Orders plummeted! More than 80% of sellers failed to achieve their first half targets

This week, the continuous decline in orders has made the sellers very depressed. Affected by the US Independence Day holiday and the "pre-sale syndrome", many sellers have hit a new low in sales. Some people bluntly said that they have encountered the worst sales day this year. "My order volume has dropped, but my ranking has risen. It seems that everyone is falling." said a seller.

There are still three days until Prime Day, and the order volume in the next few days may still be not optimistic. First, it coincides with the weekend, second, PD Member Day is approaching, and buyers are more reluctant to buy; third, Walmart and Target's promotion days will start two days earlier than the PD promotion, which will snatch some orders.

In the first half of this year, sellers frequently mentioned the problem of "poor orders". A survey conducted by an industry seller showed that less than 20% of the sellers interviewed achieved their first-half performance targets, and more than 80% of the sellers failed to achieve their targets.

But the second half of the year will be an opportunity. According to forecasts from research institutions, sales in the US and Asia will grow by nearly 10% to $8.03 billion during Prime Day, and online spending in the UK and Australia will also set records. Some cross-border companies have adjusted their working hours during the promotion period, such as working from 2:30 p.m. to 6-8 a.m. the next day, hoping to get the first shot in the second half of the year.

Sellers' orders plummeted, encountering "the worst sales day of the year"

Amazon Prime Day is only a few days away. For many sellers, it is still unknown whether the number of orders on Prime Day will explode, but what is certain is that the number of orders in the one to two weeks before the promotion has continued to be cold.

Since this week, many sellers have reported a sharp drop in orders:

“Starting from Monday, the traffic volume was halved and the sales volume was halved.”

"It plummeted by 66%, and the four US stations were almost the same, comparable to the period after Christmas..."

"I'm super miserable today... Yesterday it was over 3,000, today it's over 100."

“In July, my sales really fell back to February and March.”

"This is the worst sales day this year, but it can't get any worse, or else my heart won't be able to take it."

Orders have plummeted, with a 40% drop and sales cut in half . Sellers said sales were getting worse day by day, and they doubted their eyes when they saw the backend data. "It was very sudden. The sales of the US site in the past two days were too bad." said a seller.

Earlier this week, due to the combined influence of the weekend, the US Independence Day holiday , and the eve of Membership Day , the order volume of many sellers fell sharply.

The impact of holidays is significant. Independence Day is the National Day of the United States, which is from July 2 to 5. Americans will spontaneously participate in the holiday celebrations, hang national flags, participate in grand parades and fireworks parties, etc. On Independence Day, American consumers' shopping needs are mainly concentrated on food, beverages, decorations and party supplies, and they have no time to shop for other categories online.

Sellers who have been engaged in cross-border e-commerce for many years have formed "muscle memory" that orders will "drop like a dog" almost every year around July 4. But even taking into account the impact of Independence Day, many sellers still believe that the current order drop is beyond expectations.

Some American customers pointed out the reason for the current decline in orders in the US market : due to continued inflation, prices have risen, but people's income has not increased, which has led to a decline in consumption. This year, the task of almost all brands or stores is to clear inventory. The situation in Europe is similar.

After the holiday, the Member Day promotion is approaching, and consumers are also suffering from "sales promotion syndrome". Sellers who had only heard about the decline in sales of their peers found that their own orders were also beginning to decline, and foreign buyers also began to pay attention to placing orders.

The sales volume is unbearable, and the advertising performance is even more speechless. "My ACoS is out of control, it just soared, and it made me black." said an operator. Sellers said that the advertising bidding starts two weeks before Member Day every year. One of them lamented that Amazon's suggested bid for a word has reached one-third of its selling price; another seller's feeling was even more exaggerated: " I didn't expect that a product of about $10 could have a CPC of $9.18 one day."

After noticing the deterioration in advertising conversion rates, some sellers decisively lowered their budgets and prepared to spend all their advertising expenses on Member Day.

Orders have been declining for several days. In the eyes of many small and medium-sized sellers, Prime Day is no longer a carnival holiday . A large number of orders were lost before and after the big sale, and even if they participated in the Prime Day promotion, they might not be able to make up for it.

"There are no orders at all. What I hate most is the Member Day. It is very bad before the big sale every year. Small sellers have no profit at all." This resonated with other colleagues. "I hate Member Day too. There is no profit at all. Moreover, the increase in the volume on Member Day is not enough to make up for the decrease in orders on weekdays."

Sellers are worried about the drop in orders, but the poor sales will continue in the next few days, or even worse. On the one hand, buyers are beginning to hold back their purchases in anticipation of the Amazon promotion that will start next Tuesday; on the other hand, other retailers’ promotions will start first .

Target's Circle Week promotion runs from July 9 to 15 , with discounts ranging from 20% to 50% on women's clothing and pool toys, as well as $15 free coupons for household necessities such as cleaning. This event starts earlier and ends later than Amazon and Walmart's promotions, giving shoppers enough time to compare prices.

Walmart's Walmart+ Week promotion lasts for four days from July 10 to 13 , starting one day earlier than Amazon's Prime Day and ending one day later. The platform informed sellers that it hopes they can offer the best prices for best-selling products during the event.

The overlap of promotion times and the competition among retailers will affect the order volume of Amazon sellers before and even during the promotion.

Some sellers lamented that this year was worse than any other year and they were almost unable to support themselves. From the timeline, poor sales were very common in the first half of this year, and in the end most sellers failed to achieve their sales targets.

More than 80% of sellers failed to achieve their first half sales targets

In recent days, seller @跨跨慕 launched a poll to find out whether the cross-border people have achieved their performance goals in the first half of the year. Among the 165 people who participated in the vote, 18% chose "goal achieved, satisfied", 27% of sellers "80%-90%, average", and as many as 55% of sellers chose "far from it", because the boss's pie was too big, the market was not good, or their own reasons.

One seller was quite excited, as his performance in the first half of the year increased by 80%, completing 78% of the whole year of last year , and he was full of expectations for the second half of the year. Another seller said that in the first and second quarters of 2023, 41.1% of the annual GMV target and 41.6% of the annual profit target had been completed, and he would continue to work hard in the third and fourth quarters.

New sellers are more likely to achieve growth. One seller analyzed that last year, there were fewer products and a smaller base in the first half of the year, but this year's performance increased by 3 times compared to last year, and has already completed 70% of the full year of last year.

An independent website seller also exceeded his sales target for the first half of the year, thanks in part to the support of old customers for placing orders for new products. "This year's original goal was to make the website more solid. With the help of AI, we saved a lot of time optimizing the website. Various preparations are also being made for the shopping season in the second half of the year."

Seller @跨跨老张 made a work summary: "I took a quick look at the data for the first half of the year. Sales increased by 10%, and profits fell by 10%, which is within an acceptable range. After all, advertising costs have risen too much. But the good thing is that recent sales are relatively stable, and this year's Q3 should be much better than last year. If we can hold on to the slowest season, the full-year target is still expected to be achieved. The only hope is that the exchange rate will not go on a roller coaster."

Increased sales do not mean increased profits. Some sellers complained that they worked so hard but found that they did not make much money. "Sales increased two or three times, but there was no profit."

Overall, sellers with year-on-year sales growth are still a minority, and many sellers said that their performance has not increased but declined. They said that this year's performance is not as good as last year, and the performance in the first half of the year was dismal, with sales falling by half to only 50% of last year. " We have declined a lot this year, and it feels like everything is wrong. " A seller was very distressed.

In the first half of the year, many sellers suffered a "Waterloo" in the just-passed June.

Some sellers said that orders were good in May, but plummeted in June, only equal to last year. This is not the worst. One seller said: "The performance in June was the worst in the first half of 2023, and the profit shrank by 15% this month. Is this the result of the downward trend in the overall environment? I worked hard to open products, but the more I opened, the more I lost."

The top-selling products attract more attention.

On June 21, Zhiou Technology was listed on the Shenzhen Stock Exchange's ChiNext. According to third-party data, on July 5, Zhiou Technology added the concept of "preliminary increase in semi-annual report", and the reason for selection was: the company expects the performance from January 1 to June 30, 2023: net profit of 175 million to 185 million yuan, an increase of 58.56% to 67.62%.

Within 6 months, a total of 6 institutions predicted that Zhiou's average net profit in 2023 would be 389 million yuan, a year-on-year increase of 55.66%.

Tongtuo Technology's parent company Huading shares is expected to disclose its interim report at the end of August. In the first quarter of this year, Huading shares had a revenue of 1.545 billion yuan and a net profit of 5.398 million yuan, a year-on-year increase of 107.08%. Tongtuo issued more than 500,000 incentives to the 103 individuals who were shortlisted for the Q1 quarterly incentive award.

From the perspective of the whole year, the performance of big sellers is relatively optimistic.

The agency made predictions on the performance of several listed cross-border e-commerce companies. According to the forecast, Huakai Yibai's average net profit in 2023 will be 342 million yuan, a year-on-year increase of 58.27%; Jihong shares' average net profit in 2023 will be 429 million yuan, a year-on-year increase of 133.23%.

For cross-border companies, the second half of the year carries most of the performance tasks. On the Amazon platform, Prime Day will fire the first shot of the second half of the year.

Meiya PD sales may increase by 10%, with multiple sites setting records

In markets such as the United States, economic conditions are directly affecting consumers' purchasing power, as they begin to value discounts and cut back on non-essential spending.

"Consumers are cutting back on their discretionary spending," said Cassie Socha, an analyst at research firm Gartner. "Consumer spending has slowed across the retail industry over the past few quarters. So the need to drive incremental revenue in the third and fourth quarters is pressing for most retailers."

He mentioned that many retailers are competing for less consumption, and promotions are the best way to grab consumers' attention. Amazon's Prime Day will be held at this time.

Market research firm Insider Intelligence analyzed that although it is no longer as grand as before, Prime Day is still a major event for Amazon and other retailers riding the membership day wave. It predicts that Amazon Prime sales in the United States will increase by nearly 10% this year to US$8.03 billion.

Electronics are getting a lot of attention . Analyst Andrew Lipsman believes that during the pandemic, many consumers bought big-ticket items they wouldn't buy for several years, driving a three- or four-year upgrade cycle. Now the category should make a comeback.

While a full category rebound may not occur until 2024, it is good news to see growth this year. "If we see a rebound during Prime Day, to me that's actually a great indicator, not just for Amazon or e-commerce, but for the state of retail in general, that a huge category is coming back."

In addition to the US market, the UK and Australian sites also have good sales expectations.

According to the Adobe Digital Economy Index, Prime Day will increase customer spending by 92% compared to normal consumption levels. Prime Day will drive £1.2 billion in online spending over the two days.

"As inflation and interest rates continue to weigh on consumer spending, big discount events like Prime Day are increasingly viewed by consumers as an opportunity to get extra value, " said Alan Simpson, lead analyst for Adobe's Digital Economy Index. " We expect 2023 to be a record year for Prime Day spending , while also seeing an increase in buy now, pay later options to spread the cost of purchases over time. "

Australian online spending is expected to hit a record high during this year's Prime Day sale, according to research from Pattern .

“While cost of living pressures continue to weigh on household budgets, Amazon’s Prime Day is not expected to feel the impact of reduced consumer spending. Our research shows that 84% of consumers expect to buy more or the same amount of goods in the market, with only 16% planning to spend less.”

The consumer trend report shows that among Australian consumers, 58% would consider buying household and kitchen items, 57% would consider buying electronic and computer equipment, 55% would consider buying books or e-books, 47% would consider buying sports, fitness and outdoor products, 44% would consider buying toys, children's and baby products, 44% would consider buying luggage and travel accessories, and 37% would consider buying skin care products and cosmetics.

Judging from market expectations, this Prime Day is still worth looking forward to.

Economic pressure continues, "low price" becomes the decisive factor in placing orders

It is undeniable that the continued economic pressure has changed people's consumption habits, and some entertainment projects have been cut due to cost issues.

For example, Americans love summer travel, but a recent exclusive survey in the United States shows that due to rising living costs, nearly 50% of employees will not go on vacation in the next three months. 60% of respondents said that their choice of vacation is affected by affordability, 52% of respondents choose to travel to a cheaper place, and 48% of respondents choose to travel for fewer days than ideal.

Another change is that Americans no longer stop working completely when they are on vacation. Most people have to answer emails, make work calls, etc. during their vacation. People's job security has declined, and they believe they may be fired or not get the promotion they want if they don't answer emails while on vacation.

Even if consumption is unavoidable, people will try to keep the price to the lowest.

Amid the ongoing inflation woes, parents plan to spend 15.7% more this year than last year, which is higher than the rate of inflation, according to a new back-to-school survey conducted by JLL of more than 1,000 parents of school-age children.

To adjust to higher prices, more than half ( 55.2%) of parents plan to spend more this year, but nearly a quarter (23.8%) plan to spend less, and 18.6% are keeping their budget the same. Many respondents said they plan to shop at mass merchandisers (78.3%) or online retailers (68.7%). The top three retailers back-to-school shoppers plan to buy from are Walmart ( 58.6%), Target (54.2%) and Amazon (46%) .

“Consumers will be on the lookout for discounts, flash sales and other ways to save this back-to-school shopping season,” said Naveen Jaggi, president of JLL’s retail advisory services, in a statement. “They are looking to maximize the value of their purchases, and especially in a challenging economic environment, retailers that offer discounts will be particularly attractive to consumers.”

Although consumers will spend more on back-to-school shopping this year, the search for bargains suggests that inflation has continued to cut into their budgets. An NPD report released last August found that more than 40% of consumers would not make back-to-school purchases until they found a sale.

While Amazon is one of the top three retailers for back-to-school shoppers, fewer consumers plan to shop there than last year. The JLL survey found that 46% of consumers plan to buy back-to-school items on Amazon this year, down slightly from 50% the year before. Walmart also saw a small drop, while Target saw a slight increase.

Next week, the three companies will once again compete for customers through their concurrent summer sales, and sellers on the platforms will also compete.

According to forecasts, total sales for all U.S. retailers during Prime Day will reach $13.48 billion. While Amazon still accounts for more than half of that number, sales figures for non-Amazon retailers are growing, and Amazon is losing some market share as a result.

However, Amazon sellers don't have to worry too much. Analysts believe that although other retailers have been catching up with Amazon during Prime Day, such as Walmart and Target, which have launched their own sales days to attract consumer attention and conduct competitive promotions with Amazon, no other retailer can compete with Amazon's "crazy sales and activities." This requires sellers to make enough concessions on prices.

Sellers still attach great importance to Prime Day. Some companies have arranged night shifts or adjusted working hours to match buyers' shopping times, such as starting work at 2:30 p.m. and leaving work at 6-8 a.m. the next morning.

According to past experience, only those who sign up for the event can achieve a big promotion effect. Most of those who have not signed up are there to accompany the prince to study. Therefore, many sellers have signed up for different forms of promotional activities, but the profits have been greatly reduced.

"I reported the Prime member exclusive discount, but after calculation, there is basically no profit," said one seller. Other sellers refused to do useless work, did not participate in the event and raised the price by 10%.

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