Follow-up to Amazon’s account suspension! Platform traffic plummets, Chinese sellers suffer internal damage

Amazon’s account ban wave continues. Under the heavy hammer, thousands of products are piled up and shipping prices have skyrocketed. How many sellers can continue on this path ...

Follow-up to the account suspension wave: Inventory backlog, freight rates soaring, sellers posting "sky-high" ocean bills

Nowadays, if you want to "get rich overnight" or "buy a house overnight", it is almost impossible to go through Amazon. Today, the "competition" on Amazon is extremely fierce, and the most real situation for sellers is to survive in the cracks.

Previously, due to the impact of the epidemic abroad and the rise of many e-commerce platforms, foreigners' spending power has long been reduced, and the recent Amazon account suspension wave has dealt a heavy blow to sellers. Advertising costs have skyrocketed, order volume has declined, big sellers have been banned one after another, and freight rates have soared. The cross-border industry has long been turbulent.

Recently, the editor learned from the seller group that many sellers are stumbling over inventory issues . Last year, many sellers had great harvests, so they started to stock up early this year. But now, the high storage fees have overwhelmed the sellers, and the storage capacity issue is also in front of them, so sellers have no choice but to start clearing out their inventory.

The account suspension wave affected not only a small number of goods, but also tens of thousands of goods that were piled up. If sellers acted a little slower, they might lose both their money and goods, and they had to bear the risk themselves. Sellers raced against time to deal with their inventory, and a price war broke out.

Some sellers said angrily: "It is impossible to lower the price. Since I can't sell them, I will set a high price." But most rational sellers said: "This will cost a lot of storage fees every month. If they can't sell, they should be disposed of as soon as possible!"

On one hand, sellers are busy dealing with inventory; on the other hand, the cross-border logistics market is also not optimistic, with serious problems such as difficulty in booking, high freight rates, and congestion. The market price of ocean freight to the United States is even on par with air freight prices . Ocean freight prices have become the biggest headache for sellers and freight forwarders, and the entire cross-border industry is complaining.

One seller posted a "sky-high" shipping order, with all the fees adding up to about 20,000 US dollars, equivalent to nearly 130,000 RMB. Sellers also said, "The price is ridiculously high, it has increased more than a little bit", "Is it because the freight forwarders are starting to take advantage of the familiarity?"

Faced with the sellers' doubts, freight forwarders can only sigh helplessly. One freight forwarder said: "It is already very difficult to receive goods normally. Everyone knows how much the cabinet prices have increased. It is difficult for us to do business."

Amidst many difficulties, the cross-border e-commerce industry may face more uncertainties. Can the inventory and freight rate issues affected by the account blocking be further resolved? What choices will sellers make?

With platform traffic plummeting and profits plunging, can Amazon still make money?

Since August, many sellers have reported that traffic has continued to decline. Whether it is exposure, order volume or click volume , they have been cut in half, less than half of the same period last year. Sellers said, "Many products have almost no traffic", "Traffic has obviously decreased significantly recently", "Big sellers can't stand it, how can small sellers stand it". Some industry insiders said that Amazon platform traffic has dropped by at least 40% .

At the same time, sellers are no longer surprised by the "shrinking" of profits . One seller said calmly that at least 80% of sellers have seen a decline in profits this year , which is not surprising. Another seller said: " The net profit has dropped by 90 percentage points year-on-year , which is extremely scary! "

On the Amazon platform, traffic is undoubtedly a very important factor, and even directly affects the store's final revenue. Now facing Amazon's large-scale account bans, survival has become a problem, and it is even more difficult to make money.

But there is one cross-border big seller - Savi Times , which can "live happily" in today's environment . After closing thousands of stores on third-party e-commerce platforms, it can still achieve a surge of 400 million in net profit .

Compared with 2020, the operating income of Savitech increased from 2.245 billion yuan to 5.253 billion yuan in 2018, and the net profit increased from -6.633 million yuan to 450 million yuan. In two years, Savitech not only achieved the transformation from debt to profitability, but also multiplied its net profit several times!

For Savi Times, even if it loses a lot of revenue from third-party stores, it can still maintain a leapfrog development. This is inseparable from Savi's transformation and development strategy : while developing third-party platforms, it increases investment in self-operated websites in vertical categories and develops its own brands to bring it long-term and continuous traffic.

Can independent websites become a new way out for sellers? A seller with annual sales of 1.6 billion has set up 15 independent websites

The cross-border e-commerce market is currently undergoing a huge change. As Amazon cracks down on Chinese sellers, sellers should change their mindset appropriately instead of placing all their bets on third-party platforms such as Amazon.

After the account closure wave, the most popular call is undoubtedly to develop independent websites. So can independent websites become a new way out for sellers? A big seller with annual sales of 1.6 billion gave his answer.

In the Amazon account suspension incident, Hanwang Technology said that the suspension had little impact on the company. While complying with Amazon platform rules, Hanwang Technology focused on multi-channel development, not only developing other third-party e-commerce platforms besides Amazon, but also actively developing independent websites. It already has 15 self-built independent websites, and the sales and proportion of self-built websites are gradually increasing.

In addition to this big seller, Tongtuo Technology, which had 54 Amazon stores blocked , also learned its lesson in time, increasing the sales share of other e-commerce platforms, while increasing investment in Tongtuo Technology's own website.

In fact, while Amazon's big sellers have been cut one after another, sellers who mainly sell on independent websites are thriving on the other side. Recently, independent website sellers such as SHEIN and Xike have frequently received attention. While Amazon is in chaos, they have frequently received financing and have not stopped their pace of development.

Therefore, for Chinese sellers, multi-channel development is very important. While making profits through third-party stores, independent websites are also another direction for sellers to develop. In this regard, industry insiders pointed out that in the next three years, cross-border sellers, whether they are platforms or not, will definitely have an independent website. In addition, grocery websites that sell counterfeit brands or products that are not the same as the ones sold will gradually be replaced by vertical websites.

Independent sites have been pushed to the forefront, but some sellers have questioned this. Building an independent site is indeed a good direction, but it is also very difficult and requires a huge initial investment, so it is not easy to develop.

Building an independent website does have some difficulties, but from a long-term development perspective, it is a good move. In fact, the account blocking wave caused by Amazon has made the country attach great importance to the healthy development of the cross-border e-commerce market and has begun to help Chinese sellers resolve this crisis.

On August 5, the Shenzhen Municipal Bureau of Commerce issued a relevant notice to support cross-border e-commerce enterprises with certain strength in the China (Shenzhen) Comprehensive Cross-border E-commerce Pilot Zone to establish independent sites, strengthen market development capabilities, and provide comprehensive supporting services for enterprises to develop markets through the construction of overseas warehouses. It also provides support for their applications, with a single project receiving a grant of 2 million yuan, and the maximum reward for a single project application can be as high as 3 million yuan!

This move is undoubtedly a major affirmation of the country's development of the independent station business model. It is also a suggestion given by the country to sellers based on the current development status of the cross-border e-commerce market, and it reduces the difficulty of building websites for sellers.

After multiple rounds of Amazon bans, the pros and cons of Amazon and independent websites have become apparent, and many sellers have realized the importance of independent website layout. In the future cross-border e-commerce market, independent websites are bound to become more popular.

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