Laid-off Internet employees are targeting cross-border e-commerce, sellers: Don’t “give away your head”

Life for cross-border e-commerce sellers is no longer as comfortable as before.

A few days ago, an industry insider revealed that some companies in Shenzhen Bantian International Center were unable to continue their business, and large trucks often took away furniture. An operator working in the park also noticed this phenomenon: "There are indeed (companies) moving every day, and the furniture under Building C1 has not been absent in the past two days."

People in the industry believe that this year's business challenges are greater, and have begun to adjust their strategies in many ways to "survival of the fittest", but from time to time, outsiders still come to join. Recently, an Internet company laid off employees, and an employee who was "graduated" wanted to venture into the cross-border e-commerce industry, but received many sellers' advice to quit, saying that joining this year is equivalent to "giving away your life".

Is cross-border e-commerce still easy to do in 2022? In fact, it’s not that this industry is not profitable, but it’s not so easy for practitioners to win without doing anything.

Laid-off Internet employees set their sights on cross-border e-commerce , and sellers are trying to persuade them to quit

Recently, a netizen consulted a financial blogger , saying that her husband has been working in the R&D management team of an Internet company. Now the company is laying off employees, and the two want to do cross-border e-commerce together. She hoped that the blogger could provide some advice.

The blogger admitted that he had only been a supplier, such as supplying goods to the Sakata Five Tigers, but had never done cross-border e-commerce and was unable to give professional advice, so he asked industry sellers for some suggestions.

This question accurately hits the inner complaints of the sellers who have been frustrated recently. Everyone expressed their opinions, and the answer can be summed up in three words : "Don't fall into the trap."

Sellers said that the cross-border e-commerce industry has now reached a stage where they have almost eaten their fill and are waiting for others to pay the bill. Competition in the industry is fierce, and unless there is a strong supply chain and capital investment, entering the market is a waste of money. Most of the sellers who entered the market last year lost everything, so don't even think about starting a cross-border e-commerce business in 2022.

It is not easy for experienced sellers, and it is even more difficult for new sellers. One seller told me that cross-border business depends on product selection and operational capabilities. If it is a trading company, it is necessary to find a factory willing to cooperate in the early stage, otherwise the other party will not pay attention to a small order volume; and if you go to a company that integrates industry and trade , it is equivalent to changing your life.

Most sellers believe that now is not a good time to enter the cross-border e-commerce industry; but some people say that there are still opportunities and it is still worth a try.

A seller with similar experience shared his experience: "I have 14 years of IT experience and have been doing cross-border business for 3 years. I still have to make mistakes and be aware of the risks, but overall, it is better than other industries and I can try it." Last year, he had more than a dozen accounts blocked due to a mistake and lost hundreds of thousands of yuan, but he had no choice but to persevere. "I brought many people with me, but almost no one persisted."

For new sellers, it is not difficult to make a little money, but it is not easy to earn tens or even millions a year .

If you really want to try, you should first fully understand the industry, try to do it yourself without hiring people, don't invest all your assets, set a stop loss line, etc. In addition, considering the pressure of the current environment, it is risky for a couple to start a business together. It is recommended to leave one person to continue working to ensure a stable income.

Most sellers in the industry do not agree with Internet people wanting to cross borders and engage in cross-border e-commerce. In their view, the industry bonus period has passed, and now it is very competitive. It is naive for the other party to want to enter the industry without any experience.

In fact, sales and profit growth are not good, and many expenses are rising . Even experienced sellers can't help but wonder what the situation will be like this year.

With costs increasing, will cross-border e-commerce still be easy to do in 2022?

In the three years since the outbreak of the COVID-19 pandemic, the development of e-commerce has been rising first and then falling, which is directly reflected in the turnover and profits of cross-border sellers.

Industry big V "Amazon Wuye" calculated the accounts for his company: April 2022 sales = April 2021 sales x1.4 = April 2020 sales x2 , April 2022 gross profit = April 2021 gross profit = April 2020 gross profit x0.7 . This negative correlation between revenue and profit is alarming, and there are many sellers in similar situations.

A small seller lamented that he made almost no profit in the first half of last year, and his profit in January-March this year was lower than last year. After Easter, competitors started to offer low prices, and if he followed suit, he would not make any profit. If he did not, his ranking would drop rapidly. In the end, the seller did not follow suit, and now his order volume is terrible.

Recently, a number of fee adjustments by Amazon have come into effect, once again increasing the operating pressure on sellers.

At the end of April, Amazon began to charge a 5% fuel fee and inflation surcharge on top of the FBA delivery fee. Sellers can only make two preparations: either cut low-profit SKUs or raise prices. However, when the platform's selling price is low, raising prices means giving up the market.

"The delivery fee increased, so I tentatively raised the price by $1, and then the orders went crazy. My competitors didn't follow suit at all. They thought I was out of stock, and then maintained the original price to trick me," said a seller.

At the same time, some sellers have also received notices from Amazon that they will be charged long-term storage fees. Starting from May 15, Amazon will charge an overage inventory surcharge for products that have been stored in the operation center for 271 to 365 days; if the products in the seller's inventory are still not sold or removed before the evaluation date (15th) of the next month, the seller will need to pay this fee.

The layers of fees are making sellers uneasy, and the platform eats up most of the profits. It may be more difficult to sell goods on Amazon in the second half of the year. Judging from the feedback from sellers, the industry seems to have entered a turning point.

There is a post on Zhihu with over 390,000 views, asking "Is cross-border e-commerce still easy to do after 22 years?"

In one of the most-liked replies, a foreign trade e-commerce practitioner said: “2022 will be the year when cross-border e-commerce will end. Those who have raised funds can still hold on for half a year, but starting in the second half of the year, there will be a lot of negative news, such as layoffs, bankruptcy, and fire sales.”

(Zhihu screenshot)

Some people think this statement is very objective and agree with it, but more people in the industry think this statement is too arbitrary and pessimistic, and there are objections. After all, whether from the year-on-year growth of cross-border e-commerce import and export volume or the increasing number of practitioners, cross-border e-commerce is undoubtedly a sunrise industry.

Take Amazon as an example. Sellers know that this level of competition is not unacceptable compared to domestic e-commerce platforms. "Is Amazon really competitive? There is always a reward for hard work, so it is not competitive. Little do people know that there are too many industries where hard work does not make any splashes." said a seller. Although the industry is competitive, you can still make money.

During the operation process, although there are external environmental shocks such as exchange rate fluctuations and geopolitical conflicts, the government's support policies are constantly being introduced to protect overseas companies.

On April 28, Guangdong Province issued the "Action Plan for Financial Support for Enterprises Affected by the Epidemic and Economic Growth Stabilization in Guangdong", in which one of the key tasks mentioned is to increase financial support for stabilizing foreign trade and foreign investment . This includes improving the ability of financial services to serve foreign trade and foreign investment, comprehensively investigating the financing needs of foreign trade and foreign investment enterprises that are greatly affected by Sino-US trade frictions, Russia-Ukraine conflicts, and the epidemic, strengthening financing docking, and encouraging financial institutions to carry out classified filing and credit work; and increasing support for export credit insurance, improving the exchange rate hedging capabilities of foreign trade enterprises, and increasing cross-border e-commerce financing support.

Cross-border e-commerce is still moving forward, but compared to the easy profits a few years ago, sellers now need to have more additional skills, such as high-quality products and fast supply chain response, in order to achieve considerable profits.

Amazon US

Cross-border e-commerce market