Commission based on sales? Sellers: Carry out charity to the end

The golden March and silver April are approaching, and it is the month when cross-border e-commerce companies are recruiting talents in a lavish manner, and the talent flow in the cross-border e-commerce industry is the most frequent. Operation positions, which are closely related to the lifeblood of e-commerce companies, have once again become a hot topic among sellers. The most heated discussion is the issue of "operation commission", and many sellers have discussed the issue of "many companies give operation commissions based on sales."

Is the seller doing charity? Commission based on sales

"This year's trend of cross-border e-commerce, and companies giving commissions based on sales, is simply outrageous! They are just tycoons!" said a practitioner.

Some operators believe that the boss controls the price, so there is no problem with commissions based on sales. However, according to the feedback from many operators, the commissions based on sales are mostly a few thousandths, or even a few tenths of a thousandth.

This method of paying commissions based on sales has not been recognized by all operations. Some operations said that large companies can achieve sales of hundreds of millions or even tens of billions, but small companies pay commissions based on sales of millions, so the wages of operations seem a bit pitiful. In addition, the company's miserable collection status has made many operations say that they dare not expect to earn any income at all.

The practitioner believes that it is a relatively scientific approach to give operating commissions based on gross profit . The editor learned that the operating commission algorithms of various companies are different, mainly based on gross profit, sales, and net profit. For small and medium-sized companies, operating commissions are generally not high. Some more arrogant bosses may give about 6% of gross profit , but this is also based on the premise that the company has a considerable annual net profit.

No matter which method the company uses to calculate commissions for operations, it is ultimately linked to the company's order volume. After all, order volume is the biggest factor affecting a company's sales, gross profit and net profit.

However, the current situation of sellers' declining orders has not improved with the arrival of the New Year. The editor learned that since the resumption of work after the New Year, a large number of Amazon sellers have seen a serious decline in orders, and even a cold snap on Valentine's Day.

"I'm glad to have started off with 0 orders. I have lost my passion for work," a seller said on a social platform. He thought the orders in 2021 were bad enough, but he didn't expect the beginning of the year to be a heavy blow. The traffic declined and he received 0 orders.

It is understood that more than one seller suffered a cold start to the year, and many sellers saw a 50% drop in orders and a quarter of their orders. Coupled with the recent unfriendly weather in Shenzhen, many sellers said, "My heart is cold, and my body is even colder. I'll give myself a song of coolness."

The order volume situation is a concern for every cross-border person. Some sellers said that due to the decline in order volume, policy changes and the involution of peers, the company has been losing money and feels that it is about to collapse. Orders for old products have been dropping, and they want to promote new products, but the homepage bidding for advertising fees has been high. Sometimes, the ads are clicked but no orders are placed . It is too difficult.

Many veteran sellers who have been in the industry for several years agree with this situation and say that it is becoming increasingly difficult to do business in the cross-border e-commerce industry. They also say, "If it weren't for the old accounts, I would not have been able to survive last year because of the losses from the new accounts, and the old accounts are getting worse and worse."

Monthly sales of one million US dollars but a net loss of 30,000! Seller: Not talking about net profit is just a hooligan

Under the dual influence of high costs and low profits, sellers are well aware of the difficulties of this industry. Therefore, even though news of sales of millions or tens of millions continues to come from the industry, more sellers still focus first on the net profit behind the sales.

" It's rude to only talk about sales without talking about net profit ," a seller joked. "No matter how high the monthly sales are, how much profit is left after deducting various expenses? Don't end up being a charity seller."

What the sellers said was both a joke and a lesson from experience. After experiencing the impact of the epidemic, rising freight costs, inventory restrictions, etc., being able to maintain a steady profit has become the ideal goal of many sellers. An Amazon seller with monthly sales of over one million US dollars said that after looking at the financial data for January, he found that he had lost more than 30,000 US dollars in a month.

The seller mainly operates in the US market, mainly on the Amazon platform, supplemented by Walmart, eBay and other platforms. The seller said that the sales of Amazon US site reached 1.04 million US dollars in January, plus the income from other Amazon sites and other platforms was about 80,000 US dollars. Although the company has been operating normally and has not violated any regulations, it still lost 36,000 US dollars after deducting various expenses.

The financial statements provided by the seller for that month show that the platform fees in January exceeded 450,000 US dollars, the cost of goods was not high, and the gross profit reached 80%. After deducting the costs and operating expenses such as advertising and promotion expenses, transportation and warehousing, and tariffs, the net profit for that month was -36,500 US dollars.

The seller's situation has caused heated discussions among sellers. One seller said that he bought a batch of goods worth $2.5 and sold them at $6 per unit. After deducting the 20% platform fee and shipping fee, there is nothing to earn. Costs have been rising, which is a common problem faced by sellers in the industry. While complaining, one seller said: "Since Amazon's platform fees are high, it is better to switch to other platforms with relatively lower comprehensive gross profit margins as soon as possible."

This seller's situation is not an isolated case in the cross-border industry. There is also a saying in the industry that "sales volume is not the key to success, but net profit is king." In fact, in the past year, it was not only small and medium-sized sellers that suffered losses in net profit, but even many large sellers could not avoid the impact of the industry and the platform...

Earlier, many major retailers including Zebao's parent company Xinghui Holdings , Youkeshu's parent company Tianze Information , and Tongtuo's parent company Huading Holdings successively released their 2021 annual performance forecasts, but their net profits were all expected to be losses.

Xinghui shares stated in the report that due to the impact of the account blocking wave, the company's performance in the second half of the year suffered a severe blow, and its net profit loss last year was expected to exceed 1.2 billion ; Tianze Information also stated in its performance forecast that it expects a net profit loss of 1.8 billion to 2.5 billion in 2021 , and the reasons include changes in Amazon platform policies and intensified market competition; Huading shares, which expected a net profit loss of 520 million to 780 million last year, also pointed out in the announcement that the account blocking wave and increased costs were key factors leading to the decline in performance.

It can be seen from these big sellers that although compliance operations are the way to long-term operations, platform and industry competition is still intensifying. In the eyes of most sellers, the survival of the fittest in the industry is both real and cruel. If you want to be the gold left after the great waves, setting up an independent station or other platforms as soon as possible is a new way out.

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operations

Commission