30 million wasted! The big seller made a mistake in making cars

After the account blocking incident, the concept of multi-platform operation has been deeply rooted in people's minds. In addition, due to multiple factors such as the intensification of internal competition this year, profits have declined. Sellers' attention to new markets and potential platforms remains high, hoping to walk on multiple legs and increase revenue windows.

With declining profits and the need for multiple platforms, sellers are becoming more dependent on data, hoping to reduce costs and increase efficiency through the "eye of God". A big seller tried to develop its own ERP, but after several changes of leadership and a cost of 30 million yuan, it still came to nothing. It has become a trend for big sellers in the industry to spend huge sums of money to build their own software, which seems to be caught in a vicious circle.

Profits are falling, sellers are cutting costs to survive

At present, the sellers who were affected by the account suspension last year are still recovering from the aftershocks, and their business conditions are difficult to improve or even continue to deteriorate. The companies involved are busy looking for new business outlets through multiple channels. For example, Tongtuo has increased its sales share on platforms such as eBay, Walmart, AliExpress, and Lazada.

Most sellers are also under pressure. Under the dual influence of the global epidemic and the conflict between Russia and Ukraine, consumption in overseas markets such as Europe and the United States is sluggish, the industry's internal competition has intensified and prices have fallen. In addition, the operating costs of third-party platforms have risen, exchange rate fluctuations, etc., and many sellers have entered a period of declining profits. One seller admitted that this year's sales are okay, but the profit is far less than last year. Similar situations are very common.

The first mobile phone case stock, JMET, is having a particularly hard time. In the first half of this year, JMET achieved revenue of 360 million yuan, a year-on-year increase of 19.75%; but its net profit attributable to the parent company was a loss of 16.382 million yuan, a year-on-year decrease of 205.38%; its non-net profit loss was 36.928 million yuan, a year-on-year decrease of 36925.66%. This is not unrelated to its business changes.

In order to find new windows of opportunity and balance business risks, many sellers are also promoting multi-platform layout. For example, Marketplace Pulse survey data shows that nearly 1,000 new sellers join the Walmart platform every week, which is 4 times higher than before.

On the other hand, under the pressure of reduced profits, sellers have higher requirements for capital utilization. " Learning to save money is the beginning of making real money. " said a seller.

They rely more on tools such as ERP, hoping to gain insights into operating data, reduce unnecessary expenses and increase profits. At the same time, after deploying multiple channels, sellers' business lines have become more complicated. As sellers' businesses change, the need for ERP iteration emerges.

Dama spent 30 million to build its own ERP but failed

Before 2017, the distribution model in the cross-border e-commerce industry was in full swing, and sellers competed for customers through massive SKUs. The first generation of ERP was mainly used to assist in distribution. After 2018, Amazon gradually became the only one to stand out. Advantages such as large platform dividends and low advertising costs attracted a large number of sellers to invest heavily, and logistics was mainly based on efficient FBA. ERP2.0 was born, focusing on serving FBA boutique sellers.

However , after the wave of account bans in 2021, sellers accelerated their multi-platform layout, which also meant handling orders, stocking, inventory transfers, customer service, etc. on different platforms. The characteristics of this cross-border business have prompted ERP to officially enter the 3.0 era - providing sellers with a multi-platform comprehensive management system.

In addition to working on multiple platforms, big sellers with huge business volumes face another problem. Due to different sales markets, channels, and categories, big sellers have very diversified businesses, and conventional ERP cannot meet their personalized needs, so some big sellers roll up their sleeves and prepare to build one themselves.

A large retailer in Shenzhen hired three CTOs (Chief Technology Officers) to develop ERP. However, almost every CTO disagreed with the previous one's architecture after taking office, so they had to start over. Some staff also found that the architecture they had developed was not appropriate because they did not have a clear understanding of the company's business in the early stage, so they updated it again. In total, the team went through four code reconstructions, with a total investment of about 30 million yuan, but ultimately failed to make it work.

Some industry insiders believe that sellers with an annual GMV of more than 300 million will be willing to develop their own ERP tools. And among this large number of people trying, many will fall into the vicious circle of "reinventing the wheel".

70% of the content in the business process of big sellers is the same, and only about 30% of the business is personalized. Therefore, sellers often find that many functions such as APIs for connecting to major platforms and software on the market are duplicated when they are halfway through their R&D. This is a must-have for ERP, so each self-development team can only repeat the "reinventing the wheel" stage.

Building a development team is very expensive. A seller did some calculations and found that to build an ERP, the technical team needs to be equipped with five or six module teams, including product managers, front-end, back-end, and architects. Assuming that two people are recruited for each module, more than a dozen people are needed. To build a system that meets the business needs of big sellers, at least 20 people are needed.

The minimum salary for a technician is 15k, so the annual salary for 10 people is 1.8 million. A team of 20 people is also common, and the salary cost is close to 4 million. If you want to make a mature system, it is difficult to see results without an investment of 20 million a year. Due to the huge investment and long cycle, most sellers give up halfway.

To meet the demand for “customization”, Nextop received nearly 100 million yuan in financing

The reason why self-developed ERP is popular is that the standard SaaS tools on the market cannot meet business needs, and self-built ERP faces the embarrassing situation of high cost and long time ; and the gradually expanding multi-platform business model in the industry also requires tools to support order taking, customer service, etc. Can the sellers' low investment and personalized needs be met at the same time? ERP 3.0 responds to these new needs, and Nextop came into being.

Nextop is a full-link, multi-platform, business-finance integrated supply chain management system that combines ERP and SaaS functions, and can provide sellers with customized personalized services. Specifically, Nextop uniformly develops 70% of the common parts, completing the work of "reinventing the wheel", charging only 1 to 2 programmers, and opening the remaining 30% of personalized needs to sellers for independent development.

Through the SaaS open platform, Nextop opens up its internal data and business process capabilities. Under the premise of ensuring data security, sellers can use the rich http api interfaces it provides to complete the interaction between their own systems and the Nextop system. For example, Nextop defines each data segment such as supply chain, sales logistics, etc. and retains it in the interface, and the specific business is left to the seller to customize. This model is unique in the market.

As a misaligned competitive product, Nextop avoids competition with traditional ERP on the market . Its target customer group is large sellers operating on multiple platforms. The market capacity is only about thousands of users, but this group is undoubtedly the backbone of the cross-border e-commerce industry. While they have a demand for general ERP functions, they also hope to meet their own personalized needs , and Nextop matches these demands.

Solving the rigid demand for "customization" of cross-border companies, Nextop has been recognized by many big sellers in the industry , and its customer base has grown rapidly. One year after its launch, it has 70 users, including some well-known big sellers in the industry who have received investment from Sequoia, IDG and other capitals. Favored by capital, Nextop has recently received nearly 100 million yuan in Pre-A round of financing.

It is understood that Nextop Shenzhen Mingding Technology is headquartered in Shenzhen, with a production and research team of more than 100 people. The product team has an average of more than 5 years of experience in the cross-border e-commerce industry. More than 90% of the members are technical R&D personnel, and product managers are from major companies in the industry such as Global Easybuy and Paton. The core backbone of the team comes from large technology companies such as Tencent and Alibaba, and has been deeply engaged in the full-process supply chain business for more than ten years.

As cross-border e-commerce has developed to date, multi-platform operations have become the mainstream and will remain the dominant model in the industry in the next 3 to 5 years. Facing the personalized needs in operations and the business characteristics of the multi-channel model, sellers can leave professional matters to professional teams and devote more energy to improving core competitiveness. Click "Read original text" to learn more about Nextop.

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