Amazon has "fallen out of favor", and the investment manager is no longer "arrogant"!

Amazon has fallen out of favor!

This can be seen from the " attitude " of Amazon investment managers towards sellers in the past two years !

In 2021, players' enthusiasm for entering Amazon was unusually high. Around March, news began to spread that the positions of investment managers were full. Because each investment manager has a limited number of admission tickets, a large number of small and medium-sized sellers who were not "favored" complained aggrievedly: the investment managers were too arrogant, and the messages sent out always received no response.

In 2022, the attitude of the investment managers changed drastically, and they began to actively contact the sellers. One seller said that it is almost May now, and there are still two or three investment managers sending him group messages, inviting him to register new stores. Back then, the sellers begged the investment managers to give them places.

Sellers' enthusiasm for Amazon has obviously declined. People eating at the Longjiang Pig's Feet Restaurant at the entrance of the village no longer discuss Amazon, and the atmosphere group at the Starbucks in the shopping mall no longer discusses cross-border e-commerce.

Amazon has "fallen out of favor"! Is this really the case? Industry insiders believe that rather than saying that Amazon is no longer the "darling" of Chinese sellers, it is better to say that Amazon's "abnormal high fever" has begun to cool down and is gradually returning to normal, which is a good thing to a certain extent!

Behind Amazon's "cooling down"

Amazon has gone from "heating up" to "cooling down", and it is easy to guess the important reasons behind it: the epidemic and account blocking!

The sudden outbreak of the epidemic in 2019 caused people to spend more time at home, which led to a surge in online demand. Cross-border e-commerce ushered in a period of rapid development dividends, and one wealth-making myth after another emerged. In addition, service providers in the entire cross-border ecological service chain desperately created momentum, and people from all parties collectively mobilized, whether they were domestic Taobao and Tmall players or big names outside the e-commerce circle, all focused their attention on this track.

However , the so-called bonus is only a temporary imbalance between supply and demand . By the time people adapt to the epidemic, this wave of online shopping will inevitably fade a lot. Just as the "tide recedes", Amazon's unprecedented wave of account bans has come again.

For a time , there was a panic and people's attitude towards Amazon changed 180 degrees. At this time, pessimistic voices emerged one after another.

From the praise when it is "in favor" to the depreciation when it is "out of favor", these two attitudes cannot objectively reflect the real Amazon. For sellers, it is necessary not to be "blindly confident" about the future during the high-speed development period of the industry, and to work hard to "cheer up" themselves during the trough period of the industry.

Is it easy to do business on Amazon? Objectively speaking, the current market environment of cross-border e-commerce is not so good, and the risks are relatively high. In addition, price wars are rampant and the market competition is fierce . Many cross-border sellers are not profitable. The reason why there are still many voices circulating about making money is that service providers need to reap the profits . However, a large number of people and money pouring into the cross-border industry will only make the working environment of cross-border e-commerce worse . At this time, pouring cold water on the entire industry is not a pessimistic expression, but will make the entire industry and start-ups develop more healthily and benignly .

However, Amazon is not as bad as some people say . Many people working in this industry have reaped the benefits in recent years . Those sellers who do not fake orders, seriously study market demand and products and build moats have no time to speak out . Their sales are very good and will continue to be so in the future.

Who is suitable to join Amazon?

Amazon is still worth doing, but you need to be cautious when entering the market. From observation, there are probably three types of people in the market who are most eager to enter the cross-border track: factories, outsiders with extra money looking for projects , and experienced operators. An industry insider, "Running Pharaoh," said that , relatively speaking, factories have the most advantages, followed by players with funds, and finally operators.

First of all, not all factories have their own advantages . Factories with R&D capabilities , cost advantages , or experience in dealing with foreign trade customers will find it easier to survive on platforms such as Amazon .

Insights into user needs and superior products form the foundation for the long-term development of e-commerce. It is completely unreliable to talk about brand and capital without this foundation. Factories with product R&D capabilities mean that they already have excellent "product" genes. If they have credit terms with suppliers, they can avoid the heavy asset situation of Amazon and only need to recruit a few mature operators to " go into battle lightly ."

This also gives some warnings to sellers who currently rely entirely on product selection and purchasing to engage in cross-border business. If they do not consider the real needs of users , their products will not have any competitive advantages, and it will only become more and more difficult in the future.

In addition, if the factory originally supplies overseas customers through traders, it means that they already have a certain understanding of overseas consumers. Now entering the cross-border market is just moving the channel online . If some factories have already set up warehouses overseas, the infrastructure can be reused , which will give them a greater competitive advantage . This is also the reason why Amazon has focused on the Yangtze River Delta in the past two years, because there are a large number of foreign trade factories there.

In addition to factories, players with funds will also have a relative advantage in entering Amazon. As we all know, cross-border e-commerce is a money-burning business. Sufficient funds mean sufficient turnover capacity and time. When accidents occur, it will reduce the risk of cash flow shortage or interruption to a certain extent. However, having funds does not mean that they can sit back and relax. They also need to be moderate and reckless, and be able to explore the market themselves . At the same time , they must have a strong psychological endurance, or be able to endure loneliness .

The cross-border process is long and cumbersome. If the boss does not understand any link, the money will slip away quietly.

It is reported that in 2020, some people invested millions of dollars to enter Amazon, but they have only been doing it for about 2 years and are now considering exiting. This is not an isolated case. Another seller said that even with the help of his peers, he still lost eight figures in recent years due to negligence in management. Fortunately, he has a lot of layout sections and has made profits in other parts, which has avoided a break in the capital chain.

At present, a group of powerful operators are also ready to move . Objectively speaking, operations are indeed very important in the cross-border chain , but without continuous product resources and financial support, even a good cook cannot cook without rice. From the perspective of the platform, in order to allow sellers to truly rely on products, operations will eventually be gradually de-experienced. At the same time, as the market becomes more and more mature, there will be more and more practitioners and experienced operators . Therefore, in the long run, if operators do not have other advantages such as funds, the chances of starting their own businesses will become increasingly slim.

This is also the reason for the emergence of the partnership system. Bringing together product providers, RMB players, and experienced operators will theoretically greatly increase the success rate . However , this is based on the premise that the three parties have like-minded ideas . In real life, many people do not have the ability to form a partnership, because being a partner is more difficult than becoming friends or lovers, especially when you have to share the joys and sorrows to go through the process from 0 to 1.

Whether it is factories, players with funds, operators, or other people, they are all attracted by the development prospects of this industry. When everyone thinks that an industry can make money, basically only those who really understand it can make money. So no matter who enters the market and when, if you want to proceed steadily, you must look at cross-border e-commerce from the essence of doing business, and the starting point of all business is the benefit of consumers.

E-commerce platform

Amazon Platform