With a compound annual growth rate of over 100%, Amazon's top-selling product category shows its strengths

It is the goal of almost all Amazon sellers to have their products ranked first in their categories, but this is not easy to achieve. Xiao Li, who has more than 20 years of experience in foreign trade procurement, led Aohe (Shenzhen) Development Co., Ltd. to quickly win the first place in the category of Amazon North America.

Driven by hot-selling products, Aohe's sales have increased by more than 100% annually . How to win with products? Xiao Li's strategy is worth exploring by fellow sellers.

Traditional foreign trade shifts to Amazon, with compound annual sales growth exceeding 100%

In 2005, Aohe began traditional foreign trade business, with its main customers being large American supermarkets such as Walmart and Home Depot.

At that time, the company focused on the United States as its main market, mainly promoting outdoor products, and also operating some indoor household products. After nearly 10 years of development, the company has achieved considerable results. However, during the development process, the rising costs of materials and labor, the instability of exchange rates and other limiting factors have caused the company's development to hit a ceiling.

The survival environment of traditional B2B foreign trade is getting worse and worse, so Aohe thought of transformation. By transforming into a cross-border e-commerce, it can achieve independent product research and development, free pricing power, independent marketing strategies and methods, and brand building.

After coming up with the idea, Aohe began to test the waters on Amazon in 2014. Xiao Li, the company's CEO, said that at the time, he had no idea about the operation routine, so he could only work hard on the product, trying to find the high cost-effectiveness and differentiation of the product to meet the needs of consumers. In terms of product selection, in addition to using various product selection software, it also relies on market insight, conducts research on the offline market and customers, and then continuously improves the product based on customer feedback, and the process of developing and improving products is endless.

After working hard on the product, the results were obvious. Some of the company's subcategories quickly took the first place on Amazon's US and Canadian sites.

The best seller in the category wins by relying on products

Xiao Li admitted that the company's transformation process has been relatively smooth over the past seven years, with sales growing at an annual compound rate of more than 100%. The overall development is now good, with revenue and profits in line with expectations, and the company's profit margin has basically reached the industry average.

When talking about the factors that contributed to the company's smooth development, Xiao Li believed that the concept of product is king. He mentioned that in fact, every excellent cross-border e-commerce company has a slightly different business model and secret to success. For Aohe, the most important aspects are still products and services, that is, to grasp the essence of business.

In terms of products, furniture has become a dark horse category on Amazon since the outbreak, and overall sales have increased significantly. Since the outbreak of the epidemic, furniture, especially ergonomic furniture, has indeed seen explosive growth in sales. Over the past year or so, the epidemic has spawned many cross-border e-commerce giants in the furniture industry.

However, the success of a product category or a product depends on multiple dimensions . For products that suddenly explode, sellers who have previously been deeply involved in a category have more opportunities. In this regard, Xiao Li admitted that furniture sales have increased significantly since the epidemic, but because the company entered the field of large household products relatively late, it missed this wave of dividends.

Although the furniture category, which was boosted by the epidemic , performed mediocrely, Aohe has obvious competitive advantages in other categories. Backed by a number of hot-selling products, Aohe's business doubled in 2020 .

In the past two years, with the listing of companies such as Morning North Technology, Anker Innovations, and Gemtech, capitalization has become a hot topic in the cross-border e-commerce industry. When talking about the capitalization process, Xiao Li's attitude is " do your own job well and capitalization will follow fate. " With steady steps and serious product development, Aohe has a promising future.

However, when the performance just increased significantly, the company had to lower its target. This year, Aohe adjusted the original compound annual growth rate target of over 100% to within 50%. In this regard, Xiao Li said that the company will use more resources for product research and development and supply chain management.

How to maintain an advantage in the competition? Big sellers show off their strengths

After all, product development and excellent supply chain management are one of the essential conditions for sellers to gain a foothold.

The goal of the new year is also to seek longer-term development.

Why do we need to strictly manage the supply chain? During the epidemic, sellers have complained about logistics price increases, shipping restrictions , slow FBA warehousing, and other issues . Some sellers have even been dragged down by them.

The epidemic has brought new problems, indirectly leading to a new pattern change in the cross-border e-commerce environment. Since the outbreak of the epidemic last year, controlling the cost of the entire supply chain has been the top priority for cross-border e-commerce sellers for a long time to come.

Xiao Li, who has more than 20 years of experience in foreign trade procurement and supply chain, has a deep understanding of this. He mentioned that only through refined supply chain management can sellers have a chance to be invincible. In fact, the current logistics price increase, delivery restrictions and other issues are all determined by the relationship between supply and demand. Thinking about it the other way around, isn’t it a good thing ? This shows that people’s demand for e-commerce is increasing.

"Next, implement refined supply chain management, set up your own overseas warehouses or cooperate with efficient third-party overseas warehouses . " This is Xiao Li's pertinent advice to fellow sellers.

In terms of procurement and supply chain , Xiao Li also shared some practical tips with his peers based on his own experience .

He believes that the selection of suppliers is very important. We usually consider it from multiple dimensions, such as price , quality , delivery time , R&D and cooperation. Personally, I think the supplier's R&D capabilities and willingness to cooperate are the most important considerations .

Today, the Amazon market is still hot. The latest data from Marketplace Pulse shows that the number of Amazon sellers worldwide has reached 6.1 million. So far this year, more than 320,000 new sellers have poured in, which is equivalent to 2,417 new sellers every day, and 100 new sellers every hour. At the current rate, by the end of this year, nearly 900,000 new sellers will join Amazon.

As a large number of newcomers enter the Amazon platform, existing sellers want to maintain their competitive advantage. Xiao Li believes that it is important to do the following:

1. Sellers must be prepared to work hard for a long time, as the good days of making quick money are gone ;

Second , sellers must have sufficient operating funds to match their business goals . Now more and more capital is entering the cross-border e-commerce industry, and it is difficult to develop sustainably without money ;

3. Sellers should have the concept that products are king ;

4. Sellers should have a refined operational mindset.

Many sellers agree that product is king, but how to implement it specifically?

On May 25, at the 5th China Cross-border E-commerce Network Marketing Conference hosted by Ennet, Xiao Li will share with you in detail. The theme of his speech is "Amazon's weapon for continued growth - products", mainly discussing the importance of products in Amazon's business from five dimensions, and will also give some corresponding suggestions to fellow sellers. You can go to the site to find out the details.

Interested sellers, please click https://www.ennews.com/2021 to sign up!

Amazon, No. 1 in category, best seller