This year, many cross-border sellers have seen both sales and profits decline, especially those affected by account suspensions, where sales have even plummeted80% of cross-border people are no longer able to bear any risks, and they are starting to bind with factories and embark on the path of self rescue behind closed doors.
Seeing the difficult situation of sellers around them, many peers directly call out to lie flat, but cross-border people can never lie flat! In the new situation where there were former big sellers trying to save themselves behind closed doors, and later factories trying to intervene in the industry, lying flat may have been equated with being eliminated. Where is the survival space for future cross-border sellers?
Top selling sales decrease80%,Losing money has become the norm for cross-border people
2021 is coming to an end, and this year may be the most challenging year for cross-border e-commerce sellers. Since Amazon was banned at the end of April, cross-border sellers in the industry have been howling. Currently, this action on the platform is still ongoing, and almost everyone dares not easily touch the red line of violations.
Under the influence of the lockdown wave, some Amazon sellers suffered heavy losses. According to the introduction of a billion dollar selling soldier in Shenzhen, at the beginning of the year, everyone predicted that the ban would beThe deadline is September 30th, but it is still ongoing in October. It was later predicted that it will end in Q4, but it is currently continuing, so Amazon's consolidation is likely to continue.
The logic behind the ban not only violates the rules of the Amazon platform, but also breaks the values of Americans. Originally, they believed in something unconditionally, but when a large amount of evidence was presented, they had to believe that there was moisture in it.
When Amazon sellers use small cards to break through American perception, it is a harm to the platform. They need to use certain means to maintain loyal users. If customers lose, it may shake Amazon's traffic foundation, which may be the reason why Amazon is vigorously rectifying and blocking seller accounts. And over time, Amazon discovered that after blocking some sellers, the overall impact on the platformGMV does not have a significant impact, as the seller provides standard products, and if a product falls down, substitutes will soon appear.
Amazon can sit firmly on the fishing platform, but domestic sellers are clearly no longer able to afford it. According to the soldier's introduction,Some severely affected top sellers may have lost approximately80% of sales.One person enters the industryThe seller of 5 years said that this year was the worst, with many peers, including themselves, having no orders and sales falling to freezing point. Some sellers have to undergo internal rectification, company transformation, layoffs, and other operations to ensure survival are common.
Chen Xianting, Vice President of Yichang Technology, believes that many Amazon sellers have had a difficult year. But this point also needs to be layered: first of allIt must be difficult for a retail seller,EspeciallyDistributors without core competencies;Secondly, there are small sellers, especially those who have recently entered the market this year, and currently there are no more on the platformThat big dividend to feed them.However, some sellers who had been deeply involved in high-quality products two or three years ago were not affected, and some even lived a more fulfilling life.
However, for sellers, the deadliest point is not sales revenue, but profit. The hottest words in the industry this year are price wars and internal competition. With the combination of various factors such as rising shipping costs, rising advertising costs, and falling exchange rates, losing money has become the norm for a large number of sellers.
The number of gatherings has sharply decreased90%, Amazon sellers save themselves behind closed doors
Billion dollar sales experts say that many people doing cross-border business this year are losing money, which has become the norm. I often make a joke: last year, our industry's seller friends often had private gatherings, but this year this kind of activity has decreased significantly, only about one tenth of the volume last year. From this surface phenomenon, we can infer that every company in the entire industry is closing their doors to save themselves, and everyone is trying to find ways to move forward.
An industry insider has calculated an account, Amazon commission+The delivery fee is about 35% -40%, deducting 20% of the European VAT fee, 17% -20% of the initial shipping cost, 15% -20% of the procurement cost, 5% of the operating cost, 5% of the advertising cost, and at least 130% of the product profit margin, otherwise there is no possibility of profit.
When costs rise, many peers do not increase prices and instead engage in price wars. Especially for this year's members, Amazon sellers have been clearing their inventory at cabbage prices, and their identity has transformed into a cross-border philanthropist. As time goes by, there are still many sellers clearing at low prices, and the price war is still ongoing. A seller mocks himself: 'If you sell more, you will lose more. If you sell less, you will lose more!'!
Can profits be damaged and prices not increase? Such soul torture often makes cross-border people speechless and choking.The entire category is in a price war, and you can see unexpected bottom prices every day. Some of the top 1 categories can be purchased for 0 yuan directly, and you can only stack the goods in the warehouse without reducing the price. The backlog of goods also has to pay high storage fees, there is no way! "Exclaimed a Shenzhen seller.
Both sellers in Shenzhen are mainly engaged in wooden products3C category, affected by the overall environment, this year's sales are only two-thirds of last year's, with profits directly halved. In the originally hopeful peak season, sales were almost the same as usual. Japanese station sellers are following the trend in selling hot clothes, but due to high product value and high competition, they have accumulated a lot of inventory, with a value of up to 4 million yuan. There was an issue with the account, with 4 million yuan of inventory piled up in Amazon warehouses.
Not only small and medium-sized sellers, but also big sellers lose even more money. this yearFrom January to June, the revenue of One Tree was 1.092 billion yuan, a year-on-year decrease of 51.12%, and a net profit loss of 742 million yuan.
In addition to force majeure such as shipping costs and exchange rates, the impact of account suspension on profits is manifested as a surge in advertising costs. Compared to before the ban, the seller's true feedback is that advertising fees have become more expensive.
As an Amazon seller, if you want to obtain more orders, it is directly linked to the conversion of traffic programs. Traffic is divided into active traffic and passive traffic. Passive traffic comes from the allocation of the platform; active traffic requires the seller to take the initiative to buy. Active traffic is related to images, QA, descriptive comments, and so on, among which the most difficult to control is feedback. Previously, sellers used to use feedback to increase conversion and weight, bringing in passive traffic. Now The path of brushing orders is blocked, and in order to obtain more orders, it is certain to do more on site advertising to a certain extent The soldier said.
In the current situation of continuous decline in profits, many Amazon sellers have mentioned a term calledLie flat.
Cross border sellers can never lie flat
Lying flat to a certain extent depends on the situation and can be basically divided into two categories:1. Sellers who stock up too much and clear inventory; 2. Sellers who are under inventory pressure after their account is closed and do not consider the cost of clearing at ultra-low prices. This year, these two types of sellers have accounted for a large portion.
Sellers outside of the two categories may not exist to lie flat. Cross border people often describe their categories in two broad directions, namely the Red Sea category and the Blue Sea category.
Red Sea order, with hotFor example, the 3C category. 3CProducts are easy to aggregate because their ability to aggregate leads to some big hits,perhapsA product can top the profits of a listed company, which often occurs in Shenzhen.do3C class soldiers have a deep understanding of this.
however3C products are highly competitive because online displays are transparent, and competitors can conduct thorough and long-term tracking and analysis of your products, making it easy to grasp your changes. After mastering the information of competitors, the competition between sellers has always existed. Sellers who want to reap the dividends of popular products need to constantly follow up on various feedback, and even sacrifice prices to maintain their rankings, which is impossible to lie flat.
And sellers who have been searching for blue ocean products may just want to find a state of lying flat. Soldier bluntly stated that blue ocean sellers want to spread information and hide in corners that others cannot see. With the intensification of market competition, red ocean sellers will inevitably sink to the next level of market. When the red ocean team sinks into the blue ocean field, sellers who live in a flat state have no ability to fight back.
So blue ocean sellers cannot lie flat either. Since they have found a suitable category, they must accumulate advantages when there is an information gap. Only by accumulating advantages and reaching the top can they maintain their position. By the time other red ocean category sellers enter the market, these advantages have already established themselves and others cannot shake them. Eating the dividends of blue ocean categories in a flat posture is very dangerous for a team, and with the development of cross-border e-commerce to this day, the time for information gap has become shorter and the time left for sellers is also constantly shrinking.
Another factor that cross-border sellers cannot lie flat is that they come from factories. Previously, factories that entered cross-border e-commerce generally did not have operational advantages, and there were cases where factories transformed into Amazon losing millions. However, this year, the identity of factories seems to have changed, easily becoming participants in cross-border e-commerce.
The stocking season has arrived, and sellers are bound to the factory to avoid risks
The peak season has not yet ended, and it is time to stock up again. A seller reminds us that we need to start stocking up for the Chinese New Year this month, and many factories will be on vacation at the end of the year. Even if we resume work in the first month after the new year, the production capacity will not be too high.
In the past week or two, most sellers have been tirelessly preparing for the Spring Festival and next year's sales. In the seller's words, the money returned has not yet covered the heat and needs to be stocked up, and the profits earned during the peak season have returned to the value of the goods.
This year, many sellers have fallen into a passive position due to improper stocking. Soldier analysis shows that the market has not grown, and everyone has so much stock. Last year's stock has not been sold out this year, and Amazon sellers are facing dual inventory pressure due to the release of banned inventory. Once the inventory starts, the seller will disregard the cost and even believe that the money they can get back is earned, ultimately clearing the inventory at the floor price.
Before stocking, sellers need to consider three questions: when will they stock up? How much stock do you have? How to stock up?
At the end of November, a seller stated that taking the product procurement plan for March next year as an example, the current is a good time to purchase products. The reason is that the factory's shipment was slow in January, so placing an order in advance is convenient for arranging production, and it can also estimate product sales and quality. We usually stock up at least 3 months in advance, and for some products, we also need to arrange procurement half a year in advance because the production time for the products is too long. In order to prevent midway stock outs, the factory sits on the ground and increases prices. Due to special logistics and factory reasons, we are not allowed to ship, so we have to start stocking up now
Currently, some sellers have started stocking up for the Spring Festival, with a stocking volume of approximatelyFrom one month to one and a half months, most people will ship the goods before the logistics stop before the new year.
In terms of stocking volume, some sellers have stated that it is currently a time to test their stocking courage and make a foolish bet on stocking up to see if they can take the opportunity to overtake on a curve; Some sellers are forced to double or even increase their logistics time due to logistics delaysTriple stocking. The previous 20 day sea freight cycle only required a 2-month lead time, but now the 2-month sea freight cycle requires a 6-month lead time at the end of the year, "said a seller. Another high value product seller stated that their US market has already stocked up until September next year, making direct calling too difficult.
A few sellers have no time to stock up, and they are still trying to digest the goods that were previously overstocked.
No matter how big the seller is, there are times when they can't estimate their inventory for the Christmas season. Our category's big brother estimates that they have too much inventory this year and are still providing benefits to Americans! The peak season is coming to an end soon, and it's estimated that the remaining inventory can be sold for another year next year, but I don't know if the storage fee of several hundred thousand is enough. "The seller sighed.
After suffering from excessive stocking this year, combined with the current sales environment, most sellers will do their best to stock up.
Chen Xianting believes that sellers' stocking is not an end in itself but a means, but rather an adjustable means. Given the situation this year, sellers will be more rational and will not blindly stock up like last year.I think the situation next year will be better than this year because the seller has gone through many problems this year, their ability is stronger, and the environment next year is also more determined
In the middle of the year, a group of big sellers suffered from the trend of being banned, affecting various aspects of the industry, and new forms of stocking also emerged.
Soldiers believe that this year's situation will trigger deep industry thinking: will sellers continue to follow the previous (operational) model? That's not feasible. Relying on simple and violent means to climb up can have serious consequences. If you die once, you can get up, but if you die again, you can hardly get up.
Logistics is an important influencing factor in the stocking process.This year, in terms of transportation, we unanimously believe that as long as civil aviation is not open, all logistics costs cannot be reduced. Because in terms of air transportation, the civil aviation channel accounts for a large amount of goods, and if civil aviation is not open, the air transportation relies on special planes for very little transportation volume. Therefore, goods will inevitably be squeezed into the sea transportation channel, and once you have no choice for sea transportation, the price will increase
Currently, some air freight prices have exceeded100 yuan/kg, and the overall efficiency of the shipping channel has been up to 3 months, posing challenges to both the seller's capital and supply chains. But for many people, this is actually an opportunity.
A lot of market space has been vacated, and at this time, many sellers will work back to back with suppliers. Previously, the seller's procurement factory was responsible for production, but now the two have started to cooperate deeply back to back. Specifically, the factory used to either stock up or invest, but now the seller says' let's do this product line together 'and follows a profit sharing model, "said the soldier.
This is a new phenomenon that we have seen. This change is not just being talked about, but rather a deep cooperation between the two sides that is happening. "Sellers cannot bear too much pressure and would rather make less money and share risks with suppliers, and the supply chain in the industry can quickly participate in the sales end through this.
Da Bing stated that from a business perspective, the cross-border e-commerce industry is returning to the essence of transactions——The product, who ultimately holds the product, holds the essence of the transaction; If a product is attached with a certain brand, then whoever owns the brand has the initiative.In this new cooperation model between sellers and factories, as experience continues to be gained, the role of the factory may change and become more dominant.
From business strategy to channel layout, many sellers have spent their time exploring2021. What is the focus of sellers in making a living on Amazon in the future? How do sellers determine if it is appropriate to lay out more channels?
Is branding through third-party platforms a false proposition?
Da Bing believes that there are several trends in the future cross-border e-commerce industry:
Firstly, adopt a refined business model.Just like running a grocery store or selling goods, it requires careful management, cleaning up the store, selecting products, and handling some details of the products as a business; Most sellers should choose refined operations and treat it as a business to cultivate and earn money.
Secondly, sink into a specific sub category to create a brand.In this case, Amazon may only be a seller's choice, and sellers can also have multiple other options, such as operating on multiple platforms and channels.
At this point, he revealed that most sellers currently do not believe in branding through platforms such as Amazon, believing that this is a false proposition.
Because you really want to stand out and build a unique system, and the few elements of doing business are yours, such as sales networks, but through all third-party platforms such as Amazon, only the products belong to you, and the channels and other things belong to others. Do you think you are building a brand?
Previously, everyone had been talking about branding through Amazon, which may sound like a touching story, but this year the story came to an end, with the fundamental reason being the issue of initiative. Third party platforms do not want you to rely on their power to grow too much, which is not beneficial to them. This is the essence of returning to business.”
As for brand building, soldiers believe that the time has not come.How easy is it to become a brand? Some products only improve the quality and cost-effectiveness of existing products, but there have been no revolutionary breakthroughs, such as charging products that can achieve contactless charging or a one-year battery life at a time, in order to have sufficient brand depth. When China's GDP reaches the world's first and there is cultural output, it is a good time to become a brand. Many people do not even have a passport, so they want to do products from which country Card, the result will definitely be very hurt
How do sellers choose platforms in terms of multi-channel layout?
Chen Xianting stated that,In terms of making high-quality products, it remains optimistic about Amazon in the long run; In addition, sellers also need to pay attention to new platforms as they represent new market opportunities.
In emerging markets, Shopee, Mercado, Coupang from South Korea, and Real.de from Germany are all quite good platforms
Compared to the new platform, Amazon has too many first mover advantages, but sellers cannot completely judge the size of a platform, and should also consider the relative competition situation and platform player level. Amazon has a large plate, but players are also very professional; The new platform plate may not look big, but its players are relatively weak, which is a platform bonus and may mean more opportunities for sellers.
The situation of cross-border shipping is constantly changing, and hundreds of thousands of sellers are standing at the bow of the ship, feeling the ups and downs of market changes. They hope to keep up with market trends and gain a share.