Give up the internal competition! A group of Amazon sellers raised prices by 10%

Since the beginning of this year, the severe price war has exhausted many Amazon sellers, but now there is hope that the internal competition will end.

In September, the soaring freight rates and high freight bills made people gasp. The value of some products was even lower than the freight rates. In addition, the low US dollar exchange rate meant that sellers’ profits were being exploited. As various operating costs increased, sellers should raise prices, but the market was very distorted: as the restrictions on replenishment continued to tighten, sellers bet on sales, hoping to get a larger replenishment quota by moving in and out quickly, but the results were minimal and induced large-scale dumping of goods, low-priced new products, and clearing of blocked accounts, which quickly lowered the prices of the entire market. Sellers in many categories were caught in the price war and were helpless.

Now, the skyrocketing shipping costs have finally made some sellers decide to raise prices. "Logistics costs, storage costs and advertising fees have increased. If we don't raise prices, we will really become brick-moving warriors." A seller said. Some sellers have raised their prices to a reasonable range, and some have increased by 10%.

Refusing to be a philanthropist, the seller raised the price by 10%

On Amazon, low-price sales are still everywhere, and sellers are complaining about it.

It is not uncommon to see Christmas decorations being sold off-site at 90% off, or entire categories being sold at lower prices. One seller pointed out that a product priced at 39.99 was reduced to 12.99, which was 50% off, and the delivery fee was not enough. "After calculating the cost and shipping fee, if you can lose money for three months, I will lose."

Referring to the sky-high logistics costs, many sellers question that selling at ultra-low prices cannot guarantee profits at all. Many people rely solely on low prices to grab slots, and as to whether they can make up for it later, the company will naturally cover the cost.

The rising logistics quotations became the last straw. With the heavy costs weighing on their heads, some sellers refused to accept the offer: no low prices, no warmth!

A seller said that the selling prices of products in Amazon stores need to be adjusted appropriately in Q4. With the increase in logistics costs, warehousing costs and advertising costs, if prices are not raised, they will really become profiteers.

"Making friends without making money" has been criticized. Some sellers hope to unite and raise prices collectively. Some people have already taken action. "I have raised the prices of many products. Lowering prices will not increase inventory capacity." "The overall price has increased by 10%. It's not charity." Judging from this kind of feedback, the internal circulation is expected to end.

However, some sellers said that after raising the price to a reasonable level, the number of orders dropped sharply, while their competitors did not raise the price at all, and some even looked outrageous. This reality makes people worry: if we raise the price, will our competitors take advantage of the opportunity to steal the tower?

Others are even more distressed, because they can't sell even at a reduced price. Sellers have become contradictory: shipping costs are so high, yet they are still so competitive.

Ocean freight is about to exceed 30. Is there still profit if the price is not raised?

The main reasons for the price increase are as follows:

1. Freight costs have risen sharply, and the price of Meisen may break 30

In recent days, the price of ocean freight has been rising almost every day, and the increase is so large that sellers can't imagine it. According to feedback from many sellers, the price of Matson has risen outrageously this week, and some freight forwarders have quoted prices as high as 30.

The freight forwarding quotes vary according to different situations in different places. Currently, only a few regular Meisen quote 30. The quotes of other regular Meisen are basically between 23 and 29. The feedback from many sellers on freight is as follows:

“——Sea freight quotes are now 23/24/25;

——Meison is already 25, and I heard that he will break 30 by the end of this month;

——Shenzhen’s regular Meisen 25/26/27;

——The traffic jam in Meisen has increased to 29, is it too late to learn how to drive a boat?

——Will the price of Meisen rise to 30? I am trembling with fear;

——Once again I lament the sky-high prices of sea freight, which are said to be going up.

The surge in shipping prices has directly affected the profits of many cross-border sellers. As the peak season approaches, they cannot afford not to ship goods, but the high shipping costs are painful. One seller asked a soul-searching question: What kind of magical products can still keep profits when shipping regular products?

As the shipping price continues to rise, one seller lamented that it is better to ship as early as possible. He thought it was too expensive the day before and was still hesitating whether to ship. As a result, the price increased again the next day, and it became even more expensive! Another seller said that the shipping cost is getting higher and higher, and sending a batch of goods is as entangled as shopping on Double Eleven.

With the sharp increase in freight rates, many sellers have calculated the proportion of logistics costs in sales . Many sellers said that the proportion has exceeded 10%. Some sellers also bluntly stated that those who can control logistics costs below 20% this year are great people!

As for the future freight rate trend, many sellers and freight forwarders in the industry believe that it may continue to rise. The prices of most regular Meisen freights will continue to rise and will exceed 30 by the end of this month.

An industry insider said that according to reliable information, the reason why the price of Matson has risen so horribly is that it was driven up by short-selling freight forwarders! Many freight forwarders took the containers of Matson's regular ships to collect short-selling goods! During the epidemic, they used various excuses to evade customers when there were delays of a few days.

Later, a seller said that the goods had been shipped by air and it took more than 20 days to arrive in the United States , which was about the same time as Matson . Could it be that the channel was changed?

2. Storage capacity is reduced again, and storage fees will be tripled.

Recently, Amazon has frequently adjusted its storage capacity, and some sellers’ storage capacity has been reduced again this week. One seller said bluntly: All products are out of stock, can you give me more storage capacity?

According to multiple feedbacks, there are quite a few sellers who are out of stock. Under the limited storage capacity, in order to avoid the trouble caused by out of stock, some sellers increase the price. One seller ran out of stock of 5 products, and raised the price of all these products, and the result was that they sold even better.

As the peak season approaches, the 3x storage fee is also coming. Which will come first, the 3x storage fee from October to December or the surge in orders? Sellers who stock up in advance will be limited by the increase in storage costs, and will then raise prices to protect profits.

3. Advertising fees will increase by about 50%

Advertising costs have been soaring recently. Advertising costs are being spent, but the number of orders has not increased. This is the current situation of many people. The real situation of a seller: when he opened his eyes in the morning, he spent 200 on advertising, but did not get a single order.

According to statistics from a foreign statistics website , from July last year to July this year , the average cost per click on Amazon ads rose from $0.79 to $1.2, an increase of about 50%. Data from other statistical channels show that the average cost per click on Amazon ads rose from $0.5 to $0.7, also a rise of about 50%.

4. Profits have shrunk significantly

Compared with the same period last year, the profits of most sellers have shrunk this year. Although sales have not decreased, the profits have dropped a lot.

Since April this year, several categories of Amazon have started a price war. This phenomenon has gradually fermented and reached a climax in June. Limited by the impact of account suspension, the top sellers have cleared their inventory and joined the price war at ultra-low prices, causing many sellers' profits to fall sharply. One seller said that since June, his products have been difficult to sell. Seeing that his peers were all lowering their prices, he still had difficulty selling after lowering his prices, and even the products he sold had almost no profit.

As profits shrank, some sellers woke up and began to raise prices to protect profits and return to the essence of business.

Under the entanglement of various factors, a group of Amazon sellers raised prices to save themselves. They adhere to one principle: they will never be cross-border philanthropists!

Involutionary price war