Capterra's survey pointed out that due to the overall increase in FBA fees, many sellers are currently thinking of escaping Amazon and switching to platforms such as Walmart . In the survey, it is estimated that 99 % of Amazon FBA sellers plan to sell on other platforms by 2023 .
Amazon fees continue to rise, sellers plan to withdraw?
Amazon FBA costs have risen 30% since 2020, and Capterra 's survey noted that 48% of third-party sellers currently using FBA said that their profitability has continued to decline due to continued increases in delivery fees during the holiday peak period .
In addition, the impact of fee increases on sellers at different sales levels is also different : FBA sellers with average monthly sales of US$25,000 or less said they were very affected , while sellers with higher sales were less affected because they have channels such as physical stores and self-operated websites.
Amazon has raised expenses several times this year to reduce losses in recent quarters.
Just before Black Friday , Amazon issued another price increase notice, which was the first time it announced more fees for FBA during the holiday season . Amazon said that starting from January 17, 2023, Amazon's logistics costs will change. Specifically , Amazon Logistics' outbound fees, off-peak storage fees, storage usage surcharges, overage inventory surcharges, and increased removal and disposal fees will be increased in 2023 .
In order to maintain profits, FBA sellers have to take various measures, including raising product prices (54%) , using Fulfilled by Merchant services (52%) , strictly controlling costs ( 50%) , and reducing marketing expenses ( 44%).
Currently, 31% of FBA sellers sell on other e-commerce platforms. However, two-thirds of the FBA sellers interviewed said that they would continue to sell on Amazon in the future, as Amazon still has a very high traffic in the market .
Overall, less than half of the FBA sellers surveyed said the benefits of selling on Amazon outweigh the costs, while more than a third said it’s harder to make money through Amazon now than before.
Many sellers have told Ennet that in order to disperse cost pressure, they are already planning to expand into other platforms, including Walmart, Temu, etc., and are even waiting for the recently launched TikTok Shop US site to open merchant registration .
However, these sellers said that it is impossible to completely abandon Amazon. As the most well-known e-commerce platform overseas, its traffic and user base are far beyond the reach of other platforms. Amazon is still the base camp for cross-border sellers .
Even the big sellers who have been severely affected by the wave of account bans are still deeply dependent on Amazon.
Huakai Yibai: Amazon still accounts for the majority of sales , accounting for about 85%
At the end of November , Huakai Yibai released an investor relations activity record , clearly stating that the company currently adopts a multi-platform business strategy, but Amazon is still the main one, accounting for about 85% , eBay is about 7.2%, and AliExpress is about 4.2%. Although other mainstream e-commerce platforms and emerging e-commerce platforms are also deployed , their revenue share is relatively low.
As for emerging platforms , it will actively pay attention to them and adopt a follow-up strategy , and invest resources at the right time. For example , Huakai Yibai said that it has opened a small number of stores on TikTok , but the number and scale are not large.
According to Huakai Yibai's financial report for the first half of this year, its current sales revenue on Amazon is about 1.545 billion yuan, accounting for 78.53% of its total revenue. The total number of orders for its Amazon store in the first half of the year was 11.4106 million. As of the end of June this year, Huakai Yibai had 729 online stores on Amazon, with 34 new stores added and 11 closed during the period .
Except for Amazon, the company's sales revenue through other third-party platforms accounted for no more than 10% of its operating income from January to June 2022.
Although Huakai Yibai stated that while it is deeply cultivating mainstream platforms such as Amazon, eBay, AliExpress, Cdiscount, and Wish, it is also actively deploying emerging platforms such as Walmart, Mercado Libre, Joom, and Jumia, and there is no dependence on any specific platform, its revenue data reveals that it is highly concentrated on the Amazon platform.
However, when asked " whether the number of Amazon stores will continue to increase in the future ", Huakai Yibai said that the number of stores currently opened on Amazon is sufficient to undertake the company's business, and there are no plans to increase the number of stores significantly for the time being.
Big sellers are setting up independent websites, but growth still depends on Amazon
Last year, affected by the Amazon ban, many cross-border sellers, including Anker Innovations, suffered a setback in business and saw a significant drop in profits. As a result, these sellers began to deploy on multiple platforms and focus on building independent sites in order to reduce their dependence on the platforms.
According to their 2021 financial reports, last year the performance of many cross-border sellers on platforms other than Amazon was increasing.
For example, the 2021 financial report of Youkeshu's parent company Tianze Information showed that its revenue on the Walmart platform was nearly 60 million yuan, a year-on-year increase of 141%; and Shopee, which accounted for nearly 11% of its revenue, also achieved revenue of 200 million yuan.
In an announcement, Zebao's parent company, Xinghui Holdings, said that the company is increasing its resource investment in third-party sales platforms such as eBay and Walmart in addition to Amazon , as well as its own independent sites . Data shows that from July to September 2021, Zebao's independent site achieved sales revenue of approximately 39.23 million yuan, an increase of 152% over the same period last year.
The financial report of Tongtuo Technology's parent company Huading Holdings shows that its self-operated website achieved revenue of 50.0586 million yuan in the first half of 2021.
In 2021, the revenue of Leckey's independent site reached 527 million yuan, a year-on-year increase of 89.19%, accounting for 18.35% of the total revenue. The number of buyers on the independent site reached 246,770.
In 2021, Anker Innovations' independent website business sales were 390 million yuan, accounting for 3.13% of total revenue, a year-on-year increase of 83.57%. The previous year, Anker Innovations' independent website revenue was only 210 million yuan.
All of the above data seem to reveal one message: big sellers are treating "Amazon addiction" and are quite effective, but is this really the case?
According to the semi-annual reports released by these big sellers in the first half of this year, their business revenue on Amazon still dominates their overall revenue.
In the first half of this year, Anker Innovations' revenue on Amazon reached 3.24 billion yuan, accounting for 55% of its total revenue; Youkeshu's revenue on Amazon was 110 million yuan, accounting for 32.42%, compared with 30.63% last year; Leckey's revenue on Amazon was 443 million yuan, accounting for 28.93%, the highest among all platforms; Zebo's revenue on Amazon was 316 million yuan, accounting for 48.88% .
Obviously, it is unrealistic for big sellers to escape from Amazon in the short term, as they are still highly dependent on the traffic from this platform.
It's not just about selling well. Previously, a service provider who sells Amazon stores revealed to the editor that the demand for Amazon stores is still very high this year. There are still many cross-border sellers purchasing stores, while the number of sellers selling stores has not increased significantly .
Big sellers are betting on other platforms and independent sites simply to avoid the risk of highly concentrated platforms, but to completely break away from Amazon, the overseas e-commerce giant, is tantamount to cutting off one's own arm in such a sluggish market. Amazon cost Seller |
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