Amazon's internal competition is too serious! Sellers quit after working for a year and a half

Before the peak season in previous years, most sellers were eager to get going, but this year the atmosphere during the preparation stage was a bit heavy.

The price war on Amazon is getting more intense. The storage capacity of the US site is constantly tightening. In order to free up storage capacity, sellers have started a new round of price cuts and sales, and their profits are very low. On the other hand, the costs of shipping, advertising, storage, taxes, and exchange losses have skyrocketed, causing sellers to take a deep breath. For most sellers, the upcoming peak season is more like a hot potato.

Policies are frequently issued, and sellers who have been in business for a year and a half have quit

It has become a consensus that doing business on Amazon is not easy this year, and news of sellers leaving the market has been heard from time to time.

Several sellers mentioned in the chat that many people had left the two seller groups they were in. "I know someone who started this year and said in May that he had earned 600,000 yuan, but later more than 30 accounts died and he didn't get the 600,000 yuan," said a seller.

A seller chose to leave after one and a half years in the industry. “I started from scratch on Amazon and worked for a year and a half, but finally gave up. I didn’t make much money, but luckily I didn’t lose money either. It’s easier to jump off a small ship.” The frequent policies may be one of the reasons that persuaded this seller to leave.

The sellers left, and the company's employees were also swept away. One operator was helpless. He went to work as usual in the morning, but as soon as he entered the office door, he was told that the company was closed. He was laid off inexplicably.

Amazon has long been an asset-heavy industry for most sellers, with over a million products in stock. In the past two days, "If I didn't do Amazon this year, I would still be rich" has become a hot topic, and sellers have expressed their feelings:

——"If I hadn't decided to increase my stake in Amazon, I would have had an easy life this year."

——"I also told my friends that if I didn't touch Amazon this year, my account would be much more expensive."

——"My liquor and medicine businesses have all been untied, but my Amazon remains unmoved..."

——"If I hadn't started Amazon, I would have probably even left my marriage and spent all my dowry on it."

Sellers with mixed feelings concluded that it is easy to get into the trap but difficult to get out. One seller was a little helpless: Is there anyone who still thinks Amazon is making money? In March, a friend of mine took about 200,000 and said he wanted to do Amazon. He registered an account in May. Today, four months later, he said he launched his first product, a wig. I want to persuade him not to do it, but I don't want to undermine his confidence.

Overall, there are two things that bother sellers the most now - more intense price wars and thinner profits.

Involution is serious, and price war is taking place

Since the first half of the year, the price war on Amazon has been unprecedentedly severe, causing great headaches for sellers, but this trend is still deepening.

One seller was extremely angry: "All competitors are selling products like crazy. The original 59 dollars is now 39 or even 29. Why play Amazon? It's better to play the game. It's a long way to go. You have to bear the highest shipping costs in history and take all kinds of risks to subsidize Americans. In the end, they will not thank you for your Lei Feng spirit. You may even be suppressed in a new round because of vicious competition. Just wait and see."

Another seller felt the same way: "The internal competition is very serious this year. I have a product that I have been making for three years. The profit was OK before, but no one came to sell the same product as me for three years. But this year, seven or eight sellers came in almost at the same time. I lose money if I send it by express delivery, but I can survive if I send it by sea."

Since May and June, many sellers have realized that it is difficult to do business on Amazon. The competition is particularly fierce and the internal competition is too serious. This is the unified feedback from sellers. One operator complained that he spent $100 on a new product but still had 0 orders. He couldn't even turn the spiral. He lost $5 and no one wanted it.

New products are difficult to promote, and price cuts are a quick fix, but price cuts lower category prices, and top-ranked products also want to maintain their rankings with price advantages, which has become a vicious circle. In addition, as storage capacity continues to tighten, many sellers are frantically selling inventory to free up storage capacity and unlimited storage in the fourth quarter, making prices even less optimistic during the peak season.

One seller said frankly that if they don’t raise prices, they will starve to death, and all sellers should work together to raise prices. However, some sellers think this is difficult to achieve. In addition to the business habits of domestic sellers, another point is that prices in the United States are rising, and online low-price shopping will be more popular.

Currently, Amazon sellers are in a fierce price war, and various operating costs are soaring. This confuses sellers: "I really don't know if my peers are profitable. How do they make money?"

Various costs soared, and many sellers' profits declined

Since the beginning of this year, many Amazon sellers have felt that various operating costs such as logistics, warehousing, promotion, and taxation have risen sharply to a level that they cannot accept.

1. Logistics costs have soared 10 times. Logistics costs have been rising all the way and have continued to rise recently. Whether it is air freight, truck freight or sea freight, the logistics costs of various channels are rising, especially the sea freight price, which has almost become an unacceptable ceiling for sellers .

Previously, in order to save costs, many cross-border sellers would ship goods through sea transportation channels. However, since the outbreak of the epidemic, the logistics costs of related sea transportation have soared by more than 10 times. In addition, the second half of the year is the peak season for sea transportation, with strong demand and insufficient shipping capacity, and sea transportation prices have soared. Some sellers said that compared with the overall cross-border logistics freight rates in July and August, the increase has been close to 50%.

Not only sea freight, but all channels will see freight rates increase in the second half of the year. Recently, a freight forwarder has issued a notice informing sellers that freight rates will increase significantly in the future. Sellers exclaimed: It has already increased to this extent, and they are still going to increase it. Are you going to let us live!

2. Huge storage fees drag down sellers. The base storage fee from October to December each year is higher than other months. In addition to normal storage fees, some sellers also have problems such as long-term storage fees and overcapacity. Previously, some sellers had huge storage fees of 180,000 or 300,000, and some sellers' storage fees tripled during the peak season. Now that the peak season is approaching, sellers need to pay attention to this fee.

Some sellers may have other problems, resulting in huge storage fees. One seller said that his classmate encountered troubles. All the goods have been put online and are expected to be shipped in October-November. However, because the freight to the United States is too high recently, 2-3 times that of last year , the customer suddenly sent an email saying that all large goods will be delayed until January-March-May next year , which caused huge storage fees. More than 20 cabinets of goods will incur a lot of fees. This is a chain reaction caused by freight!

3. Advertising costs have been rising. Recently, sellers’ advertising costs have also been rising. After this year’s PD promotion, many sellers reported that advertising costs have been rising. Especially after Amazon’s rectification, many sellers stopped various illegal operations, and orders have obviously declined. In order to stabilize orders and rankings, sellers have shown their magical powers, and some of them have invested heavily in advertising.

As the peak season approaches, more sellers begin to invest more in advertising in order to get more orders during the promotion, but the advertising investment is just money spent without bringing in orders. The day before yesterday, an operator reported that he spent $100 on advertising but did not convert a single order.

4. Amazon withheld European taxes, causing sellers to lose nearly 20% of their profits. On July 1, Amazon withheld European taxes. Many sellers said that their profits were directly lost by nearly 20%, which made the already meager profits even worse. However, tax compliance issues will come sooner or later, which is a good thing for compliant sellers.

Sellers who originally did not pay taxes are in a lot of trouble. After the withholding, many sellers did not raise prices due to various issues. Industry insiders questioned: "After the withholding tax, some sellers did not raise prices, and some even lowered prices. Is this charity?"

Various operating costs have risen this year, and many people are engaged in price wars. The peak season will be a tough battle for Amazon sellers!

USA, Profit, Seller