Another platform blocks accounts in batches

Last year, Amazon's account suspension reshuffled the cross-border e-commerce industry, and the performance of many established sellers was affected accordingly. Small and medium-sized cross-border e-commerce companies often faced layoffs, store reductions, and relocations. After Amazon's suspension, many e-commerce platforms also stepped up their inspections of sellers' compliance and eliminated non-compliant market competitors.

Recently, the American home furnishing e-commerce platform Wayfair has started to block accounts again, causing sellers to speculate that the platform will block accounts in batches.

Wayfair platform banned some sellers

Last week, many domestic and foreign sellers on the Wayfair platform said that they had received notifications about the platform suspending their sales accounts, and some platform functions could no longer be used normally.

The content of the notification received by the seller is as follows:

To protect our customers, Wayfair conducts regular monitoring to ensure compliance with Wayfair's Code of Conduct and customer data points, ensuring our supplier partners help create a great customer experience. This email is to inform you that as a result of this monitoring, your Wayfair catalog has been removed from the site and your ability to add products has been disabled.

Among the sellers whose accounts were blocked this time, there are many Chinese sellers. Some sellers said that they did not do anything illegal and had always operated in compliance, but they were inexplicably "caught in the crossfire" this time and are currently appealing. Another seller said: "I have been blocked several times before. Could it be that I will be blocked in batches now?"

As for the reason for the suspension, the seller believes that it may be related to Wayfair's latest supplier guidelines. According to Wayfair's latest global supplier code of conduct, if the seller's promotional information (such as pictures, brand misrepresentation, product details, poor English) is inaccurate, a large number of visually duplicated SKUs are uploaded, and there is a lack of product compliance documents, etc., it may lead to suspension.

In addition, sellers believe that multiple account operations and repeated distribution of goods may also be the reasons for the suspension. In the first quarter of this year, Wayfair sellers were suspended for repeated distribution of goods, failure to follow regulations, and privately contacting buyers to cause complaints . Some sellers were only suspended from selling accounts for a short period of time, but some sellers were permanently suspended and suffered heavy losses. This caused panic among many Wayfair sellers at the time. But then, the suspension incidents gradually subsided.

Wayfair said it has been continuously maintaining and reviewing the sales behavior of various suppliers in real time. If any supplier violates the code of conduct, any other policies, or otherwise prevents other suppliers from obtaining fair business opportunities on Wayfair, they will take corresponding measures against these suppliers' sales accounts, such as temporarily removing products from the shelves, suspending or revoking sales permissions.

As one of the choices for sellers to operate on multiple platforms, Wayfair previously had certain advantages over other platforms in terms of entry conditions and review process, and it has been open to domestic sellers for a short time, making it very attractive. However, after several account closures this year, it must have become inevitable to increase the review intensity.

Many people believe that the account suspensions by platforms such as Amazon, Walmart, Wish, and Wayfair in the past two years may be a major reshuffle of the cross-border e-commerce industry. Sellers who "do not follow the rules" may be eliminated by the market at any time. This is both a market law and an inevitability, and those who remain need to adjust their strategies.

Wayfair made a net profit of $3 billion in three months , but many of its figures declined

Compared with e-commerce platforms such as Amazon and Walmart, there are relatively few Wayfair sellers in China, but the platform is very popular among local consumers in the European and American markets, with more than 10 million monthly active users. It accounts for more than 30% of the US home furnishings e-commerce market, and the market prospects are optimistic.

Figure 2 (Picture from Wayfair official website)

Wayfair is a large vertical home furnishing e-commerce platform in Europe and the United States. Its headquarters is located in Boston, USA. It mainly sells home furnishing products, including home furnishings, furniture, home appliance decorations, lamps, outdoor products, etc. Wayfair also has five major brands, namely Wayfair, ALLMODERN, Joss&Main, BirchLane, and Perigold.

However, due to changes in inflation, buyers' willingness to consume, and consumption habits in Europe and the United States this year, although the platform's performance remained stable overall in the first quarter of 2022, data in many aspects still showed a decline.

In the first quarter of 2022, Wayfair's platform net revenue reached $3 billion, a year-on-year decrease of 13.9% . Net revenue in the U.S. market was $2.5 billion, a year-on-year decrease of 9.9% . International net revenue was relatively small, at $500 million, a year-on-year decrease of 31.4% . Net loss was $319 million . In addition, there was a decline in the number of platform orders and active customers. In the first quarter of this year, its active customers were 25.4 million, a year-on-year decrease of 23.4% . 10.4 million orders were delivered , a year-on-year decrease of 29.0% .

Although Wayfair's number of repeat orders has declined, its good reputation has led to an increase in the proportion of repeat customers . In the first quarter, repeat customers accounted for 77.7% of total orders, compared to 74.5% in the previous year . The average order price also rose from $237 in 2021 to $287.

Regarding the relevant performance, the CEO of the Wayfair platform once said that although multiple macro headwinds are permeating the global economy, consumer health remains relatively strong. Shoppers are still very interested in the home category ... In this dynamic environment , only companies that can act flexibly and balance near-term needs and huge long-term opportunities can succeed, and Wayfair fits this description .

In the US market, not only Wayfair, but also many e-commerce platforms have seen their performance decline due to the overall market impact, and many retailers have also sold at low prices to clear inventory. Amazon, Walmart, etc. have begun to reduce the number of warehouses. However, for the performance expectations for the second quarter of this year, many e-commerce platforms have stated that it may be better than the first quarter, and the occupancy rate of sellers is also expected to increase.

Wayfair also stated that it will continue to expand its market share , especially as supply chain restrictions ease, and will not ignore the huge market opportunities and will focus on restoring its profitability.

This account suspension incident has put pressure on sellers who plan to join the Wayfair platform to a certain extent . However, as far as the current situation is concerned, the platform has only increased its review and supervision efforts, and the review process for sellers to join may take more time. No new problems have arisen in other aspects.

However, sellers who have settled in Wayfair should be aware that after the account is blocked on various platforms, some bad service providers often claim to be able to help sellers solve account problems and save time and money on marketing. In this regard, sellers must be vigilant, take formal channels, and more importantly, maintain compliance operations.

Wayfair

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