Bankruptcy liquidation! A group of cross-border bosses turned back into "workers"

As a group of people have returned to work, the number of sellers selling their stores seems to have increased recently. Due to market demand, the selling price of Amazon accounts has been on a downward trend compared to before.

A wave of cross-border bosses plan to return to the workplace

Recently, a group of cross-border e-commerce bosses plan to return to the workplace, become "workers" again , and look for jobs.

An industry insider said that this week two cross-border friends began to "liquidate" their assets and announced their return to the workplace. Another Shenzhen colleague said that a seller's company in Shenzhen closed down and replaced it with several 70% new e-commerce desktop computers. There was also a former entrepreneur who said that he had been working alone for several years and would go back to work after the New Year.

A cross-border seller said that he interviewed an Amazon operator today. He frankly said that he and his friend had started a business on Amazon before and made a little money. They mainly distributed goods and tested it by self-delivery first. After a few orders were placed, they sent them through FBA. When asked why he didn't do it himself, he replied that the financial pressure of working on Amazon was too great and there was no money to play. The work was too tiring, so it was better to work part-time.

Real feedback hits the pain points of those who work alone. Account closure and profit are the direct reasons why they can't persist. Cross-border practitioner S reported examples around him: two former colleagues, both of whom have been in the industry for more than 5 years, worked on their own Amazon accounts while working last year. At the end of the year, their accounts were closed and they lost all their money. This year they work hard.

Entrepreneurs also often pay attention to the situation of people around them. V, the boss of a cross-border company , said that this year has been a very difficult year . As a startup company, I took a walk around the office yesterday and found a problem: several companies have moved away. I continued to walk around a few floors and found that many people had left, and they all left without office facilities. What does this mean?

Such cases have occurred frequently since the beginning of the year. Industry insiders joked: “It is becoming increasingly difficult to run a business. It only takes a moment to go from being a boss to being an employee!”

Some cross-border bosses are reluctant to go back to work, but looking back on their own experiences, the experience of an Amazon seller resonates with his peers.

The seller said that he started to get in touch with Amazon in 2017, and started working on his own with 30,000 yuan each in 2019. It cost 1,500 yuan to find someone to register a store. At that time, he was particularly grateful to Amazon because of this platform, so we don’t have to live a nine-to-five life and no longer have to endure the pressure from our superiors.

However, in 2021, we were selling goods normally, and the logistics were also going smoothly, but we didn't make a penny. After some calculations, we found that the products with a gross profit of 30% in previous years had a 25% reduction in product profits in 2021. The same price and the same logistics, but the profit was greatly reduced. After reflection, we found that various factors were involved. For example, the withdrawal exchange rate in previous years was 7, but now it has become 6.3; the logistics costs have also soared several times, and we can't ship goods even if they are out of stock; at the same time, the Japanese store runs automatic advertising every day, with more than 30 orders a day. It is calculated that there is a profit, but after withdrawing the money, it is found that it has shrunk significantly. The proportion of advertising expenses on the US station has been tried, but it is not enough to make ends meet.

If you can’t make money selling on Amazon, what’s the point of persisting? This seller said that he doesn’t plan to do it anymore. He has never been so desperate. Even when his store was blocked and his links were complained of infringement, he was still confident.

With endless industry involution, drastically reduced profits, and even losses, some startup bosses have decisively quit and chosen to return to the workplace as wage earners. Most of the bosses who have become wage earners are still looking for jobs in the cross-border industry, and some bosses simply leave the cross-border industry and head straight to the end of the universe - taking the civil service exam, and some bosses have opened restaurants and flower shops.

Even when they cannot make a profit, some bosses still choose to persevere. They are unwilling to see their previous efforts go to waste and still manage their accounts carefully, looking forward to the day when orders explode and they become rich overnight.

Industry insiders believe that those who are not making money but still doing Amazon and cross-border e-commerce should cut their losses in time. One seller said frankly, "I'll speak for this group. They still want to take a gamble."

No matter what, the choice of every entrepreneur deserves respect. At this stage, cross-border bosses are more helpless to become employees! An old seller lamented: " In the first half of last year, Amazon closed some unruly sellers' stores , compliance was put on the agenda, and the industry reshuffle intensified. At this time, many small businesses that followed the trend in the second half of 2020 and the first half of 2021 have lost the motivation to keep moving forward. When the wind passes, the pigs will fall to death ! "

Affected by geopolitics, the current foreign exchange rate has fallen and the price of air shipments has risen. It is still quite difficult for sellers to maintain a certain operating profit.

Euro exchange rate breaks 7, sellers call for price increase again

This week, the US dollar exchange rate hovered between 6.30 and 6.32; the euro exchange rate fluctuated between 7.0 and 7.1, and fell below the 7.0 mark several times, with the lowest yesterday being 6.9861.

The United States and Europe are the main battlefields for domestic cross-border e-commerce sellers. With the depreciation of foreign currencies, small and medium-sized sellers still need to withdraw cash continuously for capital turnover, and exchange losses are inevitable. Sellers can't help but complain:

——"The euro exchange rate has fallen below 7, and tens of thousands of profits have evaporated in an instant."

——"The euro is hovering between 6.99 and 7.01. I miss the previous exchange rate of 7.8 to 7.9."

——"The U.S. dollar has also fallen to 6.31. I've really been overwhelmed by the exchange rate this year."

——"The pound fell, the dollar fell, the euro fell, and I had one more reason to carry the bucket..."

From the first half of 2021 to now, the euro exchange rate has slipped from 7.8 to 7.0. For every 100,000 euros withdrawn by the seller, the seller will incur an exchange loss of RMB 80,000; even for the US dollar, from 6.5 to the current 6.32, for every 100,000 US dollars withdrawn, the seller will face an exchange loss of RMB 18,000.

The exchange rate fluctuates greatly, so it is inevitable to factor it into the cost. A seller said that in order to avoid frequent price adjustments, the company has calculated the selling price based on the US dollar exchange rate of 6.1.

Compared to the US site, sellers in the European market have twice the difficulty.

An old seller on the European site felt deeply: "The Euro exchange rate has fallen below 7. The first leg price dropped from 3 to 5 overnight, and then to 6-7. Incurring such high logistics costs at the beginning of the year is really miserable for an old seller on the European site!"

According to freight forwarders, last week's air delivery prices in Europe were still around 20 yuan/kg, and some even offered 18 yuan/kg. However, as many European countries blocked airspace with Russia, air delivery prices soared this week, with market prices starting with 5, and some directly breaking through the 60 mark, and air delivery prices have increased several times.

In addition to exchange rate and freight factors, the current sales volume of the European site has also been frustrated. Some operations reported that the European site has not been able to place orders recently, with only a few orders a day. These goods were shipped at high freight prices before the New Year, but they had to be sold at low prices after the New Year. However, there were not many orders at low prices. At present, the boss is urging us to deal with the redundant inventory every day, and coupled with the falling exchange rate, the situation is bleak.

Overall, profits on the European site are being squeezed. "With more than 20% tax in Europe, logistics taking about 2 months, and an exchange rate falling to 7, how can profits be maintained?" a seller asked.

But in this context, the price war that started last year is still going on. "Competitors' restocking is on the shelves, and the price is reduced to the break-even price. The sweet days are over again." A seller was helpless. In fact, compared with the current soaring air delivery prices in Europe, some sellers still said that the price war has a greater impact on sellers than the increase in air delivery costs.

Many veteran sellers have already seen through that relying on price wars to start a business is not a good strategy, and the cases of a large number of sellers being purged are enough to prove it. "I talked to many colleagues, and found that many sellers on Amazon really died quietly, many of them died because of price competition and low product value."

Under the current circumstances, calls for price increases have once again arisen among sellers.

"Russia and Ukraine are in conflict, the global exchange rate is falling, and Amazon is still rolling inward. Should they raise prices? Small sellers like us really can't afford it. We have no profits, no orders, and we still have to pay for warehouse rent. ACOS is taking off. Can you please raise prices and let us get some money back?"

There are many voices calling for price increases, and some sellers have already taken action. "Raise prices, or you'll be a living Buddha if you don't. Raise prices while doing activities to stabilize rankings." "Raise prices, you must! But raise them slowly, and give them a small reward after the price increase. If sales don't change, cancel the coupons." Other sellers said that prices are slowly increasing every day.

With the lessons learned last year, most sellers have shifted their focus from sales to profits, and agreeing on sales without talking about profits is just playing rogue.

One seller did some calculations and found that according to the algorithm of "gross profit margin = selling price - 15% commission - Amazon delivery fee - product purchase price - first-leg freight / selling price", his current gross profit margin ranges from 20% to 35%. However, according to this algorithm, many sellers' gross profit margins are only 10%, and after deducting returns, storage fees, advertising fees, etc., there is probably not much left.

The seller said that after gaining a foothold in the category, he would consider further price increases. He said frankly that what you earn is money, not face. "We still need to control costs, save money where we can, increase revenue and reduce expenditure, and never hire a second person for a job that can be done by one person. It is enough to have an office and enough staff to handle all the work. This is when the huge advantage of a small family-run store is reflected. On the contrary, it can survive difficult times and live a comfortable life. Don't be big just for the sake of being big. What you earn is money, not face."

With the intensified competition among seller groups and the uncertain external environment, operating on Amazon is no longer an easy win, and some sellers are gradually retreating with the tide.

Amazon account sales increase, prices fall

Driven by the favorable conditions in 2020, some sellers stockpiled a large number of stores last year. A seller mentioned in a chat that his friend spent 10 million yuan to buy accounts last year. The company has a large number of employees and one person can manage 10. The seller was scared when he heard the news. The reason why the latter bought a large number of stores was that they made money the year before last and wanted to make additional investments, but the results were predictable and not ideal.

The followers who rushed in began to disperse. Recently, messages about accounts being sold have popped up in seller groups. One seller said: "There are indeed quite a lot of people selling stores. Yesterday I accidentally saw two groups selling stores, but they were not professional resellers."

The number of accounts for sale has increased, but the prices are no longer the same. Sellers lamented: "It is unimaginable that a two-year-old Amazon store is priced at 5,000. If it were last year..." Other sellers believe that there is no lowest price for a store, only lower prices. Perhaps the least valuable store in the future will be the platform store.

Taking into account the industry situation, many sellers have not registered new accounts today, and the platform investment managers have begun to actively inquire about sellers' intention to open accounts.

To encourage new sellers to join, Amazon launched a new seller starter package in seven major sites, including the United States, the United Kingdom, France, Germany, Italy, Spain and Japan, starting from March 1, Pacific Time .

According to the project prompts, as long as new sellers release the first ASIN available for purchase after January 1, 2022, they will automatically join the New Seller Entry Gift Pack Program without any manual operation, and can unlock corresponding benefits by completing tasks within 12 months.

After new sellers join, they can enjoy sales rebates of up to $50,000, which is also the biggest benefit of the project. The rebates are issued monthly for brand sales and can be directly deducted from the sales commission of the next month, and the deduction amount will not expire.

Specifically, professional sellers who list their first ASIN for purchase on or after January 1, 2022 and complete Amazon brand registration within 6 months of the ASIN going online can enjoy a 5% refund on the first year or the first $1 million of branded product sales, a $200 discount on Amazon review management tools, and a $100 discount on Amazon brand protection tools;

If you ship your products to an Amazon fulfillment center within 12 months of an ASIN going live, you can enjoy a discount of up to $200 on incoming shipping fees and automatically join the Amazon Logistics New Product Warehousing Discount Program; if you create an ad campaign with no deadline for an ASIN in Amazon Logistics, you can also enjoy a $200 Amazon product promotion ad discount; if you register for an Amazon coupon and publish it within 12 months of an ASIN going live, you can enjoy a $50 Amazon coupon fee discount.

This is real support for new sellers. At present, some sellers have received notification emails about this project and expressed their surprise, “Is there really such a good thing?”

It can be predicted that Amazon's real money plan will encourage a group of sellers to register accounts. Among more than 100 votes on the plan, 52% of sellers said that this gift package is useful for new sellers and they will apply for it.

Whether operating a new store or maintaining profits for an old store, it means that sellers must carefully observe and grasp consumer trends and work hard on products and supply chains.

Bulk purchases continue, fresh-keeping products are hot

Since the outbreak of the COVID-19 pandemic, consumer demand in Europe and the United States has changed significantly. Jungle Scout found that the pandemic has triggered many unique market trends. In early 2020, as the quarantine policy began, consumers were eager to find essential products for home learning, remote work, and cooking and cleaning at home.

Now, two years later, as the epidemic situation improves, Americans have begun planning travel, gatherings and other activities to return to social normalcy, but one popular trend continues - bulk buying.

Consumers' habit of buying in bulk is due to necessity and concerns about future uncertainty. The following categories of products continue to sell well.

1. Emergency Food

Bulk food sales on Amazon grew 13% and revenue grew nearly 10% in early 2022. Two brands of emergency food on Amazon have seen significant revenue growth in the past six months.

One brand of emergency breakfast food has seen revenue grow by nearly 1,000% in the past six months ; another set of emergency food has seen revenue grow by more than 5,000% on Amazon since August 2021.

2. Coffee and related products

As more Americans stop going to the office, they can choose where to live more freely. Compared with before the epidemic , fewer Americans are willing to live in cities now. This means that more consumers will live in large houses in the suburbs, where they need to buy a full set of tableware and other items.

Working from home also means people have more time to cook at home, and going to a cafe to buy coffee in the morning has become making coffee at home. Since March 2020, the coffee category on Amazon has seen an increase in brand, ASIN sales and revenue.

3. Groceries

Amazon's biggest purchase is groceries. In 2021, U.S. food and beverage sales increased, and stable supply is the biggest concern for consumers when buying groceries.

Revenue from bulk, dehydrated, and freeze-dried foods exceeded its early pandemic peak in October 2021 and has been rising steadily since the beginning of 2022. In 2021, revenue from dry goods such as dry pasta, rice, and beans on Amazon was more than 70% higher than in March 2020, with ASINs and brands in the three categories increasing by nearly 30% and 40% respectively.

4. Food storage and preservation products

With bulk grocery purchases still on the rise, it’s no surprise that consumers are looking to preserve what they buy. Overall freezer sales on Amazon more than doubled in 2021, and some pantry storage products have seen sales jump 250-450% since August 2021.

Sales of SMETA freezers have grown by nearly 600% in the past six months, and sales of the Canning Essentials Kit on Amazon have increased by 432%.

Sales of one brand of airtight food storage jars on Amazon have grown 285% in the past six months .

It is worth noting that unit sales in the vacuum sealer category grew by nearly 35%, and there is still a trend of growth in this category. For example, revenue from the Foodsaver vacuum sealer system on Amazon has exploded, growing by more than 5,000% in the last quarter.

As consumers turn their attention to food storage, domestic sellers can seize the opportunity and look at products such as portioned food tool kits, airtight jars, etc. Since the trend of buying in bulk is still here, sellers are also taking advantage of this trend on Amazon in many ways.

For Amazon sellers, bulk buying offers the potential to expand product offerings, and for sellers with relevant supply chain advantages, they can take advantage of this ongoing trend to drive product sales.

At a time when internal competition among sellers on the platform is intensifying, making products with care and increasing one's own profits is the top priority.

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