Orders on Amazon have plummeted, are all sellers going to TEMU?

Recently, Amazon's large-scale account information verification has caused a series of sequelae. Many sellers reported that after Amazon's account verification, the number of orders suddenly began to plummet. Some sellers' orders dropped by nearly 70%. Some sellers achieved "0 orders" during the account verification period. It has become a daily routine for operators to be "greeted with cordial words" by their bosses.

In fact, since the beginning of this year, the discussion about "declining sales" in the cross-border circle has never subsided. Sellers attribute the reasons to many aspects, including consumption downgrades and disappearance of dividends in Europe and the United States, and they believe that the popular TEMU is one of the irreversible factors for the decline in sales volume.

In addition to sales, many sellers also mentioned that Amazon SP advertising rules have been updated: the logic of Broad matching has changed, not only has synonym replacement occurred, but it has also been found that the meaning of words has become broader, so that some sellers' ACOS has risen sharply.

Hot-selling categories have also changed. Since the beginning of this year, the sales volume of some sellers in some popular categories has been stagnant, and some cargo agents have claimed that the sales volume of large-scale sales has been halved; however, some hot-selling categories have maintained a high development momentum this year, and sellers are worth a try.

The downgrade of US consumption has led to the decline of some categories, and sellers are having a hard time. Not only are some small and medium-sized sellers in China leaving Amazon, but many Amazon sellers in the US have also been forced to lay off employees, sell themselves, and go bankrupt.

At present, the cross-border industry is in a period of major reshuffle. Is it good or bad for sellers? Today's sellers are more focused on securing profits and diversifying sales channels. Do sellers in 2023 need to stay put if they want to do well on Amazon?

Seller orders plummeted, is TEMU the biggest factor?

Recently, Amazon has been verifying seller account information on a large scale, and sellers who have received emails have begun to complete the verification step by step. However, the account verification has brought some sequelae, and many sellers have reported that their sales suddenly plummeted after the account verification.

"My sales plummeted after the account was verified," one seller said on a social platform. There are many sellers who have the same experience in the comments section. One seller said that his sales plummeted by nearly 70% on the day his account was verified. Another seller said that he did not receive a single order within 8 days of the account verification, and sales recovered only after the account was verified.

According to feedback from sellers, sales showed varying degrees of decline during the account verification period and the period thereafter, and they attributed the reason to the platform account review.

In addition, some sellers reported that an important reason for the recent decline in orders was 520. After 520, they went to work as usual on Monday, but found that the sales volume of the store backend was 0 for two consecutive days. Account restrictions, coupons, and rankings were all normal. The sellers couldn't help but sigh, "Did the Americans get too poor during the holiday?"

However, some sellers do not agree with some of the reasons for the decline in order volume.

In their opinion, since this year, sellers have been complaining about the difference in order volume on social platforms from time to time ↓

February: Several orders a day. Did TEMU steal my Amazon orders?

March: Today’s order, I don’t want to talk. I heard that the company’s developers are sharpening their knives and preparing to develop more new products.

April: The number of orders was cut in half, the traffic in the category was also decreasing, and old products began to become unstable.

May: Amazon order volume plummeted? Is it because TEMU is too aggressive? Go check if anyone is selling your Amazon products on TEMU?

The number of orders has been cut in half, the category traffic has decreased, and the low-price spiral has made things worse for sellers. Some operators have tried to break through by submitting flash sales and increasing advertising as a defense, but the number of orders has not improved. Every day can only be spent in the "cordial greetings" of the boss. Even in dreams, they are working and will be awakened.

In a survey conducted by blogger Cross-border Backpacker in May on the question "How will your Amazon store orders be like starting from 2023?", the voting results showed that 55% of sellers were experiencing a decrease in orders, and the number of sellers with a decrease in orders far exceeded the sum of the number of sellers with an increase in orders and a stable order volume.

It's not just the number of orders. An industry insider summarized the current operating conditions of cross-border sellers : 40% of Amazon sellers maintained revenue growth; more than 50% of Amazon sellers saw a decline in profits; more than 70% of Amazon sellers increased their advertising investment; more than 50% of independent site sellers saw year-on-year revenue growth; more than 60% of sellers reduced their inventory during peak seasons; 70% of sellers reduced staff recruitment; and 60% of sellers were concentrated in the European and American markets.

They believe that the main influencing factors include the following:

Inflation in Europe and the United States remains high, people's living costs are rising rapidly, and actual purchasing power is declining, which in turn curbs consumer demand; in the post-epidemic era, some consumers have shifted from online to offline; with a sharp drop in advertising exposure and a surge in ACOS, raising CPC bidding cannot grab high-quality advertising space; Pinduoduo's TEMU is conquering overseas, and more and more sellers and consumers are rushing to the popular TEMU.

The fact that a group of sellers are rushing to TEMU is considered by industry insiders to be the biggest factor affecting Amazon orders. “Looking at the sales volume and number of reviews of the corresponding products, you can guess why the sellers’ Amazon orders have plummeted,” one seller pointed out.

Many sellers have discovered a phenomenon: their products are copied and sold on TEMU, and because of the low price, they quickly gain popularity on TEMU. The product pictures and basic information are exactly the same. The seller sells more than 500 orders a day on Amazon, but when copied to TEMU, the sales volume exceeds 1,000 orders a day.

Colleagues in the know also revealed that TEMU's investment manager also encouraged sellers to copy and transfer funds from major platforms.

Even though TEMU has many problems, the enthusiasm of cross-border sellers to join has not diminished. In major seller communities, there are many inquiries such as "Can anyone recommend a TEMU account manager?", "TEMU has opened a new site and the traffic has increased. Is it suitable for small sellers to join?", "Can TEMU be done? How to do it?", etc.

Even some Amazon investment managers have switched to TEMU. In fact, the reason why TEMU is so attractive is simple: large traffic and high sales of sellers. Some sellers who have tasted the sweetness have even begun to plan to seize the traffic of TEMU and open more stores.

It is conceivable that TEMU has an impact on the order volume of Amazon sellers. But in reality, is the TEMU strategy really suitable for all sellers?

One seller gave the answer: "I gave up on TEMU not long after I joined." TEMU is only suitable for factory-based sellers or wholesale sellers. Ordinary sellers have no advantage at all. The platform controls the pricing and often requires mid-term price adjustments, which greatly reduces the seller's profits. In terms of products, products with high customer unit prices are not suitable for TEMU. If users apply for a return, the platform will directly refund the money.

At present, TEMU has seized the overseas low-end consumer market with its huge supplier system and traffic. However, under the long-term low-price strategy, can TEMU maintain profitability? Can it retain users and increase repurchase rate? These are all unknowns.

On the other hand, although some sellers are clamoring to leave Amazon, the reality proves that Amazon is still the only choice for sellers to go overseas.

Amazon SP advertising rules updated , some sellers' ACOS exploded

"The underlying logic of the Broad matching mode has changed," a seller reported on a social platform. Normally, the structure of the advertising words is A+B, and the customer search terms will contain two root words, A and B, but now there are forms where the root word appears alone, such as A+C or B+C.

The same situation occurred to many sellers. In addition to synonym replacement, the meaning of words also became broader. For example, if the seller put in the word "latex-free disposable gloves", the matching words would be very irrelevant, such as "disposable gloves" and "latex gloves".

After sellers use the new matching rules, the traffic fluctuation range of broad ads will be larger and the accuracy will be lower. Amazon's way of sacrificing accuracy to increase traffic cannot guarantee the effectiveness of sellers' advertising. In another sense, it is equivalent to sellers investing in advertising in vain, but the conversion rate and orders have not increased, and it has also caused some sellers' advertising ACOS to explode.

So much so that some sellers began to complain ↓

The new advertising rules are useless, and the conversion rate is not as high as that of automatic advertising;

It has a bit of the flavor of Baidu. Amazon's behavior is too ugly.

Is Amazon facing a traffic bottleneck or is it just cutting leeks?

No wonder the broad that had been running well started to match very poor phrases;

The SP broad matching rule change did not just happen this year. Last year, sellers reported that this happened in some of their ads, but the number of sellers involved was relatively small. "During the peak season last year, this happened, but the frequency was not frequent at the time, probably only once or twice out of a few hundred clicks," one seller admitted.

Amazon's rules are undoubtedly moving closer to Google Ads. As we all know, Google Ads has a qualifier "+" function, which is to add a qualifier plus sign "+" in front of the words placed by the seller. In this way, Broad's matching logic remains the same as before. Although such a function has not yet appeared in SP ads, it is not ruled out that it will appear in the future.

Some people speculate that Amazon’s move is to make money, but some sellers believe that Amazon is forcing sellers to conduct refined operations.

Under the pressure of the new rules, sellers will put more advertising investment on close matching, which requires sellers to work hard on listings and also tests sellers' refined operational skills. For example, improving keywords, optimizing advertising copy, and improving product quality are all important measures to increase advertising conversion rates.

Regarding the update of SP advertising, some sellers have made suggestions: If the budget is sufficient, the budget allocation can be the same as before, but the frequency of negative words should be increased; if the budget is insufficient, the Broad group can be appropriately reduced or even closed, and the proportion of Phrase and Exact can be increased to ensure the accuracy of the traffic.

Energy storage power supply sellers have little demand, while e-bike and other categories are favored by experts

In the view of some veteran sellers, there is no longer a saying on Amazon: "Which category sells better?" At present, most categories on the Amazon platform are basically saturated. If sellers want to choose categories to delve deeper into, in addition to considering financial strength and industry resources, the overseas segmented tracks that the investment circle pays attention to are also a reference option for sellers.

In 2022, the energy storage track became the hottest category in cross-border e-commerce, and hundreds of investment institutions surrounded the top projects in the energy storage track.

Huabao New Energy, the first portable energy storage stock, set the highest IPO issue price of the year at 237.5 yuan per share. Its brand Jackery has a monthly sales volume of 17,742 and sales of US$6.5 million, becoming the brand with the most sales of "portable energy storage power supplies" on Amazon; EcoFlow Zhenghao signed a listing guidance agreement with CICC and plans to list overseas. Currently, the valuations of EcoFlow Zhenghao and Delan Minghai are both over US$1 billion, and both have become new unicorns.

Anker, which we are all familiar with, also launched a series of portable energy storage power products in 2022. Anker Powerhouse 757 is the company's first portable energy storage flagship product with a power of more than 1500W. It uses lithium iron phosphate batteries with more stable performance and longer life. It became the number one in the same category on Amazon on the first day of its launch.

"Overseas energy storage sellers have made a lot of money in the past few years," this is the deepest feeling of industry insiders. The energy storage track has been snapped up, capital has been continuously injected, and sales have soared, which has also made more sellers see the potential of the energy storage track and began to intensively deploy overseas energy storage power supply business, but danger has also quietly arrived.

With the decline in natural gas prices in Europe and the reduction in government subsidy policies, the demand for energy storage power products in Europe and the United States has decreased to varying degrees, and the latest expectations of institutions are not as optimistic as before.

"The popularity of energy storage power supplies has dropped a lot this year, and the sales volume of cooperative large-scale sales has been cut in half," a freight forwarder reported. Last year, the shipment volume of energy storage power supplies was large, but this year it has been reduced by more than half, especially to top customers.

However, although the growth rate of the energy storage power supply track has declined and sellers' shipments have also decreased, people in the industry still have high expectations for it. They believe that the energy storage track is currently in the development stage and there will be more possibilities in the future. Companies that are deeply involved in this category should pay more attention to how to build good technical support and how to adopt differentiated strategies to stand out in the fierce competition.

Unlike the declining popularity of energy storage, the E-bike track is still very popular overseas, with more and more capital investing in the E-bike track. In the past two years, investment institutions have invested more than 10 billion yuan in the E-bike track . Among them, there are well-known companies such as Hillhouse Capital, which invested in Tenways in the early stage and invested heavily in European E-bike brand VanMoof and E-bike motor brand Max Power.

E-bikes, which are at the intersection of travel alternatives, outdoor sports and low-carbon environmental protection, have become popular in Europe and the United States, and have also fertilized a large number of Chinese electric vehicle suppliers. Relying on the efficient domestic supply chain system and the ultimate cost-effectiveness that is difficult to match by local brands in Europe and the United States, some Chinese companies are rushing into this track overseas. Last year alone, China 's E-bike exports reached 9.96 million units, a year-on-year increase of 121%.

In addition, smart home appliances and consumer robots are also one of the tracks favored by investors. In the second half of 2022, smart home appliances ushered in an explosion, and products such as automatic cat litter boxes and pet groomers ushered in explosive growth, which also verified the more possibilities of such products in 2023.

Looking at the overseas best-selling brands such as Ecovacs, iRobot and Anker's eufy, they have all achieved good results on Amazon. iRobot focuses on sweeping robots and is a global leading brand. It was acquired by Amazon due to its excellent performance; Anker's eufy brand focuses on sweeping robots, smart light bulbs and smart scales. Sweeping robots are the brand's star products and are among the top in multiple Amazon channels.

The cross-border industry is undergoing a major reshuffle. Will sellers have to survive in 2023?

The plummeting sales volume, high advertising costs and low conversion rates, as well as the recovery of hot-selling categories, are undoubtedly also highlighting the cross-border e-commerce market in 2023. "It is becoming increasingly difficult to make money in cross-border e-commerce, and life is not as comfortable as before," this is the deepest feeling of sellers at present.

Inflation in the European and American markets, which sellers mainly target, continues to increase, local consumer demand has not picked up, and competition among sellers has become more intense. As a result, many sellers have left Amazon, not just small and medium-sized Chinese sellers. Many big American sellers on Amazon have also been forced to lay off employees, stop platform operations, be acquired, or even file for bankruptcy protection.

Wolverine Worldwide, which owns multiple leading brands in categories on the Amazon platform, is a giant in the footwear category. It suffered a net loss of US$361 million in the fourth quarter of 2022. Wolverine is preparing to implement a brand restructuring and layoffs plan;

Fort Products Ltd, a top seller in the insecticide category on Amazon UK with over 50,000 reviews, was acquired by Jeffs' Brands, another top seller on Amazon , for just £1.6 million.

Fully, a home furnishing e-commerce brand with nearly 18 years of operation history, whose ergonomic office products are best-sellers on Amazon, ceased operations at the end of April, and its parent company MillerKnoll also announced a company layoff plan;

Bed Bath & Beyond, a well-known American listed home furnishing platform , raised funds and formulated a new strategic plan, but it was still unable to save the company and finally filed for bankruptcy protection;

The chill in overseas markets has not yet dissipated.

The continuous collapse of vertical e-commerce platforms not only indicates that consumer demand is slowing down, but also that more traffic will be concentrated on platforms such as Amazon and Walmart. The collapse of old companies also shows the strong impact of new brands in the industry.

Under the current circumstances, with the global economy in a downturn and after the explosive growth in the past two years, the reshuffle in the cross-border industry will only become more rapid. The emergence of new brands will make the competition among sellers more and more fierce, but it is also a good opportunity for sellers to improve themselves.

"If you want to stick to Amazon, it's right to stay alive," a seller said with emotion. The economy has cycles. Now it's winter, which means spring is not far away, but no one can be sure when spring will come. After three years of the epidemic, people have developed the habit of online shopping, and the market share of cross-border e-commerce is also increasing. The current recession is mostly based on the economy.

Don’t expect cross-border e-commerce to have the same money-making opportunities as in the past two years. In the economic winter, how to improve products and yourself is the most important thing. Some sellers give suggestions: Don’t blindly pursue high sales, start from profit, and it is more important to secure the profits; pursue diversified sales channels, and you can find sales channels that are more suitable for your products outside of Amazon; strengthen the verticality of store products. If you choose outdoor products, then the store should focus on the product line of outdoor products ...

Improve core competitiveness and refine operations, and when winter passes and spring comes, welcome the blooming of flowers.

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