Individual sellers form groups to start working! Cross-border e-commerce rebounds from the bottom, and sellers regain confidence

Today, I believe that many cross-border people have ended their holidays and re-entered the cross-border brick-moving army. The cross-border circle, which has been quiet for a long time, has become lively again. However, unlike the beginning of previous years, there are many people who are ready to do a big job this year.

As the saying goes, everything will turn around when it reaches its lowest point. When anything reaches its lowest point, it will rebound. Last year, affected by inflation and economic downturn, most sellers had a very depressing life. The most direct reflection was that the financial reports of major sellers generally showed that revenue increased but profits did not, and some even suffered losses. The year-end peak season, which should have brought rich returns to sellers, also went silent.

Therefore, as the epidemic is eased and the economy recovers, many people are ready to fight a counterattack. Some recruit soldiers and build teams, turning from working alone to working as a team, or look for partners, divide the work and cooperate, give full play to their strengths, and develop in a refined and large-scale manner.

According to Marketplace Pulse's research, Chinese sellers on Amazon are likely to return by the end of 2022, proving that some people actually made plans for this year's development last year.

However, those who are ready to make a difference also have to face some practical problems, such as whether to go out on their own or find a partner for mutual benefit, how to plan their product line in the new year, and what is the optimal team size.

The cross-border e-commerce industry is still booming, and individual sellers need to form groups to continue working

As we all know, Shenzhen is the capital of "cross-border e-commerce". In the cross-border circle, there is a saying: China's cross-border e-commerce looks to Guangdong, and Guangdong's cross-border e-commerce looks to Shenzhen. Shenzhen's development largely represents the development of China's cross-border e-commerce. A set of data released recently shows that Shenzhen's cross-border e-commerce is booming.

According to the Shenzhen Municipal Bureau of Commerce, combined with the statistical data of the China (Shenzhen) International Trade Single Window and the statistical data of various regulatory venues, it is estimated that the import and export volume of cross-border e-commerce in Shenzhen in 2022 will exceed 180 billion yuan, an increase of more than 2.3 times year-on-year, and an increase of approximately 130 billion yuan compared to 2021.

The Shenzhen Action Plan for Promoting High-Quality Development of Cross-Border E-Commerce (2022-2025), released in October 2022, mentioned that the import and export volume of cross-border e-commerce will exceed 100 billion yuan by 2025. Judging from the above data, Shenzhen has completed the goal set in the action plan three years ahead of schedule.

In the context of economic downturn and stagnant development of many industries, cross-border e-commerce can still maintain such growth, which is enough to illustrate its development potential.

Even though the cross-border e-commerce industry was hit by the "cold wind" of the market last year, and sellers were generally "cold", and some were even pressed to the ground, they still continued to be optimistic about the cross-border e-commerce industry. Previously, customs statistics showed that since 2017, the scale of China's cross-border e-commerce has increased nearly 10 times in 5 years. This growth rate is hard to find in many industries today.

In the year of the Great Cold, most industries were affected and setbacks were inevitable, but the "money" prospects of cross-border e-commerce remained unchanged. Buffett once said, "I am greedy when others are fearful." Therefore, when most people were scared off by the crisis presented by the market, some people with a keen sense of the market went against the trend.

Since the account blocking wave in 2021, the cross-border e-commerce industry has been relatively depressed. In February 2022, the proportion of Chinese sellers on Amazon rapidly dropped to 40%. However, starting in March, Chinese sellers began to gradually return, and their proportion increased month by month. By December, it had risen to 45%, which was the same as the previous peak data.

This really proves the saying: "After traveling for half a lifetime, searching for a long time, I finally found that cross-border e-commerce is the best."

Especially since domestic epidemic restrictions were relaxed at the end of last year and the economy recovered rapidly, it has given cross-border e-commerce sellers more confidence.

A seller who had been working alone said at the beginning of this year that he wanted to set up a cross-border e-commerce team of more than 10 people in Shenzhen after the new year. In fact, after recent contacts with sellers, Yien found that there are many people who want to make a big move this year like this seller, and they also show sufficient confidence in this year's cross-border e-commerce market.

Just like Tik Tok has allowed many people to accumulate wealth quickly regardless of educational qualifications, cross-border e-commerce has also allowed many ordinary people to realize their "dream of getting rich quickly". Therefore, even if the industry is temporarily in trouble, most people still have high expectations for this industry, even if they have lost millions.

Previously, a post-95s seller shared his entrepreneurial story and said that he had worked on Amazon for two years and was in debt of 2 million yuan, but he still had high expectations for this industry. Even though he only had 5,000 yuan left after paying off the supplier's payment, he was still very optimistic. Now he has adjusted his strategy based on the experience he has learned, such as shrinking the battle line and reducing staff, and continues to move forward on the road to going overseas.

However, facing the cross-border e-commerce market where crises coexist, those who are already eager to try at the starting line can't help but consider a question: whether to find a partner to go with you.

Someone was cheated out of 1 million yuan. Be cautious when partnering with others

At the beginning of this year, a seller with an annual turnover of about 8 million said that he wanted to find a partner after the new year. As he currently lacks funds to expand production capacity, he hopes to find a factory to cooperate with and adopt an integrated industrial and trade development model.

In fact, there are many discussions about "partners" in the cross-border circle, and we often see people sharing their partnership experiences, or looking for partners like the sellers mentioned above.

The advantages of "partnership" are obvious. First, there is strength in numbers, not only in terms of manpower, but also in terms of wisdom, financial resources, ideas, and resources. One more person means more strength. Individuals have limited abilities, and it is easy for one person to be alone. Secondly, the ecosystem alliance, for example, many factories are good at making products, but know little about operations and marketing. You can find someone who knows how to operate in the ecosystem and hand over these tasks to him. Thirdly, risks are shared.

This is the reason why people across borders look for partners.

Of course, partnerships also have disadvantages. For example, when faced with major decisions, it is easy to have disagreements due to different opinions, and it is easy to fight for power for the sake of interests. In addition, when the two sides are out of step, it is easy to have conflicts, and it is easy to form factions and act independently.

These drawbacks also lead many people who have been working together to the end of "breaking up". In the end, friends, relatives, classmates, colleagues, or people with similar aspirations become enemies. It is not uncommon for such a situation to start a partnership as friends and end it as enemies.

In January this year , a seller shared how he and his partner broke up. The seller's partner was his relative, who provided technology, while the seller provided capital and technology, with a 50-50 profit split. However, after half a year of cooperation, the partnership ended in a quarrel.

There are two main reasons for the breakup of the two:

1. The two parties work at different paces. One party strictly goes to work and leaves work on time, actively studies and works, while the other party hopes to have a relaxed and free working atmosphere.

2. Both parties have strong personalities. When they encounter disagreements, they both want the other party to listen to them, and quarrels often break out.

The dissatisfaction accumulated over a long period of time, and finally after another quarrel broke out, both sides tacitly agreed to break up.

There are many such examples. Also in January this year, another seller also expressed his intention to discuss the dissolution of the partnership with his partner after more than two years of cooperation. From his statement, we can see that the reasons that led to the two parties being unable to continue the cooperation include:

1. The two parties could not reach an agreement on the equity distribution plan.

2. The two parties have different opinions on the company's development plan. The seller plans to borrow one million in the name of the company this year to expand existing products and develop new products, but the partner believes that doing so is too risky.

3. The seller believes that the partner can no longer keep up with the company’s development pace.

Starting a business in partnership is a long process, during which you will encounter many difficulties and problems, and there are also many potential risks. If you are not careful, it is easy to break up, and in serious cases, you may even "fight within the same family" or fall into the deep pit woven by your partners, so you must be cautious in choosing your partners.

Not long ago, an operations officer said that he was pulled in by his former colleagues to partner with Amazon, but when he came in, he found that the actual situation was very different from what they had discussed before. They had been clearing out inventory, and the development of new products was nowhere in sight. This year he might have to work two jobs but only get the salary for one.

Some even got cheated out of millions of dollars by their partners. Previously, someone said that as an investor, he invested 1 million yuan in the cooperative operation to prepare two products, but when the goods arrived at the warehouse, something went wrong with the operation and he couldn't contact anyone. Without the ability to operate a high-quality product, he could only watch the goods pile up in the warehouse and had to pay storage fees.

In this way, the story of cooperation eventually turned into an accident. One seller joked: "The most stable cooperative relationship may be a husband-and-wife store."

No matter what, as a cross-border e-commerce seller, whether working alone or in partnership, it will ultimately be based on strong products, so those sellers who are preparing to sprint, in addition to worrying about whether to find a partner, also have to consider product selection.

Sellers are worried about developing new products, some are looking for inspiration in the source of goods

Products are the key to sellers' success in overseas markets, and new product development is an important guarantee for sellers' survival and growth. Nowadays, new technologies are constantly emerging, products are changing with each passing day, and product life cycles are getting shorter and shorter, so the importance of new product development is even more prominent.

Based on this, product development has become the top priority for sellers this year. Regarding product development, a seller in Chengdu came up with a solution: go to the source of goods to find inspiration for new products.

The seller said that although his current profit situation is not bad, the current profit is basically contributed by old products. It is difficult to promote new products and select products. It is difficult to rely solely on product selection software. So he plans to develop in Yiwu, where there are more sources of goods, to find inspiration for new products.

As for the source of goods, I have also briefly introduced it in my previous article. At present, there are more than 100 industrial clusters in China, of which about 80% are distributed in coastal areas, concentrated in Zhejiang, Jiangsu, Guangdong and Shandong provinces.

As we all know, China's 3C electronics industry is located in Guangdong. 90% of China's electronic product factories are located in Shenzhen, Guangzhou and Dongguan. Shenzhen is also known as the world-renowned Chinese electronics capital. Shenzhen's largest electronic product distribution center is Huaqiangbei, which can be said to be the starting point for China's electronic product exports.

Today's well-known cross-border e-commerce giants such as Savi Times, Youkeshu, and Aokee all started in Huaqiangbei.

In addition, SourcingArts has previously introduced several industry belts in detail. For example,

Luggage and bag industry belt:

Baigou Town in Hebei Province is the "Luggage Capital of China", which brings together professional markets for leather goods, luggage accessories, hardware accessories, etc. 150 large-scale enterprises and more than 3,000 individual processing enterprises in Baigou have formed a large-scale production capacity of 150 million bags per year.

Zhejiang Province is the second largest leather bag production province, accounting for a quarter of China's total leather bags. The leather goods industry is one of Zhejiang's traditional industries, with low processing costs and fine workmanship. Pinghu City, Zhejiang Province is also known as the "Chinese Bag Capital".

Lighting industry belt:

Guangdong is the region with the most lighting factories. Zhongshan is known as the lighting capital of China, where more than 80% of lighting is produced. In addition, commercial lighting and light sources in Foshan and Huizhou are also competitive. However, if sellers want to find advanced lighting technologies such as digital lighting products, they need to go to Shenzhen.

Outside of Guangdong Province, many lighting companies in Fujian are also very competitive. They are mainly concentrated in Xiamen, which is famous for its LED chip packaging and high-end LED bulbs.

In addition, many OEM suppliers of international lighting brands are concentrated in Zhejiang Province, Jiangsu Province and Shanghai City, because these places have a higher degree of mechanization, so the price of low-end light sources is more competitive. In addition, most high-end outdoor lighting and special industrial lighting are supplied from here.

Glasses industry belt:

China's largest cluster of eyewear manufacturers is located in Danyang, Jiangsu Province. Danyang produces more than 300 million eyewear lenses annually, accounting for 40% of the global market, making it the world's largest lens production base. Other regions include Ouhai District, Wenzhou, Zhejiang, Yingtan, Jiangxi, Xiamen, Fujian, and Henggang, Shenzhen.

Specifically speaking of sunglasses, factories are mainly concentrated in Taizhou, Wenzhou and Shenzhen . In Taizhou, more sunglasses manufacturers produce plastic frames. Wenzhou mainly produces sunglasses lenses and frames. Shenzhen mainly produces high-end sunglasses.

Home textile and home furnishing industry belt:

Home textiles are mainly produced in Nantong, Jiangsu, curtains in Shaoxing, Zhejiang, carpets in Tianjin, towels in Gaoyang, Hebei, and furniture in Yiwu, Zhejiang.

Shoe Industry Belt:

Guangzhou footwear bases represented by Guangzhou and Dongguan mainly produce mid- to high-end shoes. Zhejiang footwear bases represented by Wenzhou and Taizhou mainly produce mid- to low-end shoes. Western footwear bases represented by Chongqing mainly produce women's shoes. Footwear production bases represented by Quanzhou and Jinjiang in Fujian mainly produce sports shoes.

Children's clothing industry belt:

Zhejiang Huzhou Zhili Town, Guangdong Guangzhou, Foshan, Dongguan, Shandong Qingdao are the three major children's clothing industry bases. Zhili Town occupies 30% of the national children's clothing market share, and 60% to 70% of Taobao children's clothing is produced here; Qingdao Jimo was mainly processed by Japan and South Korea in the early days, so the workmanship is better, especially baby clothes. The denim produced in Guangdong is very good.

Underwear industry belt:

Guangdong Shantou Chaoyang has the largest scale, the most complete industrial chain and the most complete variety of underwear. Guangdong Nanhai Yanbu is the first to enter the second-tier bra market, and conduct market-oriented and regional operations. Guangdong Shenzhen Gongming is the earliest world-renowned brand processing zone, attracting many big brands to embed boards. Guangdong Zhongshan Xiaolan has become the world's largest underwear production base.

In addition, Jinjiang, Fujian, Shenzhen and Shanghai are committed to the export of underwear plates, while Yiwu, Zhejiang has the largest seamless underwear plate.

Specifically from the classification of sexy underwear, it is mainly concentrated in Guanyun County, Lianyungang City, Jiangsu Province. The sexy underwear produced here accounts for more than 60% of the national online sales.

Cosmetics Industry Cluster:

Guangzhou is the largest and most comprehensive cosmetics production base in China. There are also many cosmetics processing factories in Zhuhai, Zhongshan, Dongguan, Huizhou, Shenzhen and other places.

Understanding the domestic source of goods can add a lot of advantages for sellers in the process of going overseas. It is not only conducive to the development of new products, but also has certain price advantages. In recent years, the comprehensive costs of sellers have continued to rise. If the cost of the product side can be reduced, the pressure on sellers will be much less.

Advertising and logistics costs are rising, and the cost of going overseas is becoming increasingly heavy

Rising costs are a problem that sellers have to face. For them, logistics costs and advertising costs are two huge mountains weighing on them.

Amazon is home to the vast majority of Chinese cross-border e-commerce sellers, so every time it raises these two fees, it draws countless complaints from sellers.

Not long ago, sellers complained about the FBA fee increase again. As we all know, Amazon bundles sellers’ sales with FBA. Most shoppers on Amazon are Prime members, and sellers need to use FBA if they want to get the Prime option provided by Amazon. Because without it, it is almost impossible to be competitive on Amazon.

As a result, FBA has changed from a service that sellers can rely on to a service that they hope Amazon will allow them to use. In other words, FBA is not an optional service, but a necessary service. Marketplace Pulse research shows that more than 90% of BS sellers on Amazon use FBA services.

Therefore, when fees rise, sellers can only helplessly allow Amazon to control them.

Data shows that Amazon has increased fulfillment fees by more than 30% since 2020. Although the fee adjustment each time is not large, the accumulated pressure is also heavy.

For example, Amazon first raised its fee to deliver 1 pound of goods by 77 cents on June 1, 2021. Then, on January 18, 2022, it increased it by another 27 cents. And in April of that year, Amazon added a 23-cent fuel and inflation surcharge.

Finally, during the holiday season, fees increased by another 31 cents. Overall, it was up $1.27. Although, after the holiday season, fees will drop, not all product sizes will fall back to pre-holiday levels.

In addition to logistics costs, the rising advertising prices year after year also challenge the mentality of sellers.

Although Amazon's advertising prices remained basically stable in 2022, and even fell slightly compared to 2021, its advertising costs have been on an upward trend in recent years.

Data shows that by the end of 2022, Amazon's advertising business will have annual sales of nearly $40 billion, a 10-fold increase in five years. This also indirectly reflects the rising advertising costs faced by sellers.

Amazon's advertising business has grown faster than Google and Facebook in every quarter for the past three years. For example, Amazon's advertising business grew 25% to $9.5 billion in the third quarter of 2022. In contrast, Google's advertising revenue (including all Google properties and YouTube) only grew 2.5% to $54.4 billion.