Top sellers slash prices! A large number of Amazon sellers start clearing out their inventory

Recently, the price war on the Amazon platform has intensified. There are two reasons for this: newcomers want to seize the market with low prices, and old sellers want to clear out their inventory, collect payments, and increase storage capacity.

There are price wars in many categories. If it is still acceptable to say that newbies want to snatch users at a loss, then the fact that many top sellers have begun to slash prices is a bad signal. Some sellers analyzed that this round of selling goods at low prices will lead to a chain reaction of a new round of price wars, and many sellers will be swept up by the trend.

Considering last year’s excellent sales, many sellers were too optimistic in stocking up. Now, a large number of sellers have started to return goods and clear out their stock. Combined with the big seller account suspension incidents and the industry-wide clearance sales, some sellers believe that the industry has reached a turning point.

Price war + storage capacity restrictions, many sellers started clearance sales

At present, price wars have almost become a nightmare for most sellers. Newbies and veteran sellers are all lowering their prices, and some sellers are already scratching their heads: What is happening on Amazon?

According to the analysis of sellers, there are two main reasons for the increasingly serious price war:

1. Selling old goods at low prices to clear them out and collecting money to increase storage capacity

A seller witnessed an incredible scene:

The purchase price of the same model is estimated to be 35-50 yuan . There is a big seller who has been selling it for many years, with more than 10,000 listing reviews, and it is estimated that there are about 60-70 orders every day. The original price was 19.99, but now the price has been slashed to less than 15 US dollars, and a 50% coupon has been added! At this price, the cost can't even be recovered by half.

In addition, the seller found that after looking around, most of the products were on big price cuts, with some offering $5 coupons, some offering 30%-50% coupons plus prime discounts, and some offering direct price cuts of more than 20%, all of which were clearing out their stock.

Another seller agreed: "When our category is selling well, we cut prices very aggressively. We also have a lot of inventory. We insisted on not lowering prices for more than ten days, and our listings were almost killed, so we had to follow suit and lower prices. "We'll have to wait and see. When the big sellers raise prices, we can raise prices and make money."

Amazon has been reducing restrictions on storage capacity, and many sellers can no longer bear it. Short-distance shipments to replenish stocks and stocking overseas warehouses cannot solve the problem for sellers. Thinking of Amazon's principles for adjusting storage capacity, many sellers have begun to clean up products with poor sales, selling them at low prices or running a lot of advertisements. On the one hand, they hope to free up space to speed up payment collection, and on the other hand, they hope that the next adjustment of storage capacity will increase.

However, referring to the recent inventory adjustments, some sellers have good sales but still have their inventory cut. Some sellers analyzed that selling goods at low prices, soaring advertising fees, and declining orders are only the initial stage, and there will be a chain reaction in the later stage, leading to a new round of price wars. And many sellers will be forced to take away by this rolling trend.

2. Newbies grab the market with low prices

As there are many new sellers this year, many of them cut prices in half as soon as they enter the market, raising CPCs based on the theories they learned before entering the market, causing their fellow sellers to complain.

Sellers constantly complained: "Looking at the prices of new products offered by my peers, I really have no intention of making new products. There is no profit at all. I am just doing charity." "There are always some sellers who will lower their prices after you until you lose your temper."

The price war within the category was fierce, and overseas buyers also began to compare prices. In desperation, the old sellers had to make concessions. "Competitors left the market for a while, and in the past few days, more than a thousand products have come back, suicidal price cuts, which has brought down the conversion rate of my products. My 33 yuan price is trembling when I look down at the 19.99 yuan."

How serious is the current price competition in the industry? A foreign trade person mentioned a strategy in the industry: some trading companies will contract small factories and give you 500,000 yuan a year to make money. For some orders, you just follow my price. The market price is 1 yuan, and you just give me 70 cents... "Who can do this? Is this something that people in the world can do? At that time, I knew that price competition had no future." He said.

A large number of clearances and order returns indicate that the industry has reached a turning point

Under the general situation, many sellers began to clear their stocks at low prices and even canceled orders multiple times.

One seller said that during this period, many suppliers reported that their orders were cancelled. Last year, due to the epidemic, many sellers were extremely optimistic about the future stocking plan, and with the influx of a large number of sellers, they had to cancel many orders one after another.

Clearing the inventory is a headache. One seller said that the price quote for clearing the inventory was enough to make people fuming: the cost was 12, the first-leg freight was about 7 yuan per piece, and the final quote was 0.5 US dollars.

Combined with the current situation in the industry, a seller analyzed that the industry has reached a turning point. In the past, it was a race, and everyone could run no matter how fast or slow they ran. Now it is an elimination match, and people will continue to be eliminated in waves! He believes that the signs of the turning point are:

1. The industry's top sellers experience cash flow interruption, main accounts are blocked, etc.

2. FBA storage capacity has shrunk dramatically and tightened across the board. Without storage capacity, there is no way to develop;

3. The exchange rate begins to fall sharply, and breaking 6 is imminent;

4. Due to the industry-wide clearance sale caused by inventory capacity, the overall customer unit price will begin to decline sharply, the high profit period will end quickly, and it will be difficult to raise prices;

5. A large number of new sellers are here to serve as cannon fodder. Old sellers have already entered the survival stage, and there is really no room for new sellers to develop.

The seller said that he often sees some domestic sellers on Douyin seeming to be very good, and they plan to lose millions of dollars first. I think those who think so are stupid. Because it is difficult to make it back after losing money, and don’t think you can lose more than the old sellers on Amazon. Old sellers are experienced and have many resources. They have many old listings to supplement their blood, and they have made more money than Taobao in recent years. I advise factories and domestic sellers who want to open up the situation by burning money to first think about how much capital they have to participate in the current situation!

Looking ahead, the Amazon world is already in turmoil.

Some sellers are struggling with inventory clearance and price wars, while other sellers have received warnings for review manipulation. Has Amazon really entered a zero-tolerance mode?

Many sellers received warnings about review manipulation , and Amazon started strict inspections

In May, the news that the super seller in the industry was banned came, and the sellers in the industry were trembling. Later, Amazon officially issued an email to all sellers, which was regarded as a response to the suspension of the super seller's account. The first sentence of the email directly mentioned: Amazon's policy has always clearly required sellers not to abuse reviews. Then some sellers speculated that this means that the platform will strictly investigate the abuse of reviews in the future.

Strict investigation may have come. In the past two days, many sellers have received warnings for manipulating reviews. The warnings are roughly as follows: "We understand that you are suspected of manipulating Amazon buyer reviews. If sellers attempt to manipulate reviews, we will investigate, and if this problem persists, we may ban you from selling on Amazon."

An Amazon seller who received the email said that the reason for receiving the warning email was that he wrote words such as review in the backend internal message and was recognized by Amazon. He had not made any orders for nearly a month, and wanted to get a few top reviews, but was caught.

Another seller who was scammed mentioned that he had recently received a bad review, so he posted a few five-star reviews in order to dilute the bad review. As a result, he was caught by the platform and sent a warning letter.

Judging from the cases of many sellers, any attempt to manipulate reviews will be caught immediately . Previously, my brother-in-law always took the time to settle accounts, but recently he has been checking more strictly!

In addition, there have been a large number of cases recently where new accounts were convicted of fraud for placing fake orders . After being convicted , there was either no appeal portal or the account was unable to log in . Is Amazon simply not giving them a chance?  

Experienced people in the industry lamented: Sellers who have received warning letters from Brother-in-law must stop all illegal operations. Before Member Day, Amazon may conduct a strict inspection, so please stop reviewing and try to be compliant.

At present, many sellers in the industry have realized that they need to stop violating regulations. Some people have contacted the evaluation agencies and stopped all review operations in the near future. It seems that the deterrent effect of having a big seller’s account suspended is still very strong!

One of the reasons why domestic sellers manipulate reviews is that business is too difficult! As more and more new sellers enter the market, price wars are becoming more and more intense. How can you get orders without price advantages and review advantages? Therefore, some people would rather take risks in order to speed up sales.

In January, Chinese sellers accounted for 75% of all new sellers on Amazon, according to a report from Marketplace Pulse. This year, the proportion of Chinese sellers on Amazon's US site has soared to 63% from 28% in 2019.

The entry of a large number of new sellers will inevitably lead to fierce competition. Although Amazon is very strict in cracking down on the manipulation of reviews, some sellers continue to use illegal operations to remain competitive. The sellers who recently received warning letters are examples.

One seller said bluntly: “I admit to paying for some reviews, but this is because my competitors are doing the same thing , so I have to do it too. If there is a healthy competitive environment, who would be willing to use deceptive and illegal means ?

Price cuts, Amazon, top sellers