The king of volume enters Amazon: the profit is almost 0!

Price wars between sellers are becoming more rampant. The top sellers are rushing in. Even if their profits are squeezed out, they still have to compete fiercely in the category. Similar situations are not only found on Amazon. The top sellers on Walmart enter the market at a price close to the cost price. The sellers on the platform can be described as paying back. Some sellers even admit that " sellers who switch to Walmart may have a shorter lifespan than those on Amazon. "

The East China Roll King enters the market, regardless of profit clearance, sales are still bleak

Some sellers reported in social forums that a factory seller had entered the Amazon auto parts category, which seemed to indicate that the internal competition was continuing to the end.

Normally, the highest market price of an auto parts product during the peak season is between $200 and $300, but after this factory seller entered the market, he immediately started a crazy internal discount mode, discounting the product to $49. Some sellers did the math and found that after deducting the first-leg freight, platform commission, and CPC costs, there was basically no profit from just selling the product.

However, as factory-type sellers, some industry insiders admitted that they are probably making money, which is why they are so inward-looking.

According to industry insiders, the company that sells this product is an integrated industrial and trade company from Zhejiang. The reason why it started to act like a philanthropist right after entering the market is that compared to ordinary sellers, factory-type sellers have sufficient supply chain and product advantages, controllable costs and considerable profits. For example, if a product priced at $200 is sold at $100, the factory still has profit margins, but ordinary sellers may start to lose money at this time.

So much so that most sellers believe that even if the product is sold at $49, there is still room for profit, but it is almost 0. One seller said that this product has been on the shelves for more than 600 days, and the current monthly order volume is about 10 orders, and it is likely that they are just clearing out the stock.

Looking at all the major categories on Amazon, the phenomenon of low-price involution can be seen everywhere ↓

My product normally sells for $99, and many of the top sellers directly grab half of the traffic;

The price is lower than the market price and the discount is 80%, so it is undoubtedly the king of volume;

The price that originally bought 2 products can now buy 8. Do you think it’s a good deal?

Some sellers said that it is not only the auto parts category that is involuted, but also the gardening category. I was originally interested in the mobile potted plant stand, which has a large capacity and a lot of competition but no monopoly. I thought about looking for a manufacturer to check out the products, but in the end I chose two models and calculated the price, only to find that it was much higher than the average price on the platform, so I had to give up in the end.

According to past trends, the prices of low-priced products have become more and more competitive, and the prices have subsequently become lower and lower, but now high-end products seem to have the same signs, causing many sellers of high-priced products to start to worry.

However, compared to ordinary sellers, the most competitive ones are factory-type sellers. As cross-border exports enter a new stage, foreign trade factories have also begun to explore the path of transformation, and the transformation to cross-border e-commerce platforms is the destination for most factory-type sellers. With the cost and R&D advantages of integrated industry and trade, they place orders quickly and have considerable sales on Amazon, but this has also intensified the internal competition with ordinary sellers.

This crazy internal competition model is not only seen on the Amazon platform. The internal competition on the Walmart platform we are familiar with should not be underestimated, and it is even more competitive than that of Amazon.

Sellers who have surpassed Amazon: Working for Walmart may shorten their lifespan

The deepest feeling of many sellers who switched to Walmart is that orders are sporadic and fail to meet expectations.

"I was so quiet early in the morning. I sold 19 units in total, with a sales of $273.79," said a seller. Sales were low, and profits were also low. The products were sold at almost cost price. It is reported that the account has been operating for a year and a half, with 20 products, but on average, there is not a single order for any product. Videos, comments, and ads were optimized, and everything that could be optimized was done, but the daily sales still did not improve at all.

There are many sellers who have the same experience. One seller confessed: "It has been almost two years since I switched to Walmart, but my listings still only have one or two orders a day. I am really desperate." Not only is the gross profit margin low, the traffic is also poor, and the cost price is 0 orders a day. I can't make it. I just jumped out of the pit of Amazon and fell into the pit of Walmart again. It's all a pit.

Some sellers pointed out that this situation is not as good as the previous two years, when they could still make some money. The same children's tent sells for $38 on Amazon and only $25.99 on Walmart, a price difference of about $10. According to calculations, one product can make about $5.

But now, the product price is close to the cost price, and sellers have almost no profit. Especially after Walmart announced this year that it would completely remove the annual GMV investment threshold restrictions for Chinese sellers.

The number of Chinese sellers entering Walmart has skyrocketed. At that time, data showed that China accounted for more than 90% of Walmart's new international sellers, accounting for nearly half of all new sellers. As you can imagine, with the entry of a large number of Chinese sellers, the Walmart market has become saturated, and the competition is also evident.

If you want to compete with Amazon, low prices can be said to be a very effective means of competition. But for Walmart, its focus is on its own brands. Currently, there are more than 100,000 items on the platform, of which private brands account for 29%.

Since ancient times, self-operated products have been regarded as the favorite products of Walmart. In order to meet the platform's low-price marketing strategy, Walmart will not touch its own brands, but will only squeeze profits from other brands. This is also the reason why many sellers have worked hard for more than half a year, but in the end they only make a profit of the cost price.

In the eyes of some sellers, Walmart is not like Amazon, where accumulating listing weight can double sales. Some sellers have been doing this for more than a year and still don’t understand Walmart’s logic for pushing products. Rankings and sales are not linked at all. Even if the market has not changed, it is common for sellers to not receive orders when restocking after out-of-stock.

"If you spend a lot on advertising, at least you'll get sales, but Walmart does the opposite. They don't spend a lot on advertising, but they get more sales," said a seller. Selling products on Walmart is a science.

Some big sellers are able to play Walmart thoroughly and get to the top of the pyramid, but small and medium-sized sellers are still struggling on the road, and it is even more difficult to break through the siege. So many sellers have summarized Walmart's guide to dissuading them from joining: the backend is lame, and they spend an hour every day waiting for the backend to load; the delivery fee is ridiculously high, and there is another fee for returns; orders are entirely dependent on fate, and even if you spend money on advertising, you may not be able to place an order; they block accounts without blinking an eye, and block illegal accounts at will, but they don't care about copycat sales and fraud.

For sellers, operating on multiple platforms can solve the problem of risk concentration, but when choosing a platform, multiple factors should be considered.

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