Companies with 100-person teams have closed down one after another, and the year-end layoffs in the cross-border industry are coming

A seller in Guangzhou whose account was blocked said that 4 out of 10 cross-border e-commerce companies he knew had gone bankrupt, mainly due to account blocking and poor management. The team sizes of these companies were all over 100 people. Other companies in poor conditions have tried to survive by reducing staff, changing product categories, etc.

Sellers began to discuss how to save costs and lay off employees. Reports of operations being laid off increased, and some small businesses were quietly disbanded. As the industry situation changed, operations staff who were very popular at the beginning of the year began to be re-selected.

Guangzhou sellers suffered setbacks, 4 out of 10 companies went bankrupt

Mr. Li is a cross-border e-commerce seller in Guangzhou. His company operates on several domestic and foreign platforms, including Amazon, eBay, and Shopify. The team of more than 200 people can generate hundreds of millions of sales a year.

Around April or May this year , Mr. Li’s company’s main Amazon account was suddenly blocked, and countless funds were frozen, making him one of the first batch of sellers hit by the account blocking wave.

Most of the top sellers whose accounts were blocked are in Shenzhen. Industry insiders believe that the operating style in Shenzhen is too wild, while sellers in Guangzhou are more cautious and were less affected by this incident. Mr. Li denied this.

"From what I know, Guangzhou is actually quite difficult. Among the cross-border e-commerce companies I know, 4 out of 10 have gone bankrupt, and the teams basically have more than 100 people. Some companies rented an entire floor with more than 300 people, but now the entire floor is gone." The reason is that 40% have their accounts blocked, and 60% have reduced profits that are difficult to sustain.

After the account was blocked, he immediately hired a lawyer and talked to Amazon staff, but nothing was achieved, and he was unable to communicate with the platform later. "The platform believes that all the blocked accounts in China have only one characteristic, which is fake orders," said Mr. Li.

He does not fully agree with this. In his opinion, in addition to the common reason of fake orders, Amazon has many other judgment points, such as exaggerated marketing. In addition, the epidemic has prolonged the delivery time, and customers cannot confirm the receipt of goods in real time; foreign express delivery workers often go on strike, and it is impossible to track the logistics trajectory of goods in real time, which has a certain impact on the store's rating and reputation.

"Top sellers, such as those in the electronics business in Shenzhen, were in the same situation as us. Basically, they were treated the same way in the end. Later, I heard that the Chamber of Commerce in Shenzhen found the person in charge of Amazon China and said they were going to communicate, but they still couldn't communicate because everything over there was based on Amazon's rules and foreign laws. We had no way to deal with it."

Mr. Li is pessimistic about the account situation. The sellers of the blocked accounts have sought rescue many times, but have not received any news of funds. However, he still holds out a glimmer of hope, thinking that the funds will be frozen for a period of time, but the length of time is still uncertain.

Fortunately, the previously seized inventory is being returned. Mr. Li said that the goods can only be sent back after being seized for several months, but it is not completed all at once, but is returned in batches. Amazon needs to conduct a return review, and the procedures are complicated. The long return period makes him a little irritated. Until now, his company's goods are still being returned.

Last year, Mr. Li's company's performance exceeded expectations by 20%-25%. Now that the main account has been blocked, the traffic of the sub-account is limited, and the sales on Amazon have dropped by 60-70%. Due to the scattered categories, this loss ratio is not too high compared with other blocked sellers. In previous years, Mr. Li's company had to prepare for the Black Friday promotion a year in advance, but after the account was blocked, there was almost no hope for this Black Friday.

Like Mr. Li's company, many factories in Guangzhou started out as B2B trade companies, and later developed into an online and offline combination model. After seeing some benefits, the bosses who were more conservative in the factory became more aggressive in operations, especially in online channels, so the account suspension had a significant impact on them.

Mr. Li said that he could feel that everyone was very sad during the chat. Some companies went bankrupt, while others shrunk to a very small scale and stopped selling in large quantities, turning to fast-moving consumer goods brands or higher-profit categories; some businesses returned to the pure factory model and relied on traditional B2B trade to survive.

To survive, the operation team was cut in half due to internal optimization.

Affected by the account suspension incident, many sellers began to adjust their sales strategies and gradually reduce their dependence on Amazon through multiple platforms and independent websites. Many sellers around Mr. Li are starting to build their own websites. He believes that it is better to suffer a short pain than a long pain. Although independent websites have risks, they have their own rules and are more controllable than platform operations.

The success of giants such as SHEIN and Cider has planted the dream of independent websites for many sellers. "Now there are a lot of people in China who have joined Shopify, and some are really doing very well." Mr. Li said, "I see a lot of people buying independent website services. We have our own team and recruit people to develop it, so why not buy it? There is a big gap between it and the actual business, and the framework form cannot be platformized. We hope that independent websites can gradually become platformized in the future, and some will join in."

At present, Mr. Li's company mainly operates European independent websites according to the products and existing buyers . In the long run, they hope to establish a comprehensive independent website platform to provide services to sellers through the SAAS model. Mr. Li said that there is "no other way" to operate an independent website because the platform is difficult to operate for two reasons: the first is account suspension, and the second is the price pressure from Chinese sellers.

"To be honest, I don't know how others make money. If you set the price too high, you can't sell it. If you set the price too low, plus the logistics and storage fees, you will lose money. The RMB is still appreciating. This year, our definition is that if you don't lose money in cross-border e-commerce, you are profitable . "

However, Amazon has abundant traffic and is a position that sellers cannot give up, so Mr. Li's company transformed its original business:

1. No overstocking. Previously, a single product had a lot of overstocking. After the account was blocked, the company began to adopt the strategy of not overstocking.

2. Category transformation. We have made some products before, but the price of sea freight is close to the previous air freight. The logistics cost makes cross-border e-commerce almost unprofitable, but we still need to run volume, so we are now starting to transform our categories;

Mr. Li analyzed that the reason why sellers who were blocked or had difficulty in operating can still survive on Amazon is that they have made internal optimizations. The operation team of several hundred people may now be cut in half or more to save costs internally. This is the layoffs faced by operation staff.

Compared to the hot start of the year, many operations professionals were worried about salary cuts and layoffs in the second half of the year. By the end of the year, news of layoffs among operations professionals began to appear frequently.

An operations manager lamented that a college classmate just switched careers and joined Amazon this year. Only half a year later, the company of several hundred people was reduced to dozens of people. At the end of October, the company notified that it would continue to lay off employees.

An industry big V said that several friends have started discussing topics such as how to save costs and how to fire employees. Since no money was made in 2021, the company will reduce useless or low-productivity personnel and optimize the team from the end of the year. At the end of December, a seller said that a cross-border seller in South China City started the second wave of layoffs, retaining only those who were working. An operator who was working hard to clear the inventory was told that he would be fired at the end of the month.

An operations staff member made a wish that the biggest goal for 2022 is not to be laid off. "A colleague told me this afternoon that a business in the same group was persuaded to leave by the manager. She had a feeling that she would soon get a result. Sure enough, she just received a call to confirm the news of her layoff. Yesterday, a young girl sitting behind her was also laid off. The world economy is slowing down due to the epidemic, and companies are laying off employees in disguise. Don't think you are great and can change jobs at will."

At the same time, the number of small companies dissolving is also increasing.

One operator said that he was fired at the end of the month because the company was not going to continue. Another also said that the company could no longer hold on and might be completely dissolved by the end of the year. "This year is really difficult. We finally made some money during the peak season and thought the company could survive, but something went wrong with the store and all the money was gone. I suggest that everyone should find a medium-sized or above company. Small companies can easily disband."

While many companies are downsizing for the winter, a small number of companies are actively recruiting and expanding because they made money this year and have ample funds. Entering the new year, these companies are likely to continue to expand their profits.

In addition to the current situation of bankruptcy and layoffs, another current concern for cross-border e-commerce practitioners is the year-end bonus.

I get a basic salary all year round, and I dare not even think about the year-end bonus.

Due to the overall environment, the performance of many cross-border sellers declined in 2021, and some companies even went bankrupt and suffered losses. As a result, many cross-border practitioners were laid off, and those who are still employed said: I dare not even think about what the year-end bonus will be.

Currently, cross-border practitioners are having heated discussions on the topic of year-end bonuses. An industry insider lamented that at this time last year, the company had already issued year-end bonuses, but this year it is still quiet and I wonder if there will still be year-end bonuses.

Afterwards, many colleagues expressed envy, saying that it was so difficult to work at Amazon this year, but you guys actually got a year-end bonus, which I have never received. Some Amazon operators even said frankly that they have never received a year-end bonus since they started working at Amazon. More feedback from cross-border practitioners on year-end bonuses is as follows:

“——People who haven’t received year-end bonuses for several years are passing by;

——I envy you for having a year-end bonus;

——I haven’t received a promotion for five months, let alone a year-end bonus;

——The company calculates commissions, and you cannot have a year-end bonus at the same time;

——What is the year-end bonus? I haven’t received it yet;

——I have been in the company for two years, and I have probably only seen the year-end bonus in my dreams;

——This year has been tough. Not to mention the year-end bonus, the leadership has been asked to take a pay cut.

- Don't ask about the year-end bonus. If the performance is not good, you are lucky not to be fired.

——I can’t count on the year-end bonus, but I’ll be thankful that the commission that has been withheld for a year has been paid out;

——I don’t dare to think about the year-end bonus. Salaries are only paid once every two months. I just hope that the commission and basic salary can be paid before the New Year. ”

According to numerous feedbacks, many cross-border people did not receive year-end bonuses this year. However, some company bosses also stated that performance this year was not good, with sales and profits falling sharply. However, since employees have worked hard for a year, they still have to give out some year-end bonuses to make everyone happier.

As the boss mentioned above, some companies have year-end bonuses. One employee said that the company's year-end bonus is 1.5% of the annual net profit . Another colleague said that last year, six people had sales of more than 100 million, and the performance bonus totaled 60,000, and the year-end bonus was more than one month's basic salary. This year, each person set a target of 3 million US dollars, but no one reached the target, so there was no performance bonus, and the year-end bonus was one month's basic salary.

The year-end bonus is one month's base salary, which is the 13th salary system used by many companies in the industry, that is, an extra month's base salary is paid at the end of the year. Some cross-border practitioners confirmed that the company will not issue a year-end bonus, and the 13th salary is equivalent to the year-end bonus.

For companies that issue year-end bonuses, the forms of issuance are also different. According to relevant feedback, the forms of year-end bonuses issued by cross-border e-commerce companies in the industry are as follows: 1. All the bonuses are issued before the New Year; 2. Half of the bonuses are issued before the New Year and the other half after the New Year; 3. The bonuses are issued after the New Year when the company returns to work; 4. The year-end bonuses are issued in three installments, at the beginning, middle, and end of the second year.

Regardless of the form, the companies that can give out year-end bonuses are relatively good companies. Most cross-border companies will not give out year-end bonuses in 2021, and the expectation of "workers" has become: to get the commissions that should be paid. However, the worst wave of cross-border practitioners did not even get any commissions.

Operators in the cross-border e-commerce industry basically adopt a base salary plus commission system. Many operators rely on performance commissions to save money. However, due to poor performance in 2021 and the impact of account suspensions on some companies, the commissions of many operators in the industry have been greatly reduced, and some operators have not even received performance commissions for a whole year.

An operations staff member said that after spending all his annual salary this year, he saved less than 10,000 yuan, and hoped that next year would be better. Another colleague said that it was too real to have no annual salary, and that was me. Someone joked that you may not know what it means to have no commission for a year and only receive a basic salary. We generally use five words to describe such people: Amazon operations.

Only a small number of cross-border practitioners receive only a basic salary throughout the year, but more people are facing the reality of a significant reduction in commissions. In 2021, many cross-border practitioners have worked hard for a whole year. Some only receive a basic salary, some dare not expect a year-end bonus, and some even worry about being laid off.

Poll: How was your 2021? Did you get a year-end bonus?

1. I don’t know what a year-end bonus is and I’ve never received one.

2. There is a year-end bonus, which will be paid in several installments

3. Only 13th salary

4. I only received basic salary for the whole year, and I was lucky not to be laid off.

Compared with the miserable year-end bonuses of cross-border practitioners, shipping companies that are closely connected with the industry can be said to be extremely generous, and the amount of year-end bonuses issued by some companies is also really enviable.

After paying out 40 months of year-end bonuses, shipping companies will continue to pay out bonuses

In 2021, the performance of many shipping companies has exploded, and they are also generous in distributing year-end bonuses. It is reported that Evergreen Shipping's year-end bonus is 40 months' salary, and its employees exclaimed: I have never seen so much money.

According to further information from Xinde Maritime Network, Evergreen Marine's year-end bonus this year ranges from 35 to 40 months' salary, and the specific amount depends on performance. Most junior employees receive 35 months' salary. The average monthly salary of new employees is more than 40,000 Taiwan dollars. Based on the lower 35-month salary this time, the year-end bonus can be nearly 1.5 million Taiwan dollars. For employees with more than 10 years of service, it is no problem to receive 40 months. For an employee with more than 10 years of service , the monthly salary is about 60,000 Taiwan dollars, and the year-end bonus after conversion is nearly 2.5 million Taiwan dollars.

Employees receive 40 months of year-end bonuses, and management bonuses are higher. According to media reports, Evergreen Shipping's senior managers received 82 months of year-end bonuses, with a total amount exceeding 10 million (New Taiwan dollars). An informed freight forwarder revealed that the 80-month year-end bonus was indeed true.

After issuing high year-end bonuses, Evergreen Shipping will continue to issue bonuses. According to reports, Evergreen Group Chairman Zhang Guohua recently said that employees will receive another bonus after the shareholders' meeting in July 2022. However, the specific amount of the bonus and the reason for the issuance were not disclosed.

In terms of bonus distribution, Evergreen Marine's generosity comes from its huge increase in performance and considerable profits. According to the International Shipping Network, Evergreen Marine's profit in 2021 exceeded NT$200 billion (approximately RMB 46.083 billion), of which more than half came from the domestic market. Cross-border sellers have contributed a lot!

At present, Evergreen's five largest ports in China are Shanghai, Ningbo, Shenzhen Yantian, Shandong Qingdao and Fujian Xiamen. Thanks to the rapid resumption of work and production in the manufacturing industry after the epidemic and the growth of exports, Evergreen's main routes this year are concentrated in Asia, and the largest market is China. Evergreen has identified China as the only market with the most sufficient production and steady export growth after the epidemic, and has concentrated its fleet to take the routes from China to North America and Europe as the main line.

In fact, in 2021, the domestic export industry's demand for shipping has increased significantly, container prices have increased several times, and it is even more difficult to find a container during a certain period of time. The most intuitive feeling of cross-border sellers is that the cost of ocean shipping has skyrocketed, and the freight is so expensive. A freight forwarder who has been in the industry for ten years said: "I have never seen such high freight rates, and there has never been such a market."

The increased freight rates have made many shipping companies very profitable. Some shipping companies made as much money in the past decade as they did in the past year.

In the first three quarters of 2021, several shipping companies achieved record-breaking results: COSCO Shipping's net profit reached 69.59 billion yuan, the highest point since the company was founded; Hapag-Lloyd achieved a net profit of 6.7 billion US dollars, exceeding the company's profits in the previous five years combined; Maersk's net profit reached 5.5 billion US dollars, higher than its best annual profit ever.

Not only that, these companies may make more money in the future. In November 2021, the United Nations Conference on Trade and Development (Unctad) released a report saying that due to strong demand, shortages of equipment and containers, and port congestion, ocean freight rates are expected to remain high.

Shipping companies make money and give employees high year-end bonuses. The news that Evergreen Marine employees received 40 months of bonuses spread quickly and became a hot topic. In the cross-border seller circle, this news quickly swept the screen. Looking at their own year-end bonuses and then at others' year-end bonuses, cross-border practitioners were envious.

Cross-border sellers said: "After working hard for a year, all the money is spent on freight forwarders and shipping companies. All the sellers' money is earned by freight forwarders and logistics companies, and the skyrocketing logistics costs eat up a lot of profits." Another industry insider lamented: "Ship owners eat meat, freight forwarders drink soup, and sellers chew dregs!"

Cross-border e-commerce has been advancing under the pressure of the epidemic. In 2021, cross-border sellers cannot escape the curse of rising freight costs and sharply falling profits. Under the background of upgraded platform control, some sellers' accounts were blocked during the rectification, and their performance was greatly affected. Many cross-border e-commerce companies laid off employees to save themselves, and many cross-border practitioners lost their jobs. Year-end bonuses have become a luxury for this industry. This year, many sellers are sighing: "It's too difficult!"

In the new year, freight costs may continue to rise, and the platform rectification has not yet been paused ... For cross-border sellers, 2022 will still be a challenging year.

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