Huge changes in one year! Cross-border sellers no longer talk about growth, they just want to survive

Recently, the reason for the sluggish orders reported by sellers seems to have been found. This week, a seller checked the local traffic trend of Amazon's US site and found that the natural traffic has dropped significantly since April, down 13%, which must have been reflected in the orders.

Sales are sluggish, and sellers are increasingly feeling the pinch, and price wars are becoming more intense. In March this year, the prices of online goods in the United States fell for the seventh consecutive month. Among the 18 categories of goods tracked by Adobe , 10 categories saw year-on-year price declines, with the largest declines in electronics, toys, home appliances, home gardening, etc.

The situation is not good. Sellers lamented that they used to talk about growth targets at gatherings, but now they just hope to survive better. This transformation took only one year. From running at full speed to operating conservatively, cross-border sellers have collectively slowed down.

Under the conservative strategy, refined operations within the enclosure have become a trend, such as optimizing the supply chain and doing a good job of brand protection. Amazon has also put forward more detailed requirements in logistics, and the new policy will take effect tomorrow. Both sellers and e-commerce platforms are working hard to improve efficiency to adapt to the e-commerce callback after leaving the bonus of the epidemic, as well as the "cold stimulus" brought by the economic environment.

Just want to "survive", cross-border e-commerce has cooled down

During the heyday of cross-border e-commerce, many outsiders were attracted to join the industry. One seller said that he gave up his career with an annual salary of 200,000 yuan and started to work full-time in cross-border e-commerce. In today's employment atmosphere where "the end of the universe is to take the civil service exam", this kind of retrograde is hard to imagine. The attraction of the cross-border circle is really strong.

In addition to the rapid growth, cross-border e-commerce has many hidden advantages compared to other industries, such as no drinking culture and little involvement in social etiquette. "I have sold tens of millions of products, but I have never talked to the supplier on the phone. It's me." " I have a slight social phobia, so I chose foreign trade and cross-border e-commerce. I have been doing this for more than ten years and have never met my customers. " Sellers said that these are all plus points for the industry.

In 2020, the sudden outbreak of the epidemic brought huge dividends to cross-border e-commerce. Most sellers were very happy and made a lot of money, which attracted a large number of newcomers. A company started to contact Amazon this year. Because it had accumulated many years of experience in products and had certain financial strength, the company developed rapidly, from 4 people at the beginning to 200 people at present, which caused a lot of amazement.

However, this period of rapid development has become a thing of the past, and the situation of making money easily is no longer there. The trend of cross-border e-commerce has changed, and the development strategy of the industry has changed from the previous aggressive conquest to a defensive strategy. This huge change happened in just one year.

Seller "Amazon Dollar" has a deep feeling, " Before, when we talked to each other, we would say that we would make tens of millions this year, hundreds of millions next year, and the team would expand to 100 people the year after. We were full of passion and hope for the future. Recently, when we talked again, we talked about how to improve the efficiency of the existing number of people, how to dig deep holes and store up food, and how to survive better. The time between the two discussions was only more than a year! "

The seller is worried about the continued sluggish orders in April. " It is obvious that the purchasing power of Americans has declined recently, the conversion rate of non-essential goods has decreased, and the prices of necessities have increased. " It is difficult to say whether the United States will enter a period of economic recession, but he believes that if it really comes to this, the seller will have to re-plan the company's development strategy.

The industry peers agree that the decline in purchasing power also occurred in markets such as Europe. Orders were sluggish, the rankings rose despite a decline in orders, and several new products were not promoted in succession ... All these situations make it difficult for people to ignore the role of objective environment.

In the past two days, the seller "Cross-border Lao Zhang" used the SEMRUSH tool to query the traffic trend of Amazon's US site in the United States and found that the organic traffic (Organic Search Traffic) dropped sharply after entering April, decreasing by 13% to 716 million. Perhaps Amazon realized that the overall traffic has declined significantly. The website's "Paid Search Traffic" (paid search traffic) has increased significantly, increasing by 19% to 88.6 million ; an independent site seller also said that its traffic has dropped significantly since April.

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The reality is that Americans are reducing their purchases of non-essential items and using methods such as buy now, pay later to ease payment pressure.

Adobe's report reveals changes in online shopping in the United States. In February of this year, consumers spent $9.4 billion on household goods, a year-on-year increase of 12.9%; and spent $8.4 billion on groceries, a year-on-year increase of 26.7%. After the holiday shopping season, demand for electronic products slowed, down 5.4% year-on-year to $13.6 billion, and demand for clothing fell 0.6%, with spending in February at $11.3 billion. The trend of category increases and decreases is consistent with 2022.

Due to the continued economic uncertainty, many shoppers use buy now, pay later (BNPL) online to delay shopping payments, and the main commodities of this type of payment are groceries, household items, etc. In the first two months of this year, the share of groceries in BNPL orders soared by 40%, household items also increased by 38%, clothing increased by only 8%, and electronic products decreased by 14%.

Americans fed up with inflation are flocking to the Internet to buy cheaper products, where prices are falling in many categories .

In March, U.S. online prices fell 1.7% year-over-year, the seventh straight month of decline and the biggest drop in four months. Prices fell year-over-year in 10 of the 18 categories Adobe tracks . Online prices were flat in March from the previous month.

With price adjustments in recent months, sellers have felt increasingly fierce price competition, with more severe declines in non-essential categories.

In March, the prices of flowers and related gifts fell by 24.3% year-on-year, electronic products fell by 12.9% year-on-year (down 1.3% month-on-month), toy prices fell by 6.6% year-on-year (down 1.2% month-on-month), household appliances fell by 4.9% year-on-year (up 0.8% month-on-month) , home and garden products fell by 4.9% year-on-year (down 0.3% month-on-month), and furniture and bedding fell by 0.9% year-on-year (down 0.3% month-on-month). Consumers are increasingly willing to buy furniture online.

Affected by continued inflation, necessities are rising in price. Grocery prices rose 10.3% year-on-year (up 0.4% month-on-month), and consumers are increasingly buying online; personal care categories rose 4.4% year-on-year (down 1.5% month-on-month), and clothing prices rose 6.6% year-on-year (up 1.8% month-on-month). Other categories that rose in price year-on-year include office supplies, pet supplies, over-the-counter drugs, tools and home decoration, and medical equipment and supplies .

In this situation, many sellers are facing a situation of reduced sales and falling unit prices. How can they survive better under a conservative business strategy? Sellers can optimize their business and operate in a refined manner from operations to supply chain.

Amazon's new policy will take effect tomorrow, requiring more "detailed"

A leading seller in Shenzhen believes that Amazon's refined operations include refined product lines and products, all-round operations ( driving listing growth through the three pillars of operation rhythm, listing details page and advertising), advertising, performance cost management, supply chain management, and brand building.

One seller suggested optimizing the supply chain . He said that he had been selling one of his products for two years, and he had only recently found the source factory. The source quoted a price of about 13, and the trader sold it to him for 21. He sold more than 4,000 sets a month, and this time he optimized it to produce half a hit. The seller sighed that it was more comfortable than developing products.

In terms of brand operation, a malicious operation was recently exposed in the industry . A seller reminded that some people in Fujian registered their English trademarks in China and filed them with the customs. When the seller's goods were exported from China, they encountered customs inspection. Because the trademark logo was printed on the outer packaging, the customs determined that the seller infringed the domestic trademark and required him to obtain a letter of authorization from the domestic trademark registrant. After the seller contacted the other party, the other party asked for a huge price. If he could not get the letter of authorization, he could only destroy the goods, which was very passive.

"I checked the top sellers in the category and found that many of them were maliciously registered in China in the second half of last year." The seller involved said that the operator's profit model should be to register trademarks in batches and then file them with customs. The domestic random inspection rate is relatively low, but by casting a wide net, as long as the seller is found during the 10-year validity period of the domestic trademark, the registrant will be required to authorize and then blackmail them.

This kind of operation is not uncommon. Last year, a seller's trademark was maliciously registered and the other party directly demanded 5 million yuan. After the situation was exposed, many sellers urgently registered their trademarks in China to plug this loophole.

In terms of operations, Amazon has increased many of the original FBA delivery and warehousing fee standards this year, and added new warehousing charges, such as the warehousing utilization surcharge that came into effect in April. Sellers must be careful with their inventory.

Now in the delivery process, Amazon has made another requirement.

Starting tomorrow, April 24, a new mandatory item will be gradually introduced in the "Send to Amazon" workflow of the US site . Sellers will be required to provide an estimated "delivery period" when creating shipments, which is the date range when the shipment is expected to arrive at the operation center.

Between April 24 and May 2, the new process will be gradually extended to all sellers, and the range length required to be provided is 7 days for domestic shipments or 14 days for cross-border shipments.

Which sellers need to fill in? If the seller uses a non-partnered carrier to ship small packages or LTL shipments, they must provide an estimated delivery time when creating a shipment; if they use Amazon's cross-border carrier partner program ( SEND), Amazon Global Logistics (AGL) or Amazon Partnered Carrier (PCP) to ship, they do not need to take any action because the carrier will provide Amazon with shipment arrival information.

Not many sellers use the three free-to-fill methods mentioned above, and most sellers will need to fill in this data in the future. Amazon said that filling in the delivery time period only helps Amazon improve its work efficiency and make warehousing and listing more efficient. Amazon will track shipment performance and notify sellers when shipments miss the estimated delivery time so that more accurate timeliness can be provided in the future.

Sellers can change the date range before the delivery time. Currently, there is no penalty for missing the estimated arrival time, and Amazon will not enforce any action. But it is unclear whether there will be penalties in the future. 41% of sellers voted that they do not like this policy.

Jack Chen believes that, to a certain extent, Amazon's policy is also forcing sellers to choose their own logistics channels. In addition, Amazon's warehouse staff has been reduced. After sellers fill in the delivery time, the standardized truck line will take the appointment number, which will facilitate the platform's internal process, and then the warehouse staff will be deployed according to the warehouse's cargo volume in different time periods.

Amazon not only imposes timeliness requirements on sellers, but has also recently upgraded its assessment of trucking companies . Jack Chen’s company received the following notice.

He introduced that Amazon has updated the terms of use of Carrier central, requiring that appointment time must be canceled or modified within 72 hours, and PO information must be modified within 24 hours, otherwise it will be considered a defect. The attendance defect is recommended to be below 5% and not higher than 10%, and the PO accuracy rate is recommended to be above 95% and not lower than 85%.

Previously, in terms of operational procedures, most truck companies used a large number of reservations to ensure delivery time. For direct delivery, the corresponding PO was added to the appointment number at the appropriate time after the expected pick-up time at the port; for unpacked delivery, the correct PO was added to the appropriate appointment after the cabinet was unpacked. This kind of reservation for delivery time has caused a lot of fake warehouse explosions, resulting in serious cancellation and modification of contracts by Amazon.

After the incident of long-distance warehouse and short-distance delivery was exposed, Amazon improved the accuracy assessment. According to the new assessment, truck companies cannot arbitrarily reserve a large number of appointments, and failure to cancel the reservations in time will also be considered a defect; the appointment time will be adjusted from 3 days onwards, for example, today cannot be rescheduled, and can only be rescheduled to 3 days later; it is not allowed to send the truck first and then make a PO, which will have a great impact on the split dispatch; in addition, the PO accuracy requirement is increased from 70% to 85%, and the PO cannot be added without adding it. It is highly likely that the purchase of appointments will not work, and the appointment threshold has been raised.

Jack Chen analyzed that Amazon's raising of standards may increase delivery time by an average of 2-3 days in the short term . The reservation account reserves and delivery performance of each truck are different, and the specific time effect will vary. In addition, the cost increase mainly includes two aspects: 1. The delivery time is extended, and the probability of generating frame fees and cabinet rentals increases accordingly; 2. The difficulty of account assessment increases, and the cost of adding new accounts and reservation numbers increases.

If there is no hoarding of contracts, there will be no illusion of warehouse explosion, and the cases of not approving, modifying or deleting contracts will be reduced. The purpose of Amazon's assessment upgrade is good. However, the new standards are stricter in assessing the dismantling of containers. When choosing a freight forwarder, sellers should consider companies that operate in compliance with regulations to avoid delays in delivery.

Amazon is going to great lengths to improve warehousing efficiency, so naturally the demand for sellers' cooperation is high. Sellers must also adapt to the delivery time period as soon as possible and try to improve the accuracy of the appointment time period.

Under the impact of inflation, new consumption trends emerge overseas

In a recently released CNBC national economic survey , 69% of respondents held a negative view of the current and future economic conditions in the United States, the highest level in the 17 years of the survey, even exceeding the pessimism during the 2008 financial crisis.

Under the cloud of inflation, people can only cut back on spending. The impact of consumption suppression is very direct. According to data released by Descartes Data, the volume of seaborne container shipments from Asia to the United States in March this year was about 1.22 million (20-foot containers), a year-on-year decrease of 31.5%, and the decline continued to expand compared with February. The transportation volume of furniture, toys, sports equipment and shoes was reduced by half.

U.S. adult footwear spending has decreased. In the 12 months ending January 2023, overall footwear spending by families with children in the U.S. has declined. It is said that no matter how hard life is, children should not suffer, and this is also true abroad. The decline mainly came from the adult footwear market, while spending on children's shoes did not decrease. On the contrary, due to the increase in average prices, per capita spending on children's shoes in the U.S. increased by 9% year-on-year last year.

European consumers are also being frugal. In response to rising prices, Spanish consumers are also cutting back on discretionary spending, with fashion being particularly hard hit, with 49% of consumers expecting to cut spending on fashion categories such as clothing, shoes or accessories over the next six months.

But even in a bad economic situation, there are still some categories that can break through the fog and achieve growth.

Last week, BeautyMatter released Amazon's first quarter report on beauty and personal care , analyzing the performance of the top 25 products in terms of sales and finding that consumers have a subtle preference for high-end products when purchasing beauty products on Amazon.

Amazon agency Market Defense said, "While there has been a lot of discussion about consumers cutting spending or looking for deals in 2022, consumers spent more in the first quarter of this year than in the fourth quarter of 2022. In the first quarter, Amazon's TOP25 beauty and personal care product list has undergone a lot of changes, with more well-known brands on the list than ever before. This pushed the average suggested retail price of the list to $13.78, the highest level since the second quarter of 2022."

As for the beauty brands that make up the top 25 in the first quarter , Amazon buyers' spending has also shifted compared to 2022. Skin care products account for the largest share, reaching 48%, down 4% from the previous quarter; cosmetics account for 24% of the share, body products increase to 12%, tools account for 8%, and hair products are also stable at 8%.

Teenagers' demand for beauty products is also increasing . PiperSandler's 2023 spring survey of American teenagers showed that for the first time since 2020, American teenagers' spending on beauty products exceeded that on skin care products; in the past six months, American teenagers' spending on beauty products increased by 19% year-on-year, of which cosmetics spending increased by 32%. This may be a new market opportunity.

There is a wide demand for beauty products. In Vietnam, where e-commerce is becoming increasingly popular, beauty and health products are also the most popular products purchased online by local consumers.

In Mexico, which borders the United States, sporting goods have always been the most stable category for e-commerce purchases. In March of this year, its e-commerce sales of sporting goods increased by 146%, and the most purchased categories included jerseys, sports leggings, dumbbells, sports shoes, etc.

People's shopping habits are also changing.

Adobe Analytics believes that mobile shopping is expected to surpass desktop in 2023. As consumers accept new categories and online payment methods, they are also shopping on smaller screens. The last holiday season was a turning point for mobile shopping, with the majority of Cyber ​​Week sales ( 51%) coming from smartphones for the first time. In 2022, smartphones accounted for 45% of overall online sales, but based on the current growth trajectory, Adobe expects that smartphones will drive the majority of online sales every month by December 2023, meaning that this proportion will exceed 50% for a long time.

This once again reminds sellers that mobile devices have become an important shopping window, and they should pay attention to mobile page display and product image optimization, and place targeted advertisements.

Smaller retailers have a harder time selling on mobile devices. Large retailers with annual sales of more than $1 billion have performed better in mobile shopping, and their visits to purchases have increased significantly compared to small retailers (annual sales between $10 million and $50 million). Small sellers still need to spend more time on this aspect.