Sales dropped 80%! Amazon sellers: Chinese sellers have taken over Amazon

" 2024 is a tough year ! " lamented many Amazon sellers.

Since the beginning of this year, many US sellers have reported varying degrees of sales decline, with many experiencing declines as high as 50%. They believe that the rise of Chinese sellers has become one of the biggest challenges. With the change in global consumption trends and the rise of platforms such as Walmart and Temu , traffic has been dispersed, and most sellers do not rely on Amazon as their only source of income.

Sellers' sales have dropped significantly

Amazon local seller Tina and her sister run a company. They said that their brand's revenue reached seven figures last year, but this year it has dropped by 50% . The products have always been in stock and some new products have been launched, but they don't seem to know what to do. Now they are panicking, and they have to consider finding other jobs. Tina lamented: "2024 is a difficult year."

Like Tina, many people reported a decline in sales this year and considered it a difficult year. Some colleagues even said it was the worst year in their eight years of business.

“—Having been selling online since 2007, this has been our worst year;

——Eight years later, my situation is the worst. Cash flow has become very tight, and funding channels seem to have decreased. Sales from May to August fell by 60% compared to April;

——Our sales on Amazon have also dropped by 50% this year;

My sales are down almost 100%, page hits are zero, and I will take my business elsewhere.

——Sales have dropped significantly twice in the past three months. The first time was a sharp increase in advertising costs, and the second time was a 40% drop in sales within a month;

——Sales have dropped by about 80% in the past two days;

——Sales have dropped sharply, by about 40%. The speed of the decline was unexpected;

——This is happening to almost everyone. I have had my ups and downs in Amazon for many years, and this year has been more difficult than in previous years. Hopefully this slowdown will clear out some of the arbitrage sellers;

— I’m in the same situation! Amazon is the only source of income for my business. My monthly income has been dropping from $20k. Now I have to work for Uber;

- We are not a big seller, but even so our sales have been hit hard, down 30% to 45%. If you don’t have a shopping cart or are not a best seller, your product will be buried.”

Rise of Chinese sellers poses a challenge

One of the most noteworthy points among the many feedbacks is that many sellers believe that the rise of Chinese sellers has become a challenge for them.

"This has been a difficult year for many of us. One of the biggest challenges we've seen is the rise and dominance of Chinese sellers in the market. They launched new products at low prices and achieved a large number of sales," said Leo, a local American seller.

Peers agree with Leo’s point: “Yes, Chinese sellers are no longer the sellers they were a few years ago. They have grown into a formalized company. They have a team to manage each new product, and we don’t.

Even though the pricing is the same, they (Chinese sellers) seem to be attracting more customers, which is very frustrating. It’s hard to stick around when it doesn’t feel like the playing field is level. ”

Another local seller said that a Chinese seller started selling a new herb grinder that I started selling a month ago. I was the first one to sell the product on Amazon. That seller priced it at half of my price and probably spent a lot of money on advertising because the product quickly ranked in the top 100. At the price I paid, I could make a maximum of 0.70 cents according to the Chinese price.

"Chinese sellers have taken over Amazon. My company 's sales dropped 80% last year. The crazy thing is that we can't do retail in China via the Internet. How can we compete with China through retail when China is the manufacturer? " said an American seller.

According to authoritative data, the total share of Chinese merchants in Amazon's global stores is about 40%. This figure is enough to prove the strong strength of Chinese merchants on the Amazon platform. Not only that, in certain specific sites, such as Amazon Canada and Amazon Spain, the share of Chinese merchants is as high as 58% and 51%.

The proportion of Chinese sellers is indeed very high. However, the actual situation is that since the beginning of this year, many Chinese sellers have reported that their sales have also been declining. As their peers are engaging in price wars, they have been forced to join in, and some sellers are even willing to sacrifice profits.

Whether it is local sellers or Chinese sellers, the common feedback is that the platform also has problems. The main manifestation is that Amazon charges too high fees this year, so the prices of all products are relatively high; another major problem is that Amazon has changed the search method and no longer uses "related recommendations." Unless customers are smart and know how to use search, Amazon will not display sellers' products as before.

Multiple platforms compete for traffic

In addition to internal factors of the platform, competition from platforms such as Walmart and Temu and changes in consumption structure cannot be ignored.

According to Marketplace Pulse, Walmart has added more than 50,000 active sellers in the past 12 months. This is a significant improvement for a marketplace that was founded in 2009. As GMV continues to grow and the rate at which new sellers join the platform continues to accelerate, the number of active sellers on Walmart Marketplace has reached 150,000.

Walmart reported that its marketplace GMV grew by more than 30% over the past four quarters, with external estimates of GMV at around $10 billion. This solidified its position as the second most important channel for most marketplace sellers. Walmart has also become less strict about seller approval, allowing international sellers in. As a result, international sellers (almost all from China) now account for 35% of active sellers.

Temu 's growth rate after its launch is obvious to all. The latest news shows that Temu has surpassed eBay to become the second most visited e-commerce website in the world.

Temu launched in September 2022 and became the most downloaded shopping app in the United States just a few weeks later. It has topped the charts every day for nearly two years since then. It currently ranks first in most of the nearly 80 countries and regions in which it operates. According to SimilarWeb data, Temu.com receives nearly 700 million visits per month. A quarter of them come from the United States.

All caveats aside, Temu is the only e-commerce company to crack the top 20 most visited sites in the past decade. If you don’t take South Korea’s Coupang into account, it’s also the only one to crack the top 20 in the past two decades.

At the same time, the sluggish consumption in the United States continues. The growth of U.S. holiday season retail sales in 2024 may be the lowest in six years. The report pointed out that due to inflation and reduced household savings, the growth of holiday sales peak season retail sales from November 2024 to January 2025 is expected to be between 2.3% and 3.3%, with a total of 1.59 trillion U.S. dollars. In comparison, the growth in the same period last year was 4.3%, with a total of 1.54 trillion U.S. dollars.

The report also mentioned that the personal savings rate has fallen to about 3.4% in the past few months. Deloitte expects e-commerce sales to grow 7% to 9% during the 2024 holiday season, totaling $294 billion, compared with a 10.1% increase in the same period last year, totaling $270 billion.

With the support of multiple factors, whether you are a domestic American seller or a Chinese seller, the best business practice for everyone in 2024 is: never put all your eggs in one basket, and do not rely on a single source of sales to survive.

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