Another company's main brand was closed, or layoffs and 20% salary cuts

Amazon's rectification is still ongoing as news of account closures continues. This week, a seller in the industry had its main account blocked, and its main brand was also banned, making a large number of products unsalable. The company will face personnel and salary adjustments.

Most sellers’ accounts are still safe, but sales in July were dismal, and many sellers reported that orders were sluggish in August. The reason is that there are too many low-priced clearance products, so that even listings with five-star reviews on the homepage still have no orders even after coupons are applied.

The main brand was blocked, and another seller was in a critical moment of life and death

This Wednesday, a seven-year-old company in the industry issued an internal notice in which management informed the company that its Amazon account and brand had been blocked, and stated that the company would enter a difficult three months.

Before the notice came out, there were rumors and speculations within the company about the account being blocked. On August 4, the company spoke openly about the matter.

It turned out that last weekend, several of the company's main accounts were closed by Amazon, and early Wednesday morning, the company's main brand was also banned by the platform. The direct result is that most of the company's products cannot be sold, and a large amount of inventory is stranded overseas.

The company's main focus will be to deal with these overseas stocks and replace links and stores, but this will be a long process. "In the next 2-3 months, the company will face the problem of loss of revenue and surge in expenses. In other words, the company has reached a critical moment of survival," the company's management said in the notice.

The company has also given some thoughts on the sudden rectification.

"After experiencing the abnormal frenzy caused by the epidemic from last year to the beginning of this year, the platform suddenly launched a severe attack on China's medium and large sellers this year. Many sellers lost their huge assets overnight, and even became history. When the wave receded, it was discovered that everyone was swimming naked.

The foreign trade e-commerce industry is a seemingly vibrant emerging industry, and many traditional economic theories or management experiences are often invalid here; at the same time, it is also a special industry with unpredictable changes, and the policies change repeatedly every year, and the industry situation is unpredictable. "

The company concerned said that it had no intention of commenting on the platform's practices, nor did it want to discuss Sino-US political relations or economic and trade situations. Since its establishment in 2014, the company has started from scratch and encountered many difficulties along the way, but it has faced them head-on. This time, the company is not discouraged, nor will it back down. It will actively take measures to reduce losses and shorten the battle line, and it hopes that it will overcome the difficulties.

The next three months will be the darkest time. The company may lay off some employees and temporarily cut salaries by about 20% across the company to increase revenue and reduce expenditure.

The company said that this was a decision made under duress for the survival of the company. After overcoming the difficulties, it will consider other forms of compensation for the salary losses of colleagues in the past few months, and hopes that they are willing to help each other and overcome the difficulties together.

In fact, judging from the way many sellers in the industry have handled their accounts, when the company is greatly affected, most companies will inform internal employees of the account suspension in advance. In addition to hoping that the backbone can stay together to get through the difficult times, for employees who are unable to be hired, the company will also recommend them to find a job in advance after considering layoffs to avoid a long window of time. Appropriate compensation will also be given to dismissed employees.

Regardless, the impact of account suspension on companies and employees is huge. Account suspension issues are frightening, and recent orders are also giving many sellers a headache. As the peak season approaches, there is no sign of a boom in orders.

Sales in July were dismal, and orders in August were still cold

In early August, many Amazon sellers checked their July reports. Many of them described it as unbearable to look at. One seller said, “The battle in July was a bit brutal!” The following two points made the sellers unbearable to look at:

1. Poor sales. One seller said that the advertising expenses remained the same, but the sales dropped by 200,000 yuan. There are more than one sellers who have experienced the same situation. The feedback from others is nothing more than: the orders are sluggish, not as good as the same period last year, and some are even less than half of the same period.

2. Profits have shrunk significantly. Under the price war this year, it is almost a consensus among industry insiders that profits have shrunk significantly. The editor randomly asked and found that more than 80% of sellers have seen a decline in profits. One seller said that sales increased by 30 percentage points year-on-year, while net profits decreased by 90 percentage points year-on-year.

When the July data was dismal, some friends boldly predicted that the August report would be even uglier.

Entering August, many sellers have reported that orders are colder than in winter! On August 1, a seller reported that orders were half as low as usual; on August 5, another seller said that orders today were cold as water. Recently, more sellers have reported a decline in orders↓

“—Orders are few;

——The number of orders has plummeted;

——I dare not look at the orders at all, and I suspect the store has been closed every day;
——It turns out that everyone is the same, no one is single. "

Orders are sluggish. The reason is that many sellers believe that there are too many products to clear their inventory and even more products are in a price spiral. According to an industry insider, products in multiple categories on Amazon are in a price spiral.

Products with 5-star reviews on the homepage are not sold, and sellers are trapped by low prices

"The listing has a score of 4.8, the front page is full of five-star reviews, there are many customer reviews with pictures, and the coupons are given, but there are still no orders? I am so angry!" A seller was very helpless. Some people pointed out that the reason may be that the coupon you gave is too small. If the coupon is cancelled, the order data will collapse immediately. Some sellers cancelled the coupons, and the orders dropped from 14 orders the day before to 2 orders.

Good listings are not getting orders, and the orders for previous hot products have also slowed down. A seller posted on Zhiwubuyan: "The results of posting outside the site to get orders are unbearable to look at. Even the orders for hot products at 50% off are average. The fees of regular deal sites are very expensive, and the exposure is reduced. I can't afford to advertise on the site, and the results of flash sales are average. The 50% off outside the site plus the posting fee of about 1,000 RMB can't get many orders. There are low-priced products in several categories of BSR that make me question my life."

When prices are involuted, many sellers have set their sights on off-site promotion. Recently, the number of people posting off-site has increased dramatically, and the posts are lost too quickly, so the overall effect is not ideal, which is also a headache for everyone.

When sellers are clearing out their inventory at low prices, the current 50% discount may not be the same as before! The dilemma of the low-price spiral has trapped all sellers, and no one can make money in the long run.

The low-price spiral that causes sellers may be related to the overall global consumption situation this year.

Amazon's growth is also slowing as global lockdown restrictions ease. Even though the company moved its Prime Day promotion forward to June, its total sales in the second quarter of this year were still lower than expected, and this was Amazon's slowest growth since 2019.

Amazon's chief monetary officer Brian Olsavsky said the slowdown "is largely based on the impact of COVID last year, which was a surge in demand for online purchases. And the easing of lockdowns means individuals are doing additional things besides buying." He also noted that spending by Prime members has "slowed."

As the overall growth environment slows down, sellers’ orders will inevitably be impacted. Coupled with the panic of account suspension, the number of sellers clearing their inventory in the second half of this year may continue to increase, and the low-price spiral may continue for some time.

Big sales, Amazon, salary cuts