A big seller with annual sales of 150 million, but now selling its account sadly

Some big sellers have successfully transformed and continued to run wild on the cross-border road relying on branding strategies, while some sellers quickly faded after losing the bonus blessing and eventually left the market with regret.

At its peak, the company sold 150 million units a year, but now it sells units for 300,000.

Today’s protagonist is an Amazon product that once sold billions of units, but has now fallen to the point of selling accounts at low prices. What went wrong?

An Amazon seller named Lao Yao (pseudonym) shared in the Zhiwubuyan community that he had been doing business on Amazon since 2017. It only took him four years to grow from opening a store to annual sales of tens of millions to 150 million. At its peak, the company had more than 50 people.

Talking about past experiences, Lao Yao said that the performance in the past few years basically increased exponentially. The advertising strategy at that time was not sophisticated. They simply put precise, short phrases and broad advertising slogans in one advertising group. This strategy would definitely not work today, but it still achieved good results at that time.

In addition, Lao Yao said that his operation method at that time was also very "rough and tumble". Since Amazon did not have strict control over fake orders and reviews at that time, the company adopted a relatively radical approach. The way to promote new products was basically to promote advertising and fake reviews. New products cost about 20 euros/US dollars/pounds in advertising fees and 10-20 reviews every day, and the success rate of product promotion was over 50%.

When the epidemic was at its worst in 2020, Lao Yao's company's overall performance increased by more than 200% in a year. Such an exaggerated increase made him go to his head, thinking that these were all reflections of his abilities, which resulted in him making wrong judgments.

In 2021, Lao Yao saw that the situation was very good and decided to expand on a large scale. The company team expanded from more than 20 people to more than 50 people. It took less than 8 months for the number of people to more than double. After that, Lao Yao increased the amount of inventory, ready to take advantage of the opportunity to make another profit.

But what he didn't expect was that the European site that the company was mainly operating at the time suddenly encountered changes. Due to tax policy issues, the store's profits dropped sharply, and the gross profit dropped directly from about 20% to less than 5%, and the net profit even went straight to negative.

In order to save the store, Lao Yao decided to raise prices to make up for the profit, and thought that other sellers would also raise prices under pressure, but Lao Yao was wrong. Facts have proved that most sellers gave up short-term profits in order to defend their rankings and sales, so they did not choose to raise prices. Some sellers even directly chose to set up local EU accounts to avoid taxes.

As a result, Lao Yao's company still had nearly 20 million worth of goods sitting in overseas warehouses by the end of 2021, which directly dragged down the company's overall payment collection progress.

After realizing that something was not right, Lao Yao decisively began to lay off employees and cut product lines. It took him nearly two years to digest all the inventory, but by then Lao Yao's company had already been severely damaged.

Having come to this point today, the seller believes that it is mainly due to the changes in the overall environment and his own misjudgment of the current situation that he has ended up like this.

In addition, the company's staff turnover is also a major problem. During the industry downturn, Lao Yao was only concerned with reducing costs and increasing efficiency, and formulated a more stringent assessment system, but forgot to consider the feelings of employees. In the end, its core team fell apart, and the new recruits who were re-introduced found it difficult to adapt to the fierce competition environment, and several new products launched ended in failure.

Now, Lao Yao said that he decided to take a break for a while, adjust his mentality, and planned to change the track for new development, so he planned to transfer his Amazon account, and the transfer fee is only 300,000+ .

In fact, Lao Yao’s situation is not an isolated case. After the wild growth period ended, many sellers experienced the pain of transformation. During this process, many well-known sellers did not survive.

The curtain of the era has fallen, and the peak of the once famous big sellers has passed

"Look to Shenzhen for China's cross-border e-commerce, and look to Longgang for Shenzhen's cross-border e-commerce." The Shenzhen Municipal Bureau of Commerce announced that Shenzhen's cross-border e-commerce import and export volume reached 326.53 billion yuan in 2023, a year-on-year increase of 74.4%.

As a gathering place for cross-border e-commerce sellers in China, Shenzhen has seen the emergence of many well-known sellers. However, in the face of industry shocks, the former big sellers represented by the four young masters of South China City and the five tigers of Bantian were not spared.

At that time, the names of the Five Tigers of Bantian (Lens Technology, Zehui, Baoshijia, Gonglang, and Jiandan.com) and the Four Young Masters of South China City (Aojie, Youkeshu, Tongtuo, and Saiwei) had already become famous in the cross-border circle. There were also various titles full of gangster spirit, such as the Thirteen Wolves of Longhua, the Three Heroes of eBay, and the Three Heroes of Amazon. This to a certain extent also reflected the "grassroots" era of cross-border e-commerce at that time.

Data shows that the cross-border circle ushered in a peak period of listing around 2016. Savi and Aoji were listed on the New Third Board, and sellers such as Youkeshu tried to go public through "reverse listing".

At that time, Zehui, one of the five tigers of Bantian, seemed to be only one step away from listing. In 2019, Qibuli shares planned to purchase 88.57% of the equity of Zehui Technology by issuing shares, convertible bonds and paying cash. The transaction price was initially determined to be 1.594 billion yuan.

According to Zehui Technology's performance commitment, the company's audited net profit in 2019 and 2020 will not be less than 150 million yuan and 200 million yuan respectively, otherwise it will be compensated accordingly. In the end, due to the failure to complete the bet, the major transaction between Zehui and Qibuli Shares fell through.

In addition to Zehui , many big sellers have also been deeply trapped in the "betting" quagmire. After Tongtuo Technology lost the bet with Huading Shares, the founder had no choice but to mortgage stocks to repay debts. The founder of Jiazhilian fled to the United States because he was unable to complete the bet with the listed company Xunxing Shares, and was eventually investigated by the parent company in the name of "contract fraud."

In fact, after 2020, the revenue of most sellers has been on a downward trend, but this is also a necessary development process for the industry. After a period of barbaric development, a major reshuffle in the industry will come sooner or later.

Nowadays, names like the Five Tigers and the Four Young Masters seem to no longer be mentioned by people, and the former glory of some big sellers has remained in the past forever.

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