Mom worked for Amazon for two years and owed 1 million

For most Amazon entrepreneurs, a weak supply chain is often the key to their business failure. Some entrepreneurs believe that if they can rely on factories, the situation may be different.

But is this really the case?

The nightmare begins

Xiao Meng from Shenzhen has been working for Amazon for more than two years. She has been working alone at home and can also take care of her children.

It sounds like life is peaceful and tranquil, but according to Xiao Meng herself, the reality is that the situation cannot be any worse.

At first, Xiao Meng learned from her fellow villagers that Amazon was profitable and many mom-and-pop stores could buy cars and houses after just a few years. Xiao Meng was tempted and wanted to join the market, but because she had no relevant experience, she paid to attend an Amazon training class.

During the training period, Xiao Meng launched several products and started advertising, with a daily budget of $ 50 . Due to the low price and sufficient advertising budget, several products started to be sold out quickly, and the first batch of 500 stocks were quickly sold out.

For the second batch of stock, Xiao Meng directly sent out 2,000 of each product , thinking of giving it a try. After the products were put into storage and put on the shelves, the advertising budget continued to increase, product sales continued to rise, and the ranking also began to climb. It seemed that she was only one step away from financial freedom.

But Xiao Meng made a mistake that many novice sellers make: she did not calculate the profits.

After a while, Xiao Meng found that the money she earned from selling goods was not even enough to cover the advertising fees. But looking at the continuous orders, Xiao Meng comforted herself that it was normal to lose some money in the early stage, and she could slowly raise the price after the ranking went up.

Unexpectedly, reality slapped her in the face again. The ranking and sales volume kept rising, but the price could not increase at all. If it increased a little, the ranking would drop, and the sales volume would be directly cut in half. Xiao Meng was so scared that she quickly lowered the price.

Before I knew it, the goods were sold out and the money was spent on advertising. After adding up the total, I realized that I had been losing money. The 70,000 or 80,000 yuan I invested didn't even make a splash.

If the story ended here, it would just be another story of a newbie who mistakenly entered the Amazon and was harvested, but Xiao Meng did not give up because of this failure, and as a result, she planted a bigger bomb.

Getting deeper and deeper

Only half a month later, Xiao Meng was introduced to a toy factory. She wanted to discuss cooperation with the factory owner, let the other party advance the money for shipment, and she would be responsible for operations, and then share the profits together after the deal was completed.

After we negotiated the cooperation with the factory, the factory started to ship the products. The factory required that at least 5,000 units of each model be shipped. If the number was less, there would be no cooperation. In addition, the factory also stated that if there was a loss, the factory could only bear 20% , which laid the groundwork for the subsequent thunderstorm.

After the products were put on the shelves, Xiao Meng did not learn from the previous experience, and still followed the previous routine, with low prices and high advertising budgets to rush to the rankings. There were seven or eight products in total, and the sales and rankings quickly rushed up. At the peak, more than 1,000 orders were placed in a day. Xiao Meng was arrogant.

The second time Xiao Meng prepared stock, she directly asked the factory to ship 10,000 units of each model , for fear that out of stock would affect her pace of ordering. It was this idea that caused Xiao Meng to suffer a great loss.

After stocking up, daily sales still remained at more than 1,000 orders, but negative reviews gradually began to appear. Because the products were shipped directly from the factory, Xiao Meng had only seen samples and was not clear about the overall quality of the goods.

As the number of negative reviews increased, product sales and rankings both declined. Coupled with the impact of competing sellers, Xiao Meng could no longer bear it.

After the product was unsalable, there was still a lot of inventory, and Amazon charged several thousand dollars for storage fees. The factory began to urge for payment and sales, and it was only at this time that Xiao Meng remembered to settle the account.

I didn’t know until I calculated it. I was shocked. Xiao Meng had lost more than 800,000 yuan, not including the unsold inventory in overseas warehouses. The factory said that the inventory would be directly abandoned and the total account would be calculated.

Although she was reluctant, Xiao Meng had no choice. Including the abandoned inventory, she lost more than 1.1 million yuan in the past six months. According to the previous contract with the factory, the factory only bears 20% of the loss, and Xiao Meng has to bear 80% . Adding the 80,000 yuan she lost in her first business venture , Xiao Meng is now in debt of nearly one million yuan!

It is hard to imagine that an ordinary person working for Amazon could owe so much money. The cooperation model with factories should have been a win-win situation, but it also put a huge amount of leverage on the operators, and if they are not careful, they may lose everything.

Pros and Cons

In the past two years, the model of cooperation between operators and factories seems to have gradually become popular. One part is a partnership model, where both parties share the profits, but more often operators help factories or companies run stores on a part-time basis and only receive a salary plus commission.

Although this form of operation will not make a lot of money, it does not require taking excessive risks, let alone worrying about incurring debt.

Zhao, who works in Amazon operations, recently learned that one of her former colleagues took on a job as an operator for a factory and was paid 8k a month plus commission. Although the salary is not high, it is very good to get this much for a part-time job.

After hearing this, Sister Zhao was tempted to take on this kind of agency work, which might be a good way to increase her income. However, she later heard that this former colleague was fired after helping the factory to run the store.

The cooperation between operations and factories should be mutually beneficial. Factories can hire people at a lower cost to help them sell goods overseas, and operations can be more adept at promoting products with the supply from factories.

But the reality is that the factory thinks that as long as they can make it work, they can just ship the goods. What is the point of operations then? When working with factories, operators also have their own selfish motives. If they are not responsible for profits and losses, some operators will take this opportunity to practice and prepare for starting their own business in the future.

When both parties have their own agenda, the cooperation will definitely not last long, let alone produce any good results.

Of course, since this model of operation and factory cooperation exists, it must have its rationality. If you want to do it for a long time, both parties must keep their eyes open and finalize all the details before cooperation to avoid disputes later.

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