The cumulative orders exceeded 10 billion! Shenzhen is making a lot of money

In recent years, with the rapid development of the cross-border e-commerce industry, more and more sellers have entered the market. Market competition has become increasingly fierce, and competition on the supply chain side has become the key to success for cross-border sellers .

Huanjin Technology has gradually become a well-known seller in the cross-border circle through its powerful supply chain system.

Supply chain system boosts rapid growth of Huanjin Technology's performance

Huanjin Technology Co., Ltd. was established in 2009 and is headquartered in Shenzhen. The company's products cover dozens of categories and hundreds of thousands of products , including outdoor products, clothing, home furnishings, pet products, watches and jewelry, computer accessories, mobile phone accessories, car products, beauty and health care, office and commercial, toys and gifts, etc.

At present, Huanjin Technology has expanded its business to more than 200 countries around the world, with cumulative sales orders reaching tens of billions.

Huanjin Technology’s rapid development in overseas markets is inseparable from its outstanding product supply chain integration system .

The supply chain of cross-border e-commerce involves multiple links, and problems in any link will affect the overall situation. Therefore, the establishment of a supply chain planning system becomes crucial.

In an exclusive interview with Ennet, Ju Peiquan, supply chain director of Huanjin Technology , said that the supply chain planning system , as the driving force of the two major modules of production and sales, has a key impact on the management level of the overall operation of e-commerce. To build a supply chain planning system, we must first look at the company's business model. The simpler the business model, the more conducive it is to the value of the planning system. Companies that sell general goods involve many platforms and categories, and their supply chains are widely distributed, so the planning becomes more complicated and requires constant real-time monitoring.

Secondly, there must be a professional planning team deployed, which must have sufficient understanding and accurate judgment of the product delivery cycle, platform structure, product category, sales forecast, event promotion, logistics timeliness and pricing system, enterprise internal consumption time, and enterprise financial situation, so as to greatly improve inventory turnover times and reduce the adverse effects of insufficient or excessive inventory on the normal operation of the enterprise.

Furthermore, all calculation logic requires the auxiliary support of a strong technical team to fully explore various data and constantly revise the stocking logic to improve the accuracy of stocking.

Huanjin Technology has extensive experience in refined operations of the supply chain. The company's product selection , procurement, logistics and warehousing are all managed based on data platforms. One of the secrets to Huanjin Technology's success is to achieve refined operations to the extreme.

When talking about the refined operation of Huanjin Technology, Ju Peiquan said that many large sellers currently have sufficient product resources, but through data analysis, the proportion of products on sale is only about 20%, and the risk inventory of about 80% of low-selling products is relatively large. At this time, it is necessary to do subtraction, and settle down the products that really create profits for the company and have lower risks, and make them stronger and more refined. Generally speaking, if the proportion of profit created by a product to its cost is less than 50%, it is unhealthy and these products should be eliminated.

He said frankly: " The refined operation of the supply chain also requires improving the management level of suppliers. In the past, we usually selected suppliers according to the assessment dimensions of traditional manufacturing. But in fact, I have visited a lot of suppliers in recent years. We have added more dimensions to the assessment of suppliers, and some even assess the academic qualifications of the supplier's legal representative. Although it is a bit far-fetched, after later verification, it can indeed help us avoid some detours. For the supply chain of some core products, we also proposed that their factories be set up near our storage center, which greatly improved the product delivery time. In short, the refined operation of the supply chain involves many links, and managers need to think about the space and methods for improvement every day. "

Huanjin Technology distributes its products on multiple platforms and currently has thousands of suppliers, with a supply chain team of hundreds of people. In this case, it is necessary to ensure the gross profit margin and order volume of core suppliers , while also shortening the payment period to optimize the supply chain .

Ju Peiquan clearly pointed out that the cultivation of core suppliers is very important. Usually the company will take into account the gross profit margin of the supplier. Like e-commerce operations, it cannot guarantee that all products will make money, but will look at the annual revenue and profit comprehensively. The company will tend to factory-type suppliers. Once the qualifications for cooperation are confirmed, whether it is new product development or the transfer of orders for trade-related products, resources will gradually tilt to the factory. When cooperating with factories, information should be as symmetrical as possible, especially for sales forecasts or account security, which must be synchronized with the factory in a timely manner. Reducing the risks of suppliers is actually protecting yourself. Therefore, there are still many factories that have cooperated with Huanjin for ten years, mainly because the two parties have established a mutual trust mechanism.

How can sellers achieve sustained profitability on the Amazon platform?

In addition to managing the supply chain, improving their own sustainable profitability on the platform is also of great concern to sellers.

Amazon is now facing serious internal competition , and it has become increasingly difficult to maintain profitability on the platform.

In this regard , Ju Peiquan also gave his own suggestions , " It is not an easy task for any company to achieve sustained profitability on the platform. Huanjin has also experienced a downturn, but after adjusting its operating model, working hard on products, studying more strategies in operations, and avoiding pitfalls as much as possible, it can achieve sustained profitability. After so many years of development of cross-border e-commerce, we can see that foreign market demand in China has weakened or shifted. If you want to achieve high profits, it is basically difficult. Huanjin adheres to the concept of sustainable operation, works hard on the supply chain, and achieves simultaneous growth in sales and overall profits by giving benefits to consumers. "

Ju Peiquan also talked about cost reduction and efficiency improvement. He believes that it has become very difficult to achieve efficiency improvement nowadays, and the per capita sales volume has not fluctuated much. Especially in 2022, many companies in the industry will reduce their staff due to the pressure of operation, in order to maintain labor efficiency. The company hopes to achieve cost reduction through supply chain management, which will drive the continued growth of performance. For pan-category companies, many hidden costs are easily overlooked. Huanjin attaches great importance to the management and optimization of the supply chain and increases investment in cost control.

He mentioned that in just three months, the cost of a certain category of Huanjin dropped by 6%-8%, which gave the company more confidence to increase sales. Therefore, cost reduction has become more important at this stage.

On April 11, at the 2023 Sixth Cross-border E-commerce Network Marketing Conference hosted by Ennet, Ju Peiquan will share his views and opinions on " Several Core Elements for Amazon's Success " in the summit forum , and give corresponding suggestions to peers and sellers based on his own experience. You can scan the QR code below to register for this conference and listen to Ju Peiquan 's sharing face to face .

Supply Chain

Huanjin Technology