Strict investigation! A large number of stores "died"

Since the collapse of local European accounts last year, such audits and sweeps have been popping up continuously, causing many Chinese sellers to suffer heavy losses and finally withdraw from the European site. Recently, Amazon has once again conducted a strict inspection of local European accounts, and almost all Chinese legal person accounts have been swept. At present, many sellers have announced that their accounts have been "dead".

Amazon ID scanning kills many Chinese legal person stores

Recently, many cross-border sellers have reported that their European accounts have been investigated and blocked, and almost all Chinese legal person stores have been "killed". One seller said: "All 20 of my stores have been affected. This round of account sweeps has affected nearly 90% of Chinese legal person sellers."

Coincidentally, seller Lin Yu said that his account, which he had been using for sales for half a year, was checked and he no longer planned to use it. In fact, the same situation was mentioned by sellers as early as early May, but most of the accounts that were scanned at that time were new accounts that had been opened within a year, and the intensity was not large, so naturally it did not attract much attention. Recently, the number of accounts has been scanned frequently, and sellers are still being affected as of June 5.

Chinese legal person stores have been swept up one after another, which can be said to have directly blocked the way for Chinese legal persons to register local accounts. However, compared with the previous wave of sweeping accounts, this wave of sweeping accounts still leaves room for maneuver. The funds and goods in the blocked accounts can be withdrawn, and the sellers have 30 days to submit funds for review, which means that the sellers can withdraw assets within this time and appeal for themselves.

However, according to sellers’ feedback, the possibility of appealing against the closure of the store this time is small, and sellers will directly abandon accounts that have been registered for a short time. Industry insiders speculate that Amazon did not freeze the funds most likely to promote the implementation of the local account policy. In the future, this kind of review will definitely become normalized like KYC review, mainly targeting foreign sellers who are not actually operating in the local area, and it is expected that a large number of sellers will be wiped out.

As we all know, the origin of account scanning is that Chinese sellers evade VAT in huge amounts, which has reached the point where local governments have to pay attention. In 2023 alone, the EU lost 11.5 billion euros in tax revenue due to tax fraud (tax evasion), which is about 10 billion yuan, and this number has been increasing.

This situation first occurred after the EU VAT reform in 2021. EU companies were able to declare taxes on their own. Then the number of Chinese sellers' local stores increased sharply, especially in the two years after the reform. The most critical point is that they did not pay taxes to the EU tax authorities.

To this end, the platform has stepped up its scanning efforts and is raising the registration and review standards. According to sellers’ feedback, those who want to enter the European market recently and register local accounts are mostly rejected and receive a red exclamation mark. This also means that it is very difficult for Chinese legal persons to register local accounts (except for big sellers with capital). Sellers who want to conquer the European market will have two ways in the future: one is to be a boss with resources and directly find someone to open a store; the other is to rent a store from a local person.

In addition, the KYC review time has been constantly stuck, often lasting half a year or even a year. Some sellers said: "The KYC review has been stuck for 5 months, and there is no way to withdraw money from the background." Even if the identity information is submitted for review, the account is normal, and the link and sales can be done normally, but the KYC is stuck for some reason, this makes many sellers anxious.

To another extent, with the platform's series of rectifications on the EU market, its entry threshold has become higher and higher, and the living space of small sellers has gradually been compressed. This is naturally a good opportunity for some powerful brands to sell big.

Amazon scans numbers in large quantities before big promotion

Scanning accounts during peak seasons has become a rule. Recently, scanning accounts is not only common in Europe, but also in other Amazon sites such as the United States, especially the abuse of accounts. This is the second abuse of scanning accounts since March 20.

Sellers whose accounts have been scanned have been speaking out since the end of May, and service providers have also confirmed this: many customers have been scanned due to abuse of the store. The content of the email sent shows that "according to Amazon Agreement 3, your account has been deactivated and the product information has been deleted."

The email mentioned that sellers may have abused Amazon features or services, attempted to influence customer ratings, feedback and comments, attempted or circumvented Amazon's sales process, etc. Sellers can admit to the abuse or appeal it, but as of now, most sellers' accounts have not been restored.

Not only that, the situation of association, follow-selling, and TRO is more sensitive than before, and sellers are frequently blocked. Some sellers also reported that some newly registered stores were often blocked within dozens of days of going online. They are all moving towards a more compliant direction.

The situation on the platform side continues to change, and "malicious" competition among peers has always existed.

Recently, there is a common situation among sellers : "the seller's products are maliciously copied at low prices, resulting in ASIN prices being lowered and flash sales errors." According to feedback from some sellers, the prices of these products are mostly half of the products being copied. They are not doing this to make money, but only to disrupt competitors before the big sale.

Sellers hate follow-selling, and follow-selling is often done secretly at midnight, but some people are so rampant that they turn follow-selling into a business, and even blatantly recruit apprentices to train follow-selling. On a domestic social platform, there is a blogger who specializes in teaching people to follow-sell, and publishes related posts such as "Amazon Europe and the United States follow-selling apprentices", "How to use ERP to follow-sell?", "How to quickly place orders by following Amazon?", etc.

In addition to this blogger, live broadcasts related to follow-selling teaching have also appeared on some short video platforms. A seller reported that when he was watching Amazon-related live broadcasts recently, most of the recommendations were related to follow-selling, which had a fatal attraction for some novices. They were interested in making money, but in the end they fell into the abyss.

Previously, some netizens revealed that some people were deceived by participating in follow-selling training. Basically, everyone paid an IQ tax ranging from 10,000 to 50,000 yuan, and they relied on some screenshots of short-term sales surges and the so-called "follow-selling order skills and precautions" summarized by themselves.

As the big sale approaches, both the scanning trend on the platform side and the follow-selling flow on the seller side are becoming more active and are being tightened step by step. Sellers are advised to make preparations in advance, strictly abide by regulations, and check their accounts regularly to avoid having their accounts blocked or even missing out on the big sale.

Europe

Taxation

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