A novice seller invested 400,000 yuan and ran out of funds. Don’t fall into these traps...

When talking about Amazon, people think more of "the house at No. 1 Shenzhen Bay". However, many companies have collapsed overnight after several years of entrepreneurship due to broken capital chain, infringement or other problems.

A seller with annual sales of over 10 million failed due to capital chain problems

Someone once said that it is not difficult to place orders on Amazon and there are many opportunities to make money, but eight out of ten companies that eventually run into problems fail due to their capital chain.

The seller I’m going to talk about below failed because of this.

On a certain audio platform, a seller told a case in which her friend partnered with others to sell women's clothing on Amazon FBA in 2018. The sales volume reached more than 30 million in two years, with about 20 employees.

"Because we sell women's clothing, the return and exchange rate is too high. Although the annual sales volume is more than 10 million, the cash flow is broken due to seasonal sluggish sales and chaotic replenishment rhythm of overseas warehouses. After more than three months, several partners were unwilling to support it and the company went bankrupt."

Another seller who also entered the market in 2018 encountered the same dilemma. The seller had been in the market for half a year and had invested more than 400,000 yuan in products alone. In the end, due to various reasons, the capital chain was broken and he could no longer develop new products. He could only sell out the existing FBA products and take some money back to pay for rent and living. "Or go work somewhere for a year first. By then, your experience and mentality will be more mature than the first time, and you will not be so adventurous and reckless."

At an industry forum, a seller also helplessly expressed the financial pressure he was facing. He said that he and two other people started a business together. Now the capital chain is tight. They are preparing to make additional investments, but one of them said that he has no money. "Without investment, the capital chain will soon break. The factory is urging for the final payment every day, and the account cannot be withdrawn so quickly. Seeing that the performance is rising every month, I don't want to give up all my previous efforts because of the problem of funds."

Heavy losses! The seller lost more than 1 million yuan due to mislabeling

There are countless examples of sellers losing money on Amazon. Many sellers have lost hundreds of thousands of dollars due to some unavoidable details. Everyone knows some of the pitfalls, but they can't avoid falling into them.

A seller lost more than 1 million yuan due to incorrect labeling .

This seller's products are produced in cooperation with factories. In addition to creating the shipment, the factory will complete the remaining processes for him, including packaging, labeling, testing and contacting freight forwarders, etc., all of which are handled by the factory. Many sellers choose the factory cooperation model, and problems also arise from this.

The factory mislabeled the seller's goods, which increased the cost of moving, relabeling, and re-warehousing, resulting in a loss of more than 1 million yuan. In addition to the financial loss, a lot of time was also wasted. If it were a seasonal product, the cost would be even higher.

Working on Amazon is no longer a way to make money without any effort. Instead, you will suffer huge losses due to various carelessness.

For example, this seller accidentally did not change the unit of measure when filling in the size parameters. The correct unit of measure was actually cm, which resulted in a loss of more than $100 for each piece sold. The logistics costs, product costs, and operating expenses added together, calculated based on 100 pieces a day , is equivalent to a loss of 100,000 yuan a day.

For a new seller, this is not a small amount of money. If you encounter such a thing, you may be frightened and panic. Although you can make up for it later, such mistakes should be minimized.

Are newcomers under great financial pressure? Huafuda is here to help

From the above content, we can see that doing business on Amazon is not as simple, easy and quick to make money as everyone thinks. On the contrary , it has high technical risks and great financial pressure. At the same time, there are pitfalls everywhere that can put your capital chain at risk at any time.

As we all know, there are many new sellers entering Amazon this year. If there is no sufficient capital as a guarantee, they may exit the market at any time due to a broken capital chain.

The editor learned about a channel dedicated to cross-border e-commerce financing. Huafuda has established business cooperation relationships with a number of state-owned banks to provide unsecured and unsecured pure credit loans to export e-commerce companies. It can be used for both public and private purposes, with a maximum amount of up to 10 million yuan, an annualized interest rate of 3.85% to 9.86%, and flexible repayment methods.

As soon as the product was launched, many e-commerce companies have inquired about it. Huafuda will match different loan products according to the actual operating conditions of e-commerce companies. The entire approval process is fast and simple, meeting the funding needs of e-commerce sellers in the first place.