The account of Damayoukeshu also died. What was the reason for the death of the account? Accounts are banned every year, but this year there are more. Amazon continues to "kill, kill, kill", and well-known sellers in the industry such as Youkeshu and Zebao have been hit one after another. According to the previous announcement of Zebao's parent company, the reason why Zebao's Amazon account was blocked may be that it included gift cards in its products. After Zebao responded positively to the reason why its account was blocked, the big seller Youkeshu also explained the 12 reasons why Amazon accounts were restricted . In the latest announcement, the editor also learned that out of Youkeshu's total monetary funds of 199.4171 million yuan, 185.9201 million yuan was restricted funds. As if things weren't bad enough, a large number of Youkeshu's sites were closed down and hundreds of millions of funds were restricted. Yesterday, a video of Youkeshu being visited by its suppliers to collect debts went viral in the cross-border circle. It seems that in 2021, the big seller Youkeshu is in the same difficult situation as many small sellers.
A large number of sites were closed down, and the reason for the death of Youkeshu was revealed On July 7, 2021, Tianze Information disclosed an announcement showing that a large number of sites of its subsidiary Youkeshu were closed and restricted funds were frozen due to violation of Amazon platform rules . The latest announcement shows that after Youkeshu’s site was blocked and funds were frozen, a special working group was set up to communicate with the Amazon platform and actively organize people to file a complaint. According to the communication feedback from the working group, Youkeshu is mainly suspected of violating the following 12 Amazon platform rules : 1. Account information fails to pass the verification process; 2. Buyers complain that they have not received their orders or have received their orders late, and that the received goods are damaged or missing due to improper packaging, resulting in an order defect rate exceeding 1%; 3. Suspected of infringement; 4. Buyer feedback or existing sales history does not support the current sales volume ; 5. The current account is associated with an account that cannot be used to sell goods on this website, the associated account is not a Youkeshu account, or the associated account is marked as "Null" ; 6. Suspected of releasing a certain brand of goods without sales permission ; 7. Suspected of "abuse of ratings, feedback or comments", "abuse of sales rankings" and "abuse of search and browsing" ; 8. Failure to comply with the VAT requirements of the area where the product is sold ; 9. Complaints about “counterfeit or fake goods” ; 10. Suspected of publishing or selling counterfeit, fake, infringing, unsafe or deceptive goods ; 11. The actual delivery time of the order is later than the promised delivery time, or the uploading of logistics information is delayed, resulting in an order delay rate of more than 4%; 12. Logistics information is not updated in a timely manner, resulting in an effective logistics tracking rate of less than 95%. Summarizing the reasons for the above account closures, we can find that infringement, association, abuse of ratings, and untimely updates of logistics information are the main reasons for the demise of Youkeshu accounts. The association factor is not only an important factor in causing the tragedy of Youkeshu account closure, but also a difficulty faced by a large number of Amazon sellers recently. According to seller feedback, many Amazon sellers have been shut down due to account association issues. Some sellers were linked to email addresses, some were linked to brands, and some were linked to unfamiliar accounts. The reasons for association are varied, and even the omnipotent service providers are helpless.
Youkeshu’s restricted funds balance is as high as 185.9201 million yuan, and suppliers have come to its door to collect debts Youkeshu is a major cross-border seller with many accounts and a large company. The quantity of goods it stocks each time must be very large. Once its account is blocked, the consequences will be disastrous. After a large number of Youkeshu's accounts were blocked and nearly 1,400 employees left, Youkeshu had previously stated that its overall revenue in the first half of 2021 will drop by about 40%-60% year-on-year. Due to the decline in revenue and unsaleable inventory, Youkeshu's restricted funds have reached nearly 200 million yuan.
Data shows that as of June 30, 2021, Youkeshu's cash and cash equivalents amounted to RMB 199.4171 million, and the balance of restricted funds was as high as RMB 185.9201 million. As a result, Youkeshu's available balance was only RMB 13.4971 million. In addition, according to preliminary estimates, the balance of inventory impairment provisions set aside by Youkeshu in the first half of 2021 is expected to be between 500 million yuan and 600 million yuan. As the operating rules of the Amazon platform are becoming increasingly strict and the transformation of the Amazon business, which is the focus of development, is not ideal, the turnover rate of Amazon platform stores will decline; coupled with the unexpected shrinkage of the independent station business, the overall sales channels of Youkeshu products will be further narrowed. In response, Youkeshu said that it has increased the proportion of inventory impairment provision for electronic products, mobile communications and game accessories on the Amazon platform and health products and daily necessities for independent station business . After Youkeshu's business on the Amazon platform was hindered, Youkeshu stated that its cross-border e-commerce business on other platforms such as Wish and AliExpress maintained stable operations, and the monthly delivery revenue of the entire platform in the second quarter of 2021 has basically stabilized at more than 100 million yuan. Therefore, there is no major uncertainty in Youkeshu's ability to continue operations. Although Youkeshu stated that it still has the ability to continue operating, due to funding constraints, Youkeshu was still exposed to have defaulted on payments to suppliers . People familiar with the matter said that yesterday a group of Youkeshu's suppliers also began the helpless act of "collecting debts at the door". It is understood that the suppliers gathered in front of Youkeshu company holding banners that read "Youkeshu, pay me back for the goods". The on-site conversation did not seem to be smooth, and there was a physical conflict between the security guards and the suppliers. This is another time that disputes between a major retailer and its suppliers have been exposed, following the incidents of Global Easy Shopping and Zhiyu being visited by suppliers to collect debts.
Youkeshu's parent company wants to sell buildings to pay off debts Since 2019, Youkeshu's cross-border e-commerce business has become the main source of income and profit for Tianze Information. The obstruction of Youkeshu's Amazon business is a big blow to the parent company. In addition, Yuanjiang Information is an important wholly-owned subsidiary of Tianze Information. Its inability to operate normally has had a significant adverse impact on the listed company . Tianze Information is currently in a "very dangerous" situation. Tianze Information pointed out in its 2020 annual report that as of 2020, Tianze Information had cash and cash equivalents of 680 million yuan, of which 550 million yuan was restricted cash, including 470 million yuan in restricted funds of third-party e-commerce platform stores . As of March 31, 2021, the company's cash balance was RMB 405 million, and after deducting restricted funds, the company's available balance was only RMB 50.3566 million. The company currently has an interest-bearing debt balance of RMB 448 million, RMB 289 million of overdue bank loans, and the remaining loans are due in 2021, of which the parent company's loan balance is RMB 380 million and Yuanjiang Information's loan balance is RMB 68 million, with joint and several liability guarantees provided by the parent company. It is understood that in order to repay the remaining 89 million yuan of M&A loan principal and related interest under Minsheng Bank, Youkeshu's parent company will assist in initiating judicial procedures to auction the Tianze Star Network Building. However, if the actual progress of the subsequent disposal and realization of the Tianze Star Network Building and the shareholders' fulfillment of their performance compensation obligations is not ideal, the company will objectively still face the risk of cash flow shortage.
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