Post-95s sold out their accounts! They once sold 800 million yuan a year on Amazon

Affected by Amazon’s account ban wave, how are the sellers who had more than 200 accounts banned last year doing now?

Last June, Tian Wei, a post-95s Amazon seller, had more than 200 accounts blocked for manipulating reviews and violating platform policies. In July, he prepared five accounts to continue operating the original categories. After selling his house and car to keep the company alive, he completely withdrew from the original categories 10 months later.

In April this year , Tian Wei had no choice but to sell all his accounts, and the size of his Shenzhen company dropped sharply from 300 people at its peak to 5 people.

However, as a young cross-border e-commerce boss, Tian Wei did not give up the field he was familiar with, but started from a completely new category and "started all over again" on Amazon. However, this time, Tian Wei seemed to have a deeper understanding of cross-border e-commerce business.

Hitting the bottom! Shenzhen post-95s seller sells out all Amazon accounts

On the last day of 2021, Ennet published an article titled "An account with annual sales of 800 million was blocked! Shenzhen sellers rushed into Amazon headquarters..." In the article, Shenzhen seller Tian Wei had more than 200 Amazon accounts blocked in June last year, and his store had funds deducted as high as 200 million yuan.

Tian Wei runs an adult products business and has his own factory. Riding on the boom of cross-border e-commerce, his company developed rapidly in 2018 and 2019, with sales reaching 800 million yuan in 2019. The company in Shenzhen responsible for e-commerce operations and the supply chain in Zhejiang have a total of more than 700 employees.

In June 2021, all accounts of Tian Wei's company were banned by Amazon overnight due to violation of platform policies, and the brand was also implicated. In order to save himself, Tian Wei rushed into Amazon's Seattle headquarters, but to no avail. Later, he sold three houses and a car in Shenzhen to keep the company alive.

In July, Tian Wei, who lost all his accounts, prepared five Amazon accounts to continue operating the adult products category, but it did not work and the company's business went from bad to worse. Many problems put Tian Wei in a difficult situation.

First, the prices of raw materials for the Zhejiang factory that supplies Tianwei soared. Under the epidemic, the raw materials shipped from the United States were hit by the rise in sea freight prices . Later, affected by the domestic epidemic, the factory could not ship normally, the production capacity was greatly reduced, and the supply chain cost rose sharply.

Secondly, since it is no longer possible to perform operations such as false orders and false reviews, it is difficult to improve the ranking of the company's new account and it is difficult to obtain traffic. Due to the special category, the platform has certain restrictions on advertising, so the operation of the new account has not improved for a long time.

Finally, the new account still requires human and financial resources to operate during the operation period. After Amazon blocked the account, the 200 million yuan of funds in Tian Wei’s account were still frozen, and there were problems with capital turnover, which was a fatal blow to the company.

At the beginning of this year, Shenzhen was hit by the epidemic again. At that time, Tian Wei was unable to return to Shenzhen from his hometown in Hunan. In March, he had a hunch that the five Amazon accounts he was operating were not in good condition. The actual situation was there, and the order data was also visualized, so the subsequent situation could be imagined. Tian Wei vaguely felt that on the Amazon platform, his business might not be able to achieve his goal.

So, Tian Wei in his hometown tried hard to find a way to save the company. After selling the house and car in Shenzhen, Tian Wei planned to sell the property he had purchased in his hometown in Hunan. In his own words, although the property in his hometown is not worth a lot of money, it can help the company survive for a while.

Tian Wei sold houses to supplement the company's finances while trying to open up other sales channels to increase orders. Hearing from colleagues that live streaming sales, like in China, also has a certain market abroad, Tian Wei, who has no English foundation, did not hesitate too much and plunged into this track and opened an account for live streaming.

The editor tentatively asked him: "Can foreign consumers understand the English you speak?" Tian Wei said: "Foreigners can still understand simple Chinese-style English. In the early stage, we should accumulate popularity in the live broadcast room. How can we get orders from the beginning?"

Accounts need to be accumulated slowly, as do traffic and orders. After a few days of live streaming, Tian Wei still had nothing to show for it. This channel cannot achieve instant success and quickly make up for the decline in Amazon orders.

When Tian Wei was trying to save the company at home, many of his employees in Shenzhen had not yet finished their Spring Festival holiday. To a certain extent, the company's accounts were also poorly managed. These multiple reasons combined became "the last straw that broke the camel's back."

Later, when the epidemic situation improved, Tian Wei returned to the Shenzhen company and began to plan for the next step. Finally, he decided to close all Amazon accounts.

After struggling for about nine months, Tian found it difficult to sustain the company's five new accounts for adult purposes. In April this year, he sold all his Amazon accounts in one go, determined to withdraw completely from the adult purpose business.

According to Tian Wei, the five Amazon accounts were sold for a total of more than 20,000 yuan. After selling all the Amazon accounts, Tian Wei's company's Amazon business had basically stopped in April. At this time, it was only about 10 months since all of his company's accounts were blocked by Amazon.

Under the wave of Amazon account bans, Tian Wei’s company fell to the bottom in just 10 months.

The number of employees in Shenzhen company dropped from more than 300 to 5

In fact, since his account was blocked in June, Tian Wei's company has been shrinking. At the beginning of this year, Tian Wei's e-commerce operations in Shenzhen were reduced to more than 30 people , mainly responsible for Amazon and domestic Pinduoduo business.

After the Amazon account was sold in April this year , the company naturally did not have so much manpower demand. Tian Wei clearly remembers April 23rd. On that day, all employees who wanted to stay could choose to stay. For those who did not want to stay, the company compensated them according to the labor law.

At the end of April, only five people were left in the Shenzhen company responsible for e-commerce operations. The company had more than 300 people at its peak, but now it has been drastically reduced to five people, who are mainly responsible for the business of Pinduoduo, a domestic e-commerce company.

What happened to Tian Wei and his company may be a microcosm of many sellers whose accounts were blocked last year. With their accounts blocked and their funds frozen, these sellers' companies are struggling to survive. Some companies have reduced their scale by improving labor efficiency and streamlining products. After a few months or half a year, the companies have lost their ability to turn over funds and are unable to sustain themselves for a long time.

At present, Tian Wei still has 200 million yuan in funds in more than 200 accounts that have been blocked by Amazon . Speaking of this 200 million yuan, Tian Wei was very helpless: "Because of the illegal order-brushing, my account has now been judged by Amazon as a second-time order-brushing. If it is a first-time order-brushing, the Amazon platform will freeze the funds for 90 days, and the subsequent funds will be returned slowly. If it is a second-time order-brushing, your funds will basically not be returned, which is equivalent to being sentenced to death."

Tian Wei said that because he was waiting for the funds in the account to solve the company's urgent needs, he consulted lawyers and some colleagues, and the answers he got were: the 200 million yuan of funds could basically not be recovered. The loss can only be borne by himself.

The situation is the same for Tian Wei's colleagues who had their accounts blocked like him. Nearly a year has passed, and most of the sellers' accounts blocked by Amazon have not yet been unblocked, and the funds in the accounts have not been recovered.

At present, Tian Wei has not seen any cases of unfreezing accounts and funds in the same industry. Tian Wei said that everyone is anxious to get back the money in their accounts, but everyone has inquired about the cost of the lawsuit. One account will cost about 100,000 yuan. If there are more than 200 accounts, this is a considerable amount of money. The key is that the lawyer in charge of the lawsuit cannot guarantee that your account can be unblocked and the funds can be unfrozen. In the case of no hope of unblocking, who is willing to pay an extra fee?

When asked about the possibility that the funds may never be recovered, Tian Wei was not as resentful as one might imagine. He said that life is full of twists and turns, and there are always gains and losses in doing business, just like playing a game, you have to be able to afford it since you have entered the game. When faced with facts that cannot be changed, you have to accept them and then work hard to change them.

At present, Tian Wei is also constantly seeking changes. After selling all his Amazon accounts, he did not give up his familiar field. Instead, he moved his Amazon operations from Shenzhen to Humen, where he continued his cross-border e-commerce business. But this time, he made a big change.

Changing categories and returning to Amazon

Adult products are the hardest hit by account suspensions. After the incident, many factories and merchants such as Tian Wei sought ways to survive. Considering the special nature of the original categories that were difficult to promote, some sellers decisively changed categories. Tian Wei continued to struggle in this category for more than half a year, but still had no chance of improvement. He had no choice but to give up selling adult products on Amazon and eventually joined the army of people who changed categories.

At present, Tian Wei's new company near Humen Wanda has been open for less than a month, and the team building is still in progress. Taking advantage of Humen's supply chain, Tian Wei's company has set its main categories as 3C, clothing and daily necessities, and still ships through FBA.

Compared with the previous focus on adult products, the "grocery store" opened by Tian Wei's company is obviously a distribution model. In the context of the industry advocating the boutique model, this change seems to be a step backward. But Tian Wei doesn't care. He frankly said that he is now a porter.

The Humen company currently has 10 accounts, with two or three accounts in each category, to do early category and product testing. "In the past, we sold high-quality products, but now we sell them in bulk. There are many products in one store, and new products are added every day. If a product performs well, we will advertise it."

Many people in the industry believe that the distribution model is just piling up product categories, which is large but not refined. Companies that do distribution will be labeled as "unprogressive" to some extent, and even distribution operations are inferior to boutique operations. The distribution model is gradually declining and seems to be outdated.

Tian Wei does not deny the value of the boutique model. He knows that there is a certain threshold to making boutique products. When the seller has an advantage in the corresponding category, or a powerful seller has mastered the core technology of the product and can sell it exclusively, it is natural to go the boutique route, and the product will even form a brand premium. However, if it is just a copycat without technical barriers, it is difficult for the product to have a real moat, and it is difficult to avoid being imitated or even surpassed.

The positioning of high-quality products is relatively high. In Tian Wei's opinion, for new sellers who have just entered the industry, or sellers who do not have huge funds and technology, distributing goods is a more practical thing.

"Small sellers who have just entered the industry don't know which products are easy to sell. Anyway, they can always get orders after I put the products on the shelves. One account can get seven or eight orders or even ten orders a day. With more accounts, the total shipment volume is also good. Once you have one or two hot-selling products, you can continue to put such products on the shelves. This is also the model abroad. You say that spreading products is outdated? It's not that fast, unless the sellers are already very competitive."

However, Tian Wei is also very clear that the distribution model can only make a little money, and it is difficult to make big money. The current category of products he is working on has significantly lower profits than the previous adult products, and he can only make 10 or 20 to 30 yuan per order.

For a seller who sells goods in bulk, the biggest risk is that the inventory continues to pile up, taking up a lot of money and eventually overwhelming the company. In this regard, Tian Wei's burden is much lighter.

After becoming famous in the industry, big sellers can often get credit terms from suppliers. "Suppliers will willingly put their goods with you to sell, and big sellers value this. The payment is settled once a month, and the payment is settled only when the products are sold. The unsold ones are left there. It means that the goods are placed with me first, and the payment is settled only when they are sold, and then the customer's money is given to him, which means that I make the money in the middle." Tian Wei also follows this model.

When a product is selling well, you can prepare some stock for FBA; for products that are not selling well, you can ship them after an order is placed. "Think about it, you put hundreds of products on the shelves every day, and if you put 5 or 10 products on the shelves every day, how much capital do you need? If you place an order only when there is an order, your financial pressure will be very light, and there will be no other costs except labor costs."

In addition to Amazon, Tian Wei's cross-border business is also operating on Alibaba International Station, which are two channels in which he is relatively proficient.

Pay attention to platform rules and stay in the cross-border circle

Tian Wei is a seller who has been educated by the market. After paying a huge price for crossing the red line, he paid more attention to the platform rules and began to operate within the framework of the rules.

About a year ago, Tian Wei’s more than 200 accounts were blocked, mainly because of his large-scale false orders. The accounts only started to explode after the platform took action.

Tian Wei introduced that adult products cannot be advertised directly on Amazon, and can only be implanted through third parties. This type of advertising is expensive and ineffective. After some exploration, most sellers in the same category believe that fake orders are more effective. This operation is very common in the industry, and different merchants only differ in the number of fake orders. Because of this, many such sellers were purged in the account suspension wave.

Now that the category has been changed, Tian Wei has abandoned his original practice of brushing orders.

Taking daily necessities as an example, sellers can increase exposure by placing normal advertisements. Fake orders are neither necessary nor in line with platform regulations, and the cost is high. It costs at least 40-80 yuan to fake an order, and it is more feasible to use this money to place advertisements to attract traffic.

"No matter which platform it is, people who run the platform (have costs), there is no free traffic now, only paid traffic. Just like if you pay to rent a house, I have to pay for it, but if you set up a street stall, there is no rent. Brushing orders is called freeloading, but if you place advertisements, I pay to buy traffic, which is compliant and legal." Compared with dancing on the edge of a knife before, Tianwei Company's current business model is obviously much less risky.

After the account suspension incident, most sellers avoided fake orders. In order to reduce the risk of being hit by a landmine, many companies have completely banned fake orders and started to stick to pure white hat operations. However, compared with the previous wild stage, the operating space for operators is much smaller. Spending money on advertising to boost rankings has become the highlight of operations, and the bidding for advertisements on the platform has risen sharply.

"Everyone is advertising, and the highest bidder goes up. There's no fake orders now, but the traffic pool is so small. If you want to move forward a little, your advertising fees have to be higher than others. There are only a few ad spots on a page. If you want to rank in the top 20 or even higher, a click on an ad will cost at least a few dollars. If it's too low, you won't be able to run it," said Tian Wei.

The current business is very different from the previous one, but Tian Wei adapted quickly. After all, no matter what the category and business model are, profitability is the key. This post-95s seller who has made a big mistake has made many people sigh with emotion, but he still has plenty of time to correct and expand his business.

In the same period last year, there were many adult product sellers whose accounts were blocked like Tian Wei. But even after suffering this heavy blow, they still believed that cross-border business cannot be abandoned, and all they have to think about is how to continue.

Tian Wei also thinks so. He is very optimistic about cross-border e-commerce, which has been a popular industry in recent years and the general trend of cross-border trade in the future. He will continue to stay in the cross-border circle and work hard.

Conclusion

Sellers who were previously caught up in the account suspension wave, from top sellers with annual sales of tens of billions to mid-level sellers with annual sales of hundreds of millions, were all severely damaged after being swept up. Judging from the financial reports of top sellers, the impact of account suspension is still huge. Tian Wei believes that it will take at least one or two years for these big sellers to gradually recover. There are also views in the industry that the "recovery period" of big sellers will be as long as two to three years, or even longer.

In contrast, some smaller companies did not even have a chance to buffer, as their previous investments were wiped out in one click and they had to start from scratch.

In contrast, some smaller companies did not even have a chance to buffer. Their previous investments were wiped out with one click, and they had to start from scratch. For example, Tian Wei's company. Some people were terrified by the platform rectification, while others applauded those who advocated compliance. Regardless of the trigger of the incident, Amazon's iron fist has intimidated the seller community.

Today, many sellers on Amazon say that their profits have fallen and their business is very difficult compared to the previous two years. But outside the circle, the epidemic has impacted many industries, and the cross-border e-commerce industry led by Amazon still has a strong appeal. "Many people around me still think that Amazon makes the most money." said a seller.

The upward development trend of cross-border e-commerce has also instilled confidence in practitioners.

According to data from the General Administration of Customs, China's cross-border e-commerce imports and exports in the first quarter were 434.5 billion yuan, a year-on-year increase of 0.5%, of which exports were 310.4 billion yuan, an increase of 2.6%. Industry-related support policies are also being released. Recently, the Ministry of Commerce, together with relevant departments, has studied policy measures including facilitating cross-border e-commerce export returns and exchanges, which will greatly benefit the development of the industry.

Overall, cross-border e-commerce is still a fertile ground.

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