11 people in a 14-person department were laid off! Another seller quit Amazon

The big sellers are going through a crisis, and many sellers are watching from the sidelines. Currently, the domino effect caused by the sellers’ account suspension is taking shape: the company’s employees have had their salaries cut and stopped working, the operators have lost their jobs, and the entry standards for operators have risen; suppliers have begun to demand debts, and the factories that have just increased their supply lines for Amazon have suffered backlash; the unprecedented operating difficulties have made some sellers want to quit, and a wave of capital acquisitions has come... Amazon practitioners are experiencing a huge change in the industry.

The company's account was blocked at the first stop, and employees stopped working and had their salaries cut

For big sellers caught in the storm, after a large number of products became unsalable, the company's revenue shrank or even stopped. For sellers with large accounts that suffered serious losses, handling the huge employee relationships well and reducing the size as soon as possible may be the way to survive. Therefore, personnel adjustment is the first stop for many sellers after being hit.

It is reported that a major 3C seller in the industry has laid off more than 700 employees, leaving only about 30% of the employees to work as elite soldiers. This is the largest-scale personnel adjustment event known so far. Other sellers who have been affected are also following suit.

Recently, Paton issued a notice to suspend work for employees in some positions.

Paton said in the notice that the industry has undergone tremendous changes. Since the end of April, the company has partially alleviated the pressure after several months of unremitting efforts and difficult self-rescue. However, the company's historical main categories such as headphones and wireless charging have been severely impacted, and it still faces a series of challenges and pressures such as inventory turnover and capital circulation. "We have encountered a transformation in the development of the company and must make strategic adjustments, so we have to make some difficult decisions."

In view of the company's current strategic planning and actual operating conditions, as well as the objective conditions for the development of R&D and technical work, the students in the above-mentioned R&D and technical positions have no work arrangements for the time being. After research and decision by the company's general manager's office, the company's R&D functions will be suspended. From August 6, 2021, a six-month suspension and waiting arrangement will be implemented, ending on February 6, 2022. During the suspension and waiting period, students in R&D and technical positions do not need to go to work or provide labor in any form. In accordance with the relevant requirements of the Shenzhen Employee Wage Payment Regulations, the company will pay 80% of the normal salary in the first month, and 80% of the Shenzhen minimum wage from the second month until the end of the suspension and waiting period.

Although Patonson said that if normal operations are restored, they will be notified to return to work as soon as possible. However, for the R&D technicians who were suspended from work, the time cost of these six months is very high. According to 80% of the minimum wage in Shenzhen, the income for the next five months is only more than 1,000 yuan, which may not even be enough to pay the rent. Once the plan is released, these personnel are likely to find other ways out.

Not only the company's employees were affected, but Amazon's sellers and suppliers were also significantly impacted.

As the news of the account being blocked broke out one after another, the suppliers were all worried. Now that the account has been blocked, the possibility of a reversal is slim, and the suppliers who supply the products are under attack from all sides.

Titanium Media reported that the popularity of Amazon's cross-border e-commerce last year injected a strong stimulant into domestic physical factories, and many factories tilted their production lines and production capacity toward the Amazon chain. The better profits also led some powerful factory owners to increase investment in production lines, equipment and personnel.

Then the battle of blocking accounts started. Previously, the factory gave the big sellers a one-month payment period, and then applied for a one-month payment period from the upstream suppliers. But starting in April, the downstream Amazon sellers began to delay the payment, from one and a half months to two months and then to three months, until now it has become a bad debt. The factory was forced to lead the workers to chase and intercept the person in charge of the Amazon sellers to collect the debt.

The factories most affected by this round of bans are those with more than 100 workers and which have just increased their investment in Amazon's OEM business this year. According to estimates by senior insiders, more than 90% of them are facing desperate situations.

Even the wealthy big sellers have suffered a considerable impact, and the small and medium-sized sellers in the industry feel that a cold winter has arrived.

11 out of 14 people in the department were laid off, and another seller chose to withdraw

Under Amazon's heavy-handed crackdown, some sellers can no longer bear the pressure. An industry insider said that he heard that a friend of his no longer works on Amazon. There are more than 20 people in the two teams in Shenzhen and Wuhan, and now only one person is left to work on other platforms.

"It's really difficult for Amazon sellers this year! My friends and I are struggling. Old products have no profit, many categories are in a low-price spiral, new products cannot be promoted, factories don't give credit terms, funds cannot be turned around, and we worry all day that the account will be shut down one day. My friends and I are ready to quit at any time." The seller Mr. Zhou said helplessly.

When sellers withdraw from Amazon, or some sellers lay off a large number of employees after problems with their accounts, many cross-border practitioners will lose their jobs.

An industry insider revealed that a company laid off 11 people out of 14 in a department! The most surprising thing was that the company's HR talked to the laid-off employees and asked them to write personal reasons on their resignation agreements, so that the resigning employees might not be able to receive unemployment benefits.

This wave of operations is really ugly! Many of the operators who were dismissed are currently unemployed, and many of them have been unable to find new jobs for more than a month.

Amazon operator Xiao Z said that he and several of his friends are currently unemployed. Some of them were laid off due to problems with their company accounts or due to poor performance. Among them, Xiao Z was laid off in mid-June this year, and his former company reduced the number of employees from 38 to 15. He is still unemployed, and several of his familiar friends are also having trouble finding jobs.

With many operations being cut, some companies are raising their hiring standards.

Xiao Z has seen a lot of job openings, and what he finds outrageous is that the requirements for Amazon operations have been getting higher and higher recently. The base salary for operations assistants was 6K-7K, and fresh graduates or people with six months of experience previously met the requirements, but now more than two years of experience are required. "Amazon operations recruitment is outrageous now!" Xiao Z said helplessly.

Some sellers choose to withdraw, while others can successfully land. At present, the acquisition boom in the Amazon seller circle is still continuing, and many acquirers have emerged this year.

Acquirers are raising billions to buy Amazon sellers

According to foreign media reports, Amazon acquirers are in the midst of a buying frenzy. They are trying to attract sellers with successful brands on Amazon through incentives such as Tesla giveaways and exclusive parties.

Some of the larger acquirers, such as Thrasio and Perch, have valuations in the billions of dollars.

“If you can make a deal, give us a Tesla, or just negotiate a commission,” said Casey Gauss, vice president of Thrasio , which has raised $1.75 billion and acquired more than 125 Amazon brands since its founding in 2018.

Following the success of Thrasio and others, the number of acquirers has grown rapidly in the past few months. According to Marketplace Pulse, there are now at least 69 Amazon acquirers based in at least 12 countries, and they have collectively raised more than $7 billion since April 2020.

"Micro-brands have been taking off for a long time, and I think they are now at a turning point. Amazon's market has become more mature, and many people have noticed this after the epidemic," said the head of an acquisition company.

As more acquirers enter the market, more sellers will exit, some will be acquired and others will be forced to disappear. A new trend is taking shape on Amazon.