A retailer with annual sales of 40 million wants to transform

However, everyone understands the principle, but when they actually do it, they find that the problem is not that simple.

“I can make money, but I want to change.”

From selling goods to selling brands, the cross-border e-commerce industry has undergone tremendous changes in the past few years, and many sellers are clearly not prepared to cope with it.

Seller Zhang Lu has been working in the cross-border circle for many years. Relying on the foundation accumulated during the rapid development of the industry in the early years, all of Zhang Lu's stores combined can still sell about 40 million a year.

Although he can still make money now, Zhang Lu has clearly felt that the distribution model is becoming increasingly difficult to operate. He wants to adapt to the trend of the times and transform into a high-quality product manufacturer, but Zhang Lu seems a little overwhelmed by various practical problems.

According to Zhang Lu, although he has been engaged in cross-border business for 10 years, he has only been engaged in the distribution of goods and does not know much about the boutique model. The current situation is that Zhang Lu and his small team have less than 10 people in total. This year's sales are about 40 million, and the profit is about 4 million.

Although the current revenue level is already very good for a small team, Zhang Lu is very clear that he can only earn hard-earned money by distributing goods now, and the future development prospects are not clear in the long run.

Zhang Lu was lost in thought about how to transform. "From 0 to 1 is the key, but I don't know how to start. I can currently use about 2 million yuan of funds to develop a boutique line, but I don't know where to focus my efforts," Zhang Lu concluded.

In fact, for all the sellers who sell general merchandise, transforming into selling high-quality products is a very painful process. After all, they have to give up their previous successful experiences and start over. Many people do not have the courage to take this step.

This is because, unlike general merchandising, making high-quality products is more like a long-term investment, and one needs to be mentally prepared in advance, as there may be a long period of time in the early stages when no returns are seen.

Zhang Lu said frankly that not seeing any results after the transformation was indeed what he was most worried about, especially when he saw that his peers around him were still able to maintain a good growth rate, which put him under a lot of pressure.

On the other hand, Zhang Lu is also considering whether to try a multi-platform layout in the future. After all, if all resources are placed on Amazon and something goes wrong with his own store, the income of the entire team will be affected. In addition, if he wants to develop in the direction of high-quality and branded products, Amazon cannot be the only sales channel.

In response to Zhang Lu's situation, an industry insider suggested, "Since the company was able to sell 40 million yuan and make a profit of 4 million yuan by distributing products, it means that there must be some products that are performing very well. You can start with these products and gradually start to refine the operation and promote the brand."

In the early stage, the most prudent transformation strategy for Zhang Lu is to first improve the existing products with relatively good performance, and then gradually develop new categories.

As for multi-channel layout, this is not the most important thing at the moment. It will not be too late to start doing it after the products are developed and the brand is established.

In addition to Zhang Lu, there are still many cross-border sellers who are struggling to find ways to transform, including some top sellers.

The transformation path of wholesale sellers

2021 is a turning point for many Amazon sellers. Affected by the wave of account bans, many big sellers have suffered heavy losses, most of whom made their fortunes by distributing products.

Take the five tigers of Bantian and the four young masters of South China City as examples. With the help of the distribution model, they grabbed land and expanded rapidly on major e-commerce platforms in exchange for higher sales.

But as the wave receded, the former "industry benchmark" ended up in a mess.

Of course, there are also many popular products that have withstood the test of the times and successfully transformed to start the second half of their overseas journey. Shenzhen Jihai Technology is one of them.

It is understood that when Jihai Technology first entered the cross-border industry, it did not have a clear plan for which track to enter. It simply looked for some products that it thought would be popular to sell, including mobile phone cases, auto parts, smart sockets, recording headphones, etc., covering a very wide range.

Although it has produced several hit products, they cannot bring long-term stable profits to the company. After a period of time, Jihai realized that there is no future in this way, and it must find a suitable track to continue to cultivate.

In 2019, Jihai Technology noticed the opportunities in the smart home cleaning track and decided to enter the sweeping robot track. It successfully obtained financing of up to 10 million yuan in 2020 and 2021.

However, although it made rapid progress for a while after receiving financing, compared with big brands such as Dreame, Stone and Whale, JiHai Technology's advantages in technology and capital disappeared in an instant.

After the product was officially launched on the market, more and more problems began to emerge, and the two rounds of financing previously obtained were obviously unable to cope with the pressure brought by the fierce market competition. As the financing gradually ran out, Jihai Technology needed to find the company's future direction as soon as possible.

At the beginning of 2021, Jihai launched a pet grooming device for the domestic market. Unexpectedly, the market response was unexpectedly good. After receiving positive feedback from the market, Jihai quickly decided to launch this product overseas.

Afterwards, based on this product, Jihai Technology selected the pet supplies market as the company's next core track. Later, based on the actual needs of users, it launched a number of hot-selling products such as fully automatic cat toilets and silent pet hair dryers.

Up to now, many products under Jihai have been listed on the BS list of relevant categories on Amazon. Its flagship product, pet grooming device, has a monthly sales volume of over 10,000, far exceeding other similar products.

Although the pet industry has been developing rapidly, Jihai Technology’s business was not going smoothly before its successful transformation, and it was even on the verge of bankruptcy twice. It can be said that the transformation from mass merchandising to high-quality products saved the company.

As the trend of high-quality and branded products continues to advance, I believe that more and more sellers will join the ranks of making high-quality products. At that time, Jihai Technology will be a good reference for learning.

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