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Joom.com - very low margins (5)

07-04-2018 03:43 PM #1 zyggmunt (Member)
Joom.com - very low margins

I wonder about drop-shipping store called joom.com.

I’m just looking on their margins and it looks they often have lower prices than on AliExpress.

E.g. something costs $2.5 on aliexpress but on joom only $2.1. I know they can have better deals however even if they buy this product from a producer for $1, they need to pay it on fb ads. Do you think they are able to sell the product with conversion cost lower than $1?

It’s really interesting to me how they earn money.

Generally I heard that it’s good to buy product for $2 and sell for $20 - with much higher margin.


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07-04-2018 09:11 PM #2 matuloo (Legendary Moderator)

Quote Originally Posted by zyggmunt View Post
I wonder about drop-shipping store called joom.com.

I’m just looking on their margins and it looks they often have lower prices than on AliExpress.

E.g. something costs $2.5 on aliexpress but on joom only $2.1. I know they can have better deals however even if they buy this product from a producer for $1, they need to pay it on fb ads. Do you think they are able to sell the product with conversion cost lower than $1?

It’s really interesting to me how they earn money.

Generally I heard that it’s good to buy product for $2 and sell for $20 - with much higher margin.


Sent from my iPhone using STM Forums mobile app
Their strategy might be based on repeat purchases ... so they lure people in with low prices and hope for them to return. If enough people return, they can lose on the initial AD based purchase.

07-06-2018 09:57 AM #3 pekadis (Moderator)

What Matuloo said and..

They might be burning (not earning) money.

It's really hard to fugure out sometimes when you don't know the strategy.

These things might go well for a while and then just crash.

In general, I am not a fan of copying this approach.
Aliexpress for example is looking for a big distribution center location (might be in Belgium) to deliver within 24 hours in this region. And with them being one of the most popular sites anyway, I don't see a big future for arbritrage when you are this late in the game.



Or it might be a sophisticated operation.

07-07-2018 05:49 AM #4 cawovt ()

They are playing a different game. Major metrics for that games are - user growth, repeat purchase, and customer LTV. Cost of Customer Acquisition is weighted against all above metrics

08-13-2018 02:37 PM #5 gzoomie (Member)

Or maybe they scamming a bit https://www.trustpilot.com/review/joom.com

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