The "returnee couple"'s 17-year cross-border journey: from "guaranteed profit as long as goods are shipped" to joining the billion-dollar club!

Song Lei and Mandy, a "returnee couple", have been on a cross-border e-commerce export journey for more than a decade. In their own words, it is "like a bamboo taking root in the ground, waiting for the day when it will be unstoppable!"

At that time, they came into contact with eBay while studying in the UK. In 2005, Many and her husband purchased car sunshades and key chains from China and sold them on eBay in the UK, earning their first pot of gold and becoming the enlightenment of their business.

In 2008, the couple returned to China. They worked during the day and sold goods on eBay at night. Their sales were so good that "as long as the goods were on the shelves, they could make money." The money they earned from the eBay platform alone could support their mortgage. Therefore, in 2012, they made up their minds to quit their jobs and officially started their careers as professional cross-border e-commerce sellers. Due to Song Lei's obsession with cars, the couple chose to sell auto parts. In 2014, the couple founded Shanghai Yinshi Network Technology Co., Ltd., with only three partners at the beginning. Starting from Shanghai, they gradually expanded to Xi'an, Shenzhen and other places.

In order to adapt to the company's rapid development, at the beginning of 2019, the Shanghai headquarters moved to Kaihe Sunshine Plaza, with an office area of ​​over 1,000 square meters. In the same year, the storage area of ​​Tieshan Warehouse expanded to nearly 3,000 square meters.

In 2021, Yinshi Technology's turnover reached 100 million yuan, with sales growth exceeding 100%. eBay platform contributed the majority of revenue, with sales reaching more than 60 million yuan. They expect sales to continue to rise in 2022.

The 17- year cross-border development journey of the "returnee couple" seems to be glorious, but it is by no means smooth sailing. Why can they keep up with the ever-changing industry environment and stand out in the sales of auto parts?

Hitting the right vantage point, "As long as the goods are on the shelves, you can make money"

Yinshi Technology mainly deals in three categories: auto parts, auto tools and auto supplies. Now, Yinshi Technology can be described as a big seller of auto parts on eBay .

Among many categories, they only deal in auto parts and stick to it for more than ten years. This is obviously a typical example of interest driving business growth.

Cars are Song Lei's favorite. During school years, he often bought and sold cars on second-hand websites. When his interest was high, he stored three second-hand cars at home. After buying a car home, he would definitely "dress it up" and buy all the necessary car accessories and supplies, such as car sun visors, car keys, CD players, etc.

Precisely because of his passion and understanding of cars, the more Song Lei dug deeper, the more he discovered that the world of auto parts is big enough. Any further subdivided category or style demand means huge business potential, and every subdivided field is worth exploring in detail. This made him and Mandy decide to devote all their energy to cultivating this vertical category.

"Around 2010, auto parts were selling really well. It was a sure profit as long as we had the goods to ship. The most popular products at the time were spare tire covers and trunk mats. We almost filled up an entire room in our house with them!" At that time, Mandy was responsible for handling mails, Song Lei did advertising work, and then the two of them worked on product packaging together. Their days were busy and fulfilling!

There is no doubt that "guaranteed profit as long as goods are shipped" is inseparable from three factors: platform, category and the development advantages of cross-border e-commerce.

Song Lei believes that selling auto parts on eBay is the best choice.

First of all, the functions of eBay's backend are very "friendly" to auto parts sellers. For example, the compatibility list is like a database that can accurately match car models in various countries. Compared with other platforms, eBay has done better in overall compatibility and value. Matching car models from various countries is not easy. eBay has made this its own specialty, which has become an important reason for its continued leadership in the auto parts field.

Because of this , eBay has become the preferred platform for overseas consumers to purchase auto parts. It is reported that eBay's annual sales of auto parts exceed 10 billion US dollars , with a huge consumer group, a full range of car models, covering a total of 500,000 car models, and convenient, fast and accurate parts search and matching tools to help consumers search and purchase spare parts that are compatible with their vehicles.

The platform sells one car every three minutes , 120 car exteriors and interiors, 40 headlight assemblies and bulbs, 30 wheels, tires and accessories, 30 sets of brake products , etc. Data at the end of 2020 showed that for top auto parts sellers, the repurchase rate of buyers on the eBay platform can reach more than 80%.

“eBay attaches great importance to the auto parts category and has established an eBay account that focuses on the sales of cars and auto parts.   Motors, not only treat auto parts as a category, but also treat it as a website." In Song Lei's view, the eBay platform has excellent genes for auto parts, and they can no longer do without eBay.

The auto parts category itself has also been in a period of traffic dividends.

The automotive aftermarket contains a trillion-dollar business opportunity. With the continuous increase in overseas online market share, the online market for auto and motorcycle aftermarket is also growing rapidly. According to statistics from eMarketer, a well-known North American research company , the online sales growth rate of auto parts categories reached 14% in 2021, and the total transaction volume of the online market reached more than 60 billion US dollars, an increase of nearly 50% from 40 billion US dollars in 2018.

According to the Auto Care Association Factbook 2019, the global auto aftermarket is worth more than 1.4 trillion US dollars! In developed countries such as Europe and the United States, there are huge opportunities in the auto parts category. For example, the United States has 290 million cars with an average age of 12 years, and Europe has about 340 million cars with an average age of 11.5 years. This has spawned a huge sales market for auto parts and supplies.

In summary, whether it is the surge in online shopping demand for auto parts caused by the epidemic, or the rise of auto parts through cross-border e-commerce platforms such as eBay, the auto parts category is a booming market no matter how you look at it.

To create a hit auto parts product, it is essential to know consumers’ preferences

From the perspective of the auto parts market, this track does still have a lot of room for development . At the same time, it is certain that the extremely tempting auto parts category cake is not as easy to chew as imagined.

Compared with other categories, auto parts are relatively more professional. As products that match the whole vehicle, auto parts have very strict quality and precision requirements . At the same time, the auto parts category has many subcategories, and each field covers a large number of products. Novice sellers are often limited by their own level and find it difficult to start in the auto parts category.

However, Song Lei has his own successful strategy.

The first thing is to make good use of the resources provided by the platform. " eBay will regularly share with us the latest overseas market demands, category demands, buyer portraits, vehicle model data, etc., and will also summarize the complete chain of development and operations . These can help us better operate the auto parts category ."

"Practicing internal skills" is also crucial. He advocates intensive cultivation and will break down the automotive peripherals into small blocks. Each employee only needs to be responsible for one section and then conduct in-depth research in this section. "Take the automotive parts category as an example. There are products such as automotive glass and automotive tire parts. Each employee needs to dig deep into the products under each category."

In terms of the division of labor in the development team, the development manager is responsible for long-term observation and finding some potential blue ocean products, the senior or middle-level managers decide the product development direction, and the product development related personnel are responsible for execution. Song Lei feels that the company's current intensive cultivation approach still has room for improvement. Next, he will try his best to let several employees be responsible for one listing, so that the product can be explored more deeply and finely.

The advantage of taking deep roots in a field is obvious. It not only ensures that the company can go deeper and deeper in each sub-field, constantly innovate, and eventually accumulate more and more core competitiveness. At the same time, it also allows Song Lei and others to accumulate rich professional knowledge reserves, and in turn, use this knowledge accumulation to provide positive feedback on product innovation and development direction.

Thanks to its rich knowledge reserves of auto parts, during the product development process, 30% of the products are developed based on Google Trends or category data analysis, and most of them rely on experience.

But when he first started selling auto parts, he was not as comfortable as he is now.

"In the early days, we mainly focused on the auto parts market, and found that it was difficult to sell hundreds or thousands of auto parts a day, so for a long time I felt that there were no hot-selling products in the auto parts category." As the product line expanded to automotive supplies, Song Lei discovered that the overseas online market demand for automotive supplies such as steering wheel covers and floor mats was actually very high. It was basically no problem to sell two to three thousand orders a month, and the operation was also simpler.

Behind the transformation of auto parts from "difficult" to "very easy" to produce hit products, the acumen of businessmen is a prerequisite, and it is essential to keep up with the development of the times and be familiar with consumer preferences.

Consumers' expectations for auto parts are constantly changing, and the auto parts category is also constantly making new market cuts and category segments based on changes in consumer preferences.

Judging from the changes and trends in the categories and product values ​​of exported products in the past 10 years, China's export categories have gradually shifted from general parts/body accessories to vehicle parts, replacement parts and modified parts, among which headlight assemblies, bumpers and shock absorbers are currently the most important export categories. It is worth noting that the average unit price of exported products has also doubled in the past five years; the quality of Chinese auto parts products has also been improving year by year, and the buyer complaint rate in 2021 has dropped by more than half compared to 2020.

From the perspective of export regions in the past 10 years, Chinese auto parts brands have exported to more than 200 countries and markets through eBay, with an average of more than 70 countries. The United States is still the main export destination because the United States has the largest number of cars, followed by the United Kingdom, Germany and Australia. Spain also has more than 27 million cars, and its growth potential is huge.

Due to different markets, consumers' demands for auto parts are naturally different.

For Song Lei, in the North American market, auto parts , trailer supplies , RV supplies , etc. have high sales . This is mainly because North Americans have a large number of cars, and auto parts have always been a rigid demand product . Because labor costs are very expensive, many car owners will replace spare parts, repair and do daily maintenance by themselves. They are also keen on DIY. Even pickup trucks will be "revamped " to make them look particularly cool on the street. In addition, the vast territory of North America also makes local people very fond of using trailer or RV supplies.

In the European market, car accessories and lamps will sell better . It is worth noting that many seemingly inconspicuous car accessories also have their market and can be sold at a good price. Finally, in the Australian market, hardware and repair tools will be more popular because of the prevalence of DIY.

Three elements of future competition : service upgrade, product differentiation and high cost performance

In the process of operating a store, sellers will face various development constraints, among which infringement is particularly destructive.

Data shows that bumpers, barcode readers, headlights, shock absorbers, control panels, etc. are the hardest hit areas for infringement in the auto parts category. It is reported that many sellers will use words such as "OE", "Original", "Genuine" without the authorization of the vehicle manufacturer , and use pictures with the vehicle manufacturer's logo or "OE" and "Genuine"; and mistakenly believe that adding "Fit for" to the product's compatible car model in the title or description will solve the problem; but in fact, Fit for can only help sellers avoid being mistakenly killed. Whether there is infringement is more critical to whether the seller's published pictures, descriptions, product design and appearance are infringing.

Image source: eBay

Song Lei has tasted the "bitter fruit" of infringement.

A few days before Christmas in 2013, Song Lei’s store was accused of infringing products, which resulted in his PayPal account being locked. Song Lei immediately conducted a comprehensive inspection and removed all the infringing products from the store. However, with the belief that he could not break his promise, he still insisted on shipping the products and took all the losses himself.

After this incident and his deeper understanding of the auto parts category, Song Lei realized the importance of operating in compliance with regulations and breaking away from internal competition .

"The market competition in the auto parts category is intensifying. In addition , consumers have higher requirements for merchants. Not only do they require logistics to be as fast as possible, but they also require products to be highly cost-effective and differentiated. Therefore , the companies that can continue to develop in the future must be companies that work hard. If you are still in the stage of reselling, it will become increasingly difficult to survive on the eBay platform . " At this time, it is particularly important to adapt to the development cycle of the entire industry and then adjust the company's development direction according to development trends.

Insight into consumer needs is the core of all businesses. Although on the surface, consumer needs are becoming increasingly complex and diverse, and consumption trends vary greatly from country to country, their pursuit of beauty, high cost-effectiveness, more content, and individual needs remain unchanged. Therefore, Song Lei believes that when the technical level of the industry is close to convergence , the key to future competition lies in three aspects: product differentiation, service upgrades, and high cost-effectiveness.

As a result, Song Lei carried out drastic reforms in the company one after another .

In terms of product differentiation, in addition to the high investment from the R&D end, it is also inseparable from the vitality of the enterprise itself.

To this end, Yinshi Technology has made a lot of efforts, one of which is to try its best to inspire the greatest advantages of each employee.

First, he assigns employees to appropriate positions based on their individual strengths. For example, for automotive products, Song Lei would assign female colleagues to take charge, because girls are more sensitive to furry items such as seat cushions and are more adept at selling them.

Secondly, encourage employees to innovate, give them space to innovate and material rewards. Song Lei believes that innovation cannot be forced, and compared with the length of time spent, choice and direction are actually more important, so Yinshi Technology now implements a two-day weekend system, and encourages employees to innovate boldly, stipulating that every time a company employee innovates a new product, he will immediately give a reward of 5,000 yuan.

It is worth noting that not every product needs to be completely innovative. Micro-innovation is also an important means to increase sales. In the current situation of product homogeneity, as long as sellers adjust and upgrade certain functions of their products, consumer favorability will increase significantly. At this time, consumers are also willing to pay a higher price to buy products.

After the product is innovative, packaging is also very important. For innovative products, from packaging design to corporate logo to the entire delivery plan, Yinshi Technology will strive to be more professional and perfect, because products are the foundation of all development. Products come first and then brands, and brands must serve products.

In order to provide better product services and make products more cost-effective, Yinshi Technology has set up 13 overseas warehouses in 8 countries since 2019. At present, about 2/3 of Yinshi Technology's orders come from overseas warehouses. Song Lei believes that direct shipping is still worth continuing in the future, but overseas warehouses are a topic that sellers must pay attention to.

The promotion of overseas warehousing business has not only improved the quality and efficiency of logistics distribution, but also greatly improved the adaptability of cross-border logistics, opening the door to the international market for heavy, large or special-shaped goods such as auto parts. At the same time, Chinese auto parts sellers with local delivery capabilities can quickly respond to consumer needs, improve after-sales services such as returns, exchanges and repairs, and effectively improve service quality and buyer experience.

At the same time, Song Lei also set up an information technology department to independently develop ERP order processing systems , MRM customer service systems , WMS warehousing systems , OLM overseas warehouse management systems, etc. Big data helps smart retail . It is reported that Yinshi Technology spends about 100 million yuan on information technology each year .

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