The exchange rate is too low! The top seller in the category also "abandoned the account and left"

Is the exchange rate the last straw that breaks the camel's back for cross-border sellers?

Exchange rate fluctuations have always been the focus of attention for cross-border sellers. For sellers who mainly operate in different markets, their joys and sorrows are naturally different. Although sellers in the US market have not had too many worries about exchange rate issues recently, many sellers in the European, British and Japanese markets have been hurt by the falling exchange rates. Coupled with the sluggish sales and other problems, the exchange rate issue has become an important driving force for some sellers to abandon these markets!

Seller: The exchange rate keeps falling, and the Japanese site is really difficult to serve!

First, let’s take a look at the exchange rate on the Japanese site!

Yesterday, a piece of breaking news started a series of screen-sweeping mode. While enjoying the melon, many sellers on the Japanese site did not forget to ask professional questions: Will this have an impact on the Japanese yen exchange rate?

What will be the trend of the Japanese yen exchange rate? Only time will tell. Looking ahead, sellers on the Japanese website have suffered from the exchange rate for a long time!

Since the beginning of this year, the exchange rate of the Japanese site seems to have entered a slump, which has made the sellers' already meager profits even worse:

I took over the Japanese site at the end of last year . The exchange rate was still acceptable then , but now it’s terrible!

The Japanese site has been losing money and has never made any money ...

I haven't done anything yet, but I've already lost half of my money. It's ok that my purchasing power has dropped, but the money is getting less as time goes by.

Based on the experience of the Japanese yen, it seems that it will never come back. In 2019, it was still 7! Now it has almost been cut in half.

A seller on the Japanese site said that when he first chose to do business on the Japanese site, the Japanese customs had not yet implemented reverse calculations, logistics were convenient, and financial pressure was small. After comprehensive analysis, he felt that the competition on the Japanese site would be less than that in the United States and Europe, and it would definitely be very profitable. However, not long after entering the market, the Japanese exchange rate began to fall, and the customs began to implement FBA reverse calculations, which led to a sharp increase in financial pressure and a serious drop in profits. If this continued, he really couldn't hold on.

Many sellers find that Japanese consumers are difficult to serve and have poor traffic.

On the consumer side, many netizens reported that customer stickiness in the Japanese market is indeed very high, but consumers are also indeed difficult to deal with.

"Buyers on the Japanese site are really picky. They basically never give 5-star reviews to products. 3-star reviews are equivalent to good reviews on the Japanese site." Xiao Zhang said that Japanese consumers are particularly "inspired" when it comes to writing negative reviews. They can find fault with a product in all kinds of details, making people feel "addicted" after reading them!

In addition, the traffic of the Japanese site is indeed not high. "The more fatal problem of the Japanese site is that the market is too small. Even if many categories are ranked high, there are only a dozen orders a day." Xiao Li said that coupled with the overall decline in cross-border e-commerce traffic this year, he can't even make money, and is even losing money. Now he has to use the profits of other sites to make up for the deficit in Japan. "I spend the same energy as the United States and other sites, but get the least return. I plan to stop doing the Japanese site after clearing the products this year."

Many sellers have the same idea as Xiao Li, and many of them could not bear the continuous losses and have already withdrawn from the Japanese site, including some top sellers in the category. "Many sellers have fled the Japanese site this year. The top 1 and top 2 in my category have both run away, and they are all old links with more than a thousand comments." said an insider.

The exchange rates in Europe and the UK are also falling! The United States has printed the total amount of money in the past 40 years in just two years

Not only is the Japanese exchange rate falling, but the exchange rates in Europe and the UK are also falling. For a time, sellers started a complaint contest!

When sellers on the Japanese site said sadly that " the Japanese yen has long since given up on itself ", sellers on the European and British sites expressed dissatisfaction:

Europe has always been a difficult place to deal with. It is already difficult for small sellers to survive, and the recent exchange rate between the euro and the pound has been too much.

The poor exchange rate means I get one thousand less commission every month.

Pounds become euros, and euros become dollars. Will the exchange rate still be good?

Does the European station still have a future? When it was 7.5, I thought it would return to 8, so I kept holding on, but the result was...

We are running sites in Europe, Japan and the United States at the same time. Europe and Japan are collapsing, and the United States is curling up. Where is the future?

One seller said that not only is the exchange rate in Europe bad, but what’s worse is that there is a 20% VAT. He also wanted to raise prices to save his life, but as soon as he raised prices, sales dropped, and the situation became even worse.

When it comes to exchange rate issues, many people will think of the United States!

In fact, the economic situation in the United States is not very optimistic.

Russian President Vladimir Putin recently said that the West began to abuse its monopoly in the currency field during the COVID-19 pandemic. The United States printed a total of $5.9 trillion, accounting for 38% of the currency. The amount of money printed in the past two years is almost equal to the total amount in the past 40 years, and the speed is the same. This has already caused a crisis.

Data released by the U.S. Department of Labor on July 7 local time showed that the number of first-time unemployment claims in the United States last week was 235,000, a six-month high. In addition, the Federal Reserve's interest rate hike has reduced the market's demand for labor, and unemployment in the United States may worsen in the future. Americans have also expressed concerns about the future.

As more and more economists predict the possibility of a future U.S. economic recession, the American people are in a state of tension and anxiety, with nearly 80% of them worried about losing their jobs.

What can sellers do to reduce exchange rate losses?

Affected by uncertain factors such as international politics and economy, the foreign exchange market fluctuates frequently, resulting in increased uncertainties in the operations of cross-border sellers.

As we all know, the impact of exchange rate fluctuations on sellers' operating performance is mainly reflected in the price competitiveness of product exports and the level of product gross profit margin. If sellers fail to take effective measures to deal with exchange rate risks, it may have a certain adverse impact on profitability.

A big seller said that in order to lock in costs and guard against foreign exchange market risks, it is necessary for the company to conduct foreign exchange derivative transactions in moderation based on specific circumstances.

The company's foreign exchange derivative transactions are aimed at locking in costs, avoiding and preventing risks such as exchange rates and interest rates. The foreign exchange derivative transactions carried out by the company are all simple foreign exchange derivatives or combinations that are closely related to the underlying business, and such foreign exchange derivatives match the underlying business in terms of variety, scale, direction, and term.

It is reported that the country has also taken many measures to help enterprises cope with exchange rate fluctuations.

First, guide financial institutions to provide more exchange rate risk management products for import and export companies, and help companies, especially foreign trade companies, avoid exchange rate risks and reduce exchange rate hedging costs when risks are controllable.

Second, the handling fees for foreign exchange transactions of some small and medium-sized enterprises will be reduced, which will lower their foreign exchange hedging costs. At the same time, it will also help them reduce the use of foreign exchange hedging margin.

Third, the People’s Bank of China’s branches and commercial banks have carried out targeted publicity and training, and provided some door-to-door services to help companies improve their exchange rate risk management capabilities.

Data from January to April this year showed that the scale of corporate foreign exchange hedging increased by 48% year-on-year, and the number of companies handling exchange rate hedging business for the first time increased by nearly 10,000.