Sellers choose to commit suicide? Amazon "falls from the altar"

Recently, the news that the boss of a cross-border company committed suicide by drinking pesticides because his Amazon account was blocked went viral in the seller circle. The pressure on everyone increased, and they began to seriously consider the risks of relying on a single platform amid the wave of account blocking.

Under Amazon's large-scale rectification, old sellers have suffered a lot, large amounts of stock have turned into high inventory, and the goal has changed from doubling profits to just staying alive; new sellers have gone from flocking to the market to stopping and watching; suppliers have taken on high risks and it is no longer easy to pay them; operators have seen their salaries cut sharply after losing their jobs and it is difficult to find a job ...The Amazon effect has begun to backfire, and this platform that was once deified in the hearts of sellers may have "fallen from its pedestal."

The news of the seller's suicide spread like wildfire, and the pressure on cross-border people doubled

The hottest topic among cross-border sellers these days is the suicide of a cross-border e-commerce boss who drank pesticides. A seller revealed that the boss of this company was an Amazon seller, and was affected by the account suspension wave. The company's big store was shut down. The boss must have mortgages, car loans, and debts to suppliers. When it was time to pay, the platform could not withdraw the money, and the capital chain was broken.

Soon this topic went viral among sellers. Regardless of whether the incident was true or not, as things continued to ferment, Amazon sellers became anxious, and the first sentence in the conversation became "Is the seller who drank pesticides real?"

There is no doubt that many Amazon sellers have hidden pressures behind their gossiping mentality. Everyone can't help but wonder: How did the Amazon platform become like this? Which big seller's account or brand is blocked today, which big seller's team is disbanded tomorrow, which big seller commits suicide the day after tomorrow ... Many sellers now have a fear of the platform. Will anyone dare to violate the rules easily in the future?

This may be the effect Amazon wants to achieve. As long as sellers violate the rules, they will not be able to escape the tragedy of being held accountable later.

Amazon's crackdown on violations and the banning of multiple accounts is not just a warning to others, but a real action, which is one of the important reasons for sellers' fear. As the banning incidents escalate, both new and old sellers have been hit hard.

Old sellers suffer, new sellers wait and see

Since the end of April, too many old sellers have been blocked. After the top sellers were hit, small and medium-sized sellers were blocked one after another. The actual situation faced by a seller: Everything was going in a good direction, but the brand was destroyed!

The news of Amazon's account blocking has spread outside the circle. Some sellers said that an old classmate recently came to express his condolences after seeing the news of the account blocking. He said that it was miserable to do cross-border e-commerce this year. Although the account was not blocked, the business was greatly affected.

Under the wave of account bans, low-price inventory clearance and price wars followed. As the epidemic situation became tense, freight rates in various channels rose sharply, especially for sea freight to the United States, and sellers' profits shrank severely. "I dare not calculate the profit in July. Because of the tight storage capacity in the European station, peers are all lowering prices, and there is no room for VAT deduction. The advertising data in the US station is becoming more and more difficult to control, and new products are almost impossible to promote." A seller was helpless!

At the same time, Amazon’s inventory capacity restriction policy has also made sellers anxious. Some sellers predict that the second half of the year will be more difficult than the first half.

This year, the goal of many old sellers has changed from doubling their profits to just surviving. Seeing this situation, new sellers dare not easily enter the market, and most of them just stop and wait and see.

Marketplace Pulse data shows that among the new sellers on Amazon in January, Chinese sellers accounted for 75%. On Amazon's US site, the proportion of Chinese sellers increased from 28% in 2019 to 63% this year.

The Shenzhen Cross-border E-Commerce Association estimates that since May, at least 50,000 Chinese sellers have been affected by Amazon’s account suspension, with economic losses exceeding 100 billion yuan.

In January, new sellers were full of confidence. In the past two months, many people have asked: "Is it a good time to enter Amazon this year?" Some old sellers said frankly: "The pressure to enter this year will be very high. If you don't have the strength, you should change your career as soon as possible."

Among the sellers who have joined Amazon, some are factory owners who have transformed themselves with the support of the supply chain. With the idea of ​​opening up new markets, they plunged into Amazon, but after entering the market, some people found that the reality was far from their expectations. "Give yourself another chance in the second half of the year to see if Amazon can succeed. The current order volume is not enough to pay the factory employees." said a factory-type seller.

Compared with factory owners who open stores and sell directly on Amazon, another group of bosses who feel the halo of Amazon's industry and regard cross-border sellers as their financial sponsors have now become the "kings of paying the bills."

The financial sponsor becomes the source of trouble, and the suppliers suffer

@风中厂长, who runs both a factory and Amazon business , recently posted on Weibo that he has been cooperating with a major Amazon client for three years. The client company has thousands of employees. The factory manager gave the other party a one-month payment period, but this time (the payment for the goods) has been delayed for more than two months.

"What's even worse is that the finished products that he rushed out last month, more than 30,000 pieces, and more than 20,000 semi-finished products, are now not being shipped. He said he wanted to change the packaging and remove the small cards, but after removing them, they still haven't been shipped for two weeks." The factory manager said. According to his check, there is no problem with the seller's account, but the price has plummeted.

"The boss doesn't even respond to me on WeChat anymore. I remember at this time last year, they were full of energy and the company was working hard, saying they were going to go public this year. Now it seems that's out of the question."

There are more than one or two suppliers who have been hit hard by the Amazon effect. Industry insider @Nancy鱼姐 also told a case.

A factory owner in Guangdong cooperated with an Amazon seller last year. Everything was fine at first. Later, the seller added 100,000 products and gave a 5% deposit. The boss was overjoyed and thought that he could make a fortune this year by relying on this order. As a result, the seller spent all his money on Amazon advertising traffic. When he wanted to ship the goods, he couldn't order a warehouse. Then Amazon checked the store, and the cash flow was broken. He had no intention of shipping the goods, and didn't want the deposit. He didn't pick up any goods, leaving a pile of finished and semi-finished products. It is estimated that the cost of a product is at least 20 yuan, and at least 2 million yuan is gone. The seller ordered 500,000 of the same product from another factory in Jiangsu, and now it is piled up in the warehouse, and 10 million yuan was cheated.

Last year, due to the pandemic, cross-border e-commerce developed rapidly, and many suppliers smelled business opportunities and decided to take advantage of this opportunity. However, the situation was reversed when the account blocking wave hit, and factory owners who thought they would be overwhelmed with orders were almost unable to pay wages.

In order to minimize the damage caused by the account being blocked, many suppliers have stopped giving credit to cross-border sellers. The head of a furniture company in Dongguan said that due to the Amazon account blocking, the company has more than 1 million yuan in outstanding payments that cannot be recovered. "Due to the special market conditions this year, we no longer dare to give credit. Now we require cash for all those who come to pick up the goods."

For factory owners, cross-border sellers were once high-quality customers who paid quickly, made fewer samples, had quick sales, and did not inspect the goods. But now they are clearly high-risk customers.

The industry is in trouble and the value of operations has plummeted

At the beginning of the year, Amazon was at an all-time high, with entrepreneurs from different industries everywhere. In order to gain a foothold on the platform as quickly as possible, these companies spent a lot of money to poach operators, and the base salary of experienced and high-quality operators once exceeded 20,000 yuan, which was astonishing. Old sellers who have been in the industry for several years also said that it was difficult to recruit people due to the magical situation.

Thinking that the golden age of the industry had arrived, some capable operators left to join new seller companies to expand their business; those who had the funds simply started anew and opened their own stores to sell goods.

Tianze Information said that Amazon's business was booming at the beginning of this year, and the number of employees leaving to start their own businesses increased. In addition, due to internal reasons within the company, there has been a serious employee turnover since February. In half a year, the number of employees has been halved from nearly 2,800 to 1,400, of which nearly 280 employees at the supervisor level (including deputy supervisors) and above have resigned.

But this overheated momentum was dampened by a wave of account bans, and the tide receded.

An operations manager revealed that a colleague of his switched jobs to a company that had never worked for Amazon a few years ago. The base salary was 9k, but he never made it and was fired last week. "When I went to negotiate, I felt that everything was good, but in the end I became cannon fodder."

Another operator lamented that the crazy period before and after the New Year misled many people. "There are several people in our company who have only worked for a year or so with a salary of more than 15k. They thought the money was blown by the wind. As a result, they couldn't find a job after going out. They reviewed their resumes every day for two or three months."

A platform storm burst a lot of bubbles.

Amazon's fall from grace

Last year, Amazon's performance soared during the pandemic, making it a legend and attracting countless visitors. After more than three months of rectification, the platform has shown a grim face. It is not a place where you can pick up money without any troubles. It has strict rules and is full of twists and turns. Only those who have higher technical and financial levels can get a share of the pie.

Amazon has lost its glory and stepped down from the altar. But it is still huge and one of the best choices for Chinese sellers to go global.

According to eMarketer, sales on the Amazon platform will account for 41.4% of all retail e-commerce sales in the United States in 2021, and Amazon's e-commerce sales will reach US$386.4 billion by the end of this year. Based on average figures, Amazon will earn about US$1,800 from each American consumer this year. This is of great appeal to cross-border sellers.

Cross-border e-commerce is still a sunrise industry. Taking Shenzhen, a cross-border e-commerce hub, as an example, customs data show that in the first half of this year, the value of cross-border e-commerce goods supervised by Shenzhen Customs exceeded 100 billion yuan, exceeding the total volume of last year and continuing to lead the country.

This is still fertile ground, but with the account ban incident as a turning point, this market seems to only welcome high-level players.

Amazon, suicide, account ban