Sellers with hundreds of millions of sellers are selling their stores. Is the "selling oneself" craze coming in the Amazon circle?

Among the many overseas markets, Amazon is the first choice for many sellers, but many sellers have become "Amazon-dependent" due to excessive investment. In the recent wave of account suspensions, several listed sellers have been questioned about their account status.

Some sellers are considering spreading their risks or locking in profits. Recently, people have started discussing, "If capital buys your Amazon business for dozens of times the monthly net profit, will you sell it?" Some sellers said they were unwilling to take further risks and wanted to sell their Amazon business to save their "thriving" business. A wave of "selling out" seems to be coming.

Big sellers generally have "Amazon addiction"

As the most powerful third-party platform for cross-border e-commerce, Amazon is the first stop for most cross-border people to go overseas. In the subsequent development, even if new sales channels are developed one after another, the main source of revenue for many sellers is still Amazon, or the proportion of revenue from this channel continues to increase, and the industry's top sellers are no exception.

From the public data of the big sellers that have been listed or are about to be listed, we can see how much domestic sellers rely on Amazon. In 2020, VeSync (the parent company of Morning North Technology) had an annual revenue of US$349 million, of which US$335 million came from the Amazon platform, accounting for 96%; Savi had a revenue of US$5.25 billion, of which US$3.68 billion came from the Amazon platform, accounting for 70.12%.

For some sellers, 70% to 80% of their revenue comes from Amazon, while for a few sellers this proportion exceeds 90%. "Amazon addiction" is almost the current situation of most cross-border sellers.

Before VeSync went public, it was pointed out that it faced great risks due to its reliance on Amazon. The big seller said that its reliance on Amazon was high, so if Vesync's relationship with Amazon was interrupted or there were adverse changes in the arrangement with Amazon, it could have a significant adverse impact on the company.

In the special risk warning of its prospectus, Suntech also recently listed the risks of high concentration on the Amazon platform and the risk of store closures.

Due to the recent wave of Amazon account bans, many top sellers have been asked whether their account operations are normal.

Huakai Creative was asked whether Yibai was at similar risk as some of its cross-border sellers were banned by Amazon. Giant Star Technology also received questions from investors: There are rumors that your company's Amazon store was also affected . Is this true? Giant Star replied that all of the company's direct stores on Amazon are currently operating normally.

Would you be willing to sell your Amazon business for 30 times the monthly net profit?

At the beginning of this year, countless outsiders came to Amazon, thinking it was a fertile land for gold mining. According to statistics, in January this year, sellers from China accounted for 75% of Amazon's new sellers, far higher than 47% a year ago.

But no one expected that this year's Amazon would start with hellish difficulty mode: insurance requirements in February, video verification in March, address verification in April, strict checks on fake reviews in May, strict checks on small cards in June, and account association at the beginning of July, accompanied by gradually tightened shipping restrictions throughout the process... Old sellers who have been struggling for several years still have to frown and deal with it carefully, and new sellers are even more at a loss. Some have sold their accounts and quit the circle because they could not bear the pressure.

Previously, industry insiders stressed that "we are engaged in cross-border e-commerce, not Amazon", and advised peers to spread risks and not to rely too much on a single channel. Now that Amazon has been hit by several big waves, many sellers agree.

Some sellers consider spreading the risk, while others just want to lock in the profits. A popular way right now is to sell their Amazon business.

At present, some high-quality domestic sellers have received capital offers, and a few of them have been acquired.

“If capital were offered to buy your Amazon business for 30 times the average monthly net profit of the past year, would you sell it?” To this question, most sellers responded with “must sell”.

These sellers said : "Sell, sell, sell, after selling, I will directly do financial management, who would worry about Amazon?" "Why not sell, so that I can get a house in Shenzhen, wouldn't it be better to create a new account?" Some sellers also think that it depends on the specific model of the company : "If it is a factory + e-commerce, it will not sell, but if it is a pure trader, it will sell."

Domestic and foreign sellers share the same idea on this matter. The BBC reported the cases of two sellers who sold their Amazon businesses.

Billion-dollar sellers sold their Amazon businesses

Michele Venton is an Amazon seller who made millions by selling her business.

Previously, Venton was eager to escape the workplace. She found a factory to make wrap skirts and put them on Amazon for sale. Unexpectedly, many people were interested in the skirts. She soon realized that this was a huge opportunity as long as she held on. Amazon's huge scale means that if the product and marketing are right, small sellers can sell a lot of products quickly.

In less than 4 years, her annual sales in Europe and the United States reached nearly 10 million pounds, which is roughly equivalent to more than 80 million yuan. This makes her a seller with a scale of nearly 100 million!

However, selling clothing online is not easy because there are too many sizing issues for such products, and Venton faces a lot of returns. In 2019, when someone offered millions to buy her entire company, she accepted it. Venton then started selling home furnishings on Amazon.

There are many cases like Venton. In the past year, the business of acquiring Amazon sellers has sprung up like mushrooms after rain, providing a new option for many sellers.

Another British seller, David Stephen, sells gardening tools on Amazon.

After working as a traveling salesman for many years, Stephen wanted to find a job that would allow him to spend more time with his family. His wife suggested that he sell things on Amazon, and he found what he thought was a niche market - gardening tools.

To find a supplier, he sifted through Alibaba for hours and eventually settled on a Taiwanese supplier, who set up a company, created the brand Davaon, and purchased $10,000 worth of pruning shears.

Later, pruners, shears and garden saws were added to his purchase list. By 2020, he and his wife's annual sales exceeded 2 million pounds, equivalent to about 18 million yuan. This is a seller at the tens of millions level!

However, as sales increased, they had to work 12-15 hours a day and work non-stop on weekends. If customers sent emails, they had to reply, plus they had to deal with the problems of purchasing, packaging and shipping. Stephen felt that he never had a break and the goal of living a more relaxed life was still out of reach.

Last year, when he received an offer to acquire his business, he initially thought it was a competitor, but later determined that someone wanted to buy his Amazon business, so he successfully "sold himself."

It is not easy to "sell yourself", the seller must meet these conditions

When seeing other sellers selling their businesses and getting a lot of money, some fellow sellers can't help but feel envious. Some sellers also want to sell their accounts directly, escape from Amazon and save their hairline. One seller said bluntly: "Sell, I will sell, I don't want to suffer from Amazon anymore!"

However, not all sellers can be favored by investors. Only those who meet certain conditions can be favored by investors. Generally speaking, the following types of stores can attract investors’ attention:

1. Sellers with high-quality products, whose products have a large number of positive customer reviews and can appear on the first page or the first few pages of the search page;

2. Sellers with profit advantages usually sell their products at prices lower than their offline counterparts, but their product profits are still higher than their offline competitors;

3. For potential brand sellers, the acquirer usually hopes to use more professional skills and resources to help potential brands develop faster and obtain high profits;

4. Sellers with fewer illegal operations and lower risks. Otherwise, if the Amazon account is blocked after receiving the goods, it will be a waste of money.

5. Sellers who are eager to leave Amazon, have had enough of the pain of packing and shipping, and just want to live a stable life and study hard for the exam, but they must meet the above four conditions.

Therefore, it is not so easy to successfully "sell yourself". One seller said: "I am a small seller, so I don't need to think about these things that have nothing to do with me. I should just do my own thing. Anyway, I will not be favored by investors."

Although they are willing to "sell themselves", some sellers can only imagine it when they look at their single-digit orders, products that are almost all negatively reviewed, and stores that may be related or have been warned with small red flags.

Amazon, selling itself