-landed COGS of $34.88
To conclude, a price shift is an opportunity for the astute brand which has a responsive supply chain and a rapid product launch process. This is a call to action to review one's product portfolio for coverage of the top high-volume price points, the clustering of sales volume around these few high-volume price points is an accelerant for brands with products in those ranges, and an inhibitor for those brands which do not yet cover these critical price points, the recent performance of ASIN #B01N6ZJH96 ('OneOdio Wired Over Ear Headphones Studio...' by OneOdio) shows that it is the new benchmark., the relatively high average price point of the 'Electronic Music, DJ & Karaoke' category can be attractive for brands which can manufacturer and ship products at that price point and still maintain contribution margin.