Compared with the boom last year, the cross-border e-commerce industry has slowed down this year, and many sellers in the industry have seen a decline in sales and profits. Faced with this pain point, how do independent website sellers with annual sales of hundreds of millions deal with it?
Yien.com interviewed Wang Shuaipeng, VP of Zhengzhou Xiaomoshou E-commerce Co., Ltd. (hereinafter referred to as Xiaomoshou). As a vertical independent website seller in the industry, Xiaomoshou has a unique strategy for mid-tier sellers. At the same time, facing the hot issue of platform sellers opening independent website channels, Wang Shuaipeng also gave pertinent suggestions.
How do vertical independent website sellers break through?
Founded in 2017, Little Monster is one of the largest global online eyewear brands in China . Located in Zhengzhou, Henan, Little Monster is a low-key vertical independent website seller in the industry. In the past three years, Little Monster has grown at an annual rate of more than 100%, far exceeding the industry average growth rate. However, Little Monster does not seem to be satisfied with the sales during the peak season of this year, during the just-passed Black Friday and the online promotion.
Wang Shuaipeng, VP of Little Monsters , said frankly that this year's sales did not meet growth expectations. Because last year was the year of the outbreak, the epidemic caused a sudden increase in sales, and the performance of many sellers was abnormal. This year, the growth of many peers has not been as expected, which has a lot to do with the overall environment. Take Black Friday as an example. On the day of the big promotion last year, many sellers' sales increased several times, and this year their performance may double.
Last year was a period of rapid development for the cross-border e-commerce industry, and it was relatively easy to catch the express train and achieve rapid growth. This year, the industry has slowed down, and it is not easy for many sellers to maintain stable growth in performance. In contrast, the time node of Little Warcraft's entry into the independent station does not seem to be in the bonus period of industry development, but it has stood out from the competition with a set of hardcore strategies.
In 2017, Little Monster entered the cross-border e-commerce market. At that time, some independent website giants in the industry had already established a firm foothold. Therefore, Little Monster tried to seek opportunities in customized products with less competitiveness. Finally, Little Monster decided to enter the prescription glasses category, and encountered difficulties at the beginning of its development. Because it did not understand the glasses industry, it took a lot of detours in suppliers. On the one hand, due to small-volume purchases, the price had no advantage and was almost the same as retail purchases; on the other hand, as a trader, it was difficult to control the quality of the products.
In order to overcome supply chain challenges, Xiao Moshou formed its own glasses design team, procurement team and processing team, and learned from traditional glasses manufacturing companies to make up for the company's shortcomings.
It is not easy to successfully break through when entering a new category. Little Warcraft mainly relies on cost-effectiveness and product differentiation to win.
Wang Shuaipeng said that as an enterprise or brand, cost performance is a very competitive point in the competition, which depends on whether the cost control and product quality can be balanced . Another important point is product differentiation. Ordinary eyewear products are quite standard, while the products of Little Monster are relatively fashionable. All women in the world love beauty. From this perspective, we make the glasses more fashionable and better looking, so that consumers may be more willing to choose this brand.
Tips from the big guys: How to avoid a decline in profits when operating costs soar?
After identifying its advantageous products, Xiao Moshou grew rapidly and gradually became an excellent vertical independent website seller in the industry.
This year, logistics prices in the cross-border industry have skyrocketed, and advertising costs have risen sharply. Cross-border sellers in the industry have said that operating costs have increased and profits have been damaged to a certain extent. Against this background, Little Warcraft has also been affected.
In the case of profit loss, Wang Shuaipeng believes that price increase is the most direct way to solve the problem. However, price increase may affect conversion. At this time, in order to maintain profits without affecting conversion too much, Wang Shuaipeng shared two ways of doing it.
1. Accurately control the cost of each link
If the seller wants to raise the price, it cannot be abrupt. The whole process must be optimized and a certain part must be adjusted. This part may bring more revenue, but at the same time will not affect the conversion too much. In this process, the seller needs to analyze the data more accurately and decide which part should be adjusted to have the least impact on customers, that is, the least impact on conversion.
Second, internal cost optimization must be done
Sellers can further optimize their internal operating costs, such as by investing in IT to establish a digital supply chain , improve supply efficiency and enhance product quality ; by studying user behavior , improving website conversion rates and reducing customer acquisition costs ; by developing tools to support business development , improving internal management efficiency and labor efficiency ; and continuously optimizing these aspects . If profits can be increased by 3 percentage points , these profits can be used to offset some of the increases in logistics , raw materials , traffic and other costs.
There is a phrase called increasing revenue and reducing expenditure, which means bringing in more revenue and optimizing costs at every stage. In order to ensure profits, Little Warcraft also does this.
Speaking of increasing revenue and reducing expenditure, Wang Shuaipeng mentioned that some sellers in the industry have gradually moved their operation centers from Guangzhou and Shenzhen to the central and western regions, which may also be a manifestation of cost savings. For example, a technical team of 50 to 60 people would cost more than 10 million yuan in the central region . If it were moved to Guangzhou and Shenzhen, the cost might double.
Xiao Moshou is located in the central city of Zhengzhou, which has an advantage in terms of personnel costs. To some extent, it also has certain shortcomings in professional operations recruitment, and its talent matching and professionalism are not as good as those in Guangzhou and Shenzhen.
However, for the long-term development of the company, Xiao Moshou dares to look for outstanding people to join the company team. Wang Shuaipeng said that the company will spend a lot of money to find some professional talents in various fields to make up for the shortcomings and magnify the advantages.
When entering the independent website, platform sellers need to grasp two key points
In terms of profit loss, sellers on third-party platforms feel it more directly. Limited by the current situation of platform control upgrades, rising advertising costs, and higher storage costs, independent site sellers such as Little Warcraft have become the envy of many platform sellers since this year, and some of them also want to join the independent site and expand new sales channels.
Wang Shuaipeng, who has been exploring the independent station channel for many years, believes that from the perspective of the brand, whether it is an independent station or a platform, it is just a sales channel. For sellers, it is nothing more than how to balance the products and users on the two channels.
There is a clear distinction between independent websites and third-party platforms. The products and users on the platforms are different from those on independent websites. Therefore, sellers can have two different sales channels, but the two core points to note are product thinking and user orientation.
If platform sellers expand their independent station channels, they can start with products they are familiar with and develop some products suitable for independent stations based on the categories they originally operated on the platform, or upgrade some products on sale on the platform.
When talking about the problem of independent website sellers obtaining traffic in the early stage, Wang Shuaipeng said frankly that social media are all very good channels. Sellers can choose according to their own products, let these channels play their value well, seize the opportunity of the end-of-channel bonus, and continuously accumulate resources and users.
How can independent website sellers further refine their advantages? A comprehensive analysis will be conducted at the 2021 First China (Zhengzhou) Central Cross-border E-commerce Seller Brand Overseas Summit . At this summit, Ennet, in conjunction with Facebook and other mainstream platforms, specially invited more than 20 industry leaders to gather in Zhengzhou to present two top content feasts on Amazon and independent websites.
At the independent station venue, Wang Shuaipeng will discuss with other independent station big sellers the ways for independent station sellers in central China to survive and extract their advantages , and point out the way for sellers . Scan the QR code below or click to read the original text to register for the conference for free and learn from the big sellers on site .
Independent website Big Sell |
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