After 7 years on Amazon, sellers are in debt of 10 million

In the past two years, sellers have been complaining about the continuous censorship and account blocking.

The spillover of internal circulation leads to external circulation. Seller Zutian told Yien.com that 2023 will be a year for cross-border people to overcome tribulation.

Affected by internal competition and platform account blocking, many sellers' businesses hit rock bottom overnight, and they could only choose to change careers or return to being workers.

Some sellers even had their factories forced to shut down because their accounts were blocked, incurred heavy debts, and were even separated from their families.

Behind every round of changes in the e-commerce landscape are the bitter tears and blood of sellers.

After being blocked, I fell to the bottom overnight

It is a consensus among many sellers and industry insiders that it is becoming increasingly difficult to do business on Amazon.

The platform traffic is declining, competition is fierce, and sellers can’t save sales even if they spend a lot of money on advertising. To make matters worse, the platform’s account scanning storm has almost never stopped.

In January this year , new accounts and local European and American accounts were swept up in a wave of sweeps, making it more difficult to save blocked accounts, and many old accounts were affected by this wave of sweeps; European countries increased tax audits, and a large number of sellers were forced to abandon their accounts; back to 2023, the large-scale related sweeps in September also made sellers complain. Since the wave of account blocking in 2021, the aftermath of account blocking has never stopped.

The common strategy of e-commerce platforms is to lower the entry threshold in the early stage of development, rely on a large number of third-party sellers to expand the platform's SKUs and traffic, and then clear out sellers that do not meet the requirements after development matures. However, for ordinary sellers, a single account suspension is enough to cause huge trauma.

As a senior cross-border seller, Zutian not only experienced the impact of Amazon’s account suspension, but also his friends were deeply affected by the suspension. Every time he saw a seller who was hit hard by the suspension, Zutian felt a sense of "the death of the rabbit makes the fox mourn".

During a trip, Zutian met a seller named Xiao Liu (pseudonym) from Huai'an. After being blocked in 2022, Xiao Liu's life changed dramatically in a year, from achieving financial freedom through Amazon to falling into a huge debt and even ending up with his wife and children separated.

Xiao Liu is not well educated and is an ordinary seller who relies on his own hard work. He worked in a factory in Yiwu when he was a teenager, making children's toys. After he turned 30, Xiao Liu came into contact with Amazon, which was seven years ago, just when Amazon was in its infancy.

Before and after the pandemic, it was a promising time for Chinese sellers to do cross-border business. Xiao Liu started his business on Amazon, selling toys on the US and European sites. Like most Amazon sellers, the early dividends of Amazon's "picking up money everywhere" allowed Xiao Liu to transform from an ordinary worker into a big seller, earning his first pot of gold and achieving financial freedom.

After accumulating some initial capital, Xiao Liu bought a house in Yiwu and opened a factory to integrate industry and trade, hoping to become bigger and stronger in Amazon. At that time, Xiao Liu was 33 years old, had two children, and worked hard in Yiwu.

But accidents are always unexpected. In 2022, all eight Amazon accounts under Xiao Liu were shut down overnight. The reason for the closure was that in 2022, Amazon conducted an audit on the toy category and required the provision of relevant information on qualification certificates. However, Xiao Liu's education level was not high and he lacked the ability in this regard, which resulted in Xiao Liu being unable to withdraw the funds frozen by Amazon, and his factories eventually had to be suspended and disbanded.

After the factory shut down, more than 50 workers were waiting for wages to survive. Xiao Liu sold his car and house, and still owed nearly 10 million yuan in debt.

Overnight, Xiao Liu's life seemed to have returned to the starting point.

Fearing that the creditors would interfere with the growth of his two children, Xiao Liu had no choice but to divorce his wife and let her take the two children to school. Xiao Liu was left alone, bent over by debt.

Zutian said that when he met Xiao Liu on the road, he felt that he was drowsy and " soulless ". Zutian, who is also a cross-border seller, also felt the same way about Xiao Liu's experience. He said that the reason why cross-border business is difficult nowadays is not that the products cannot be sold, but that the prices are very high, or because the account is blocked or because of various qualification certification issues, the goods are sold but the money cannot be returned.

Recently, Wish, which has been losing money for 7 years, was acquired by Qoo10. Zutian was once a veteran seller on Wish. His years of experience in the industry gave him a feeling: in the e-commerce industry, whoever loses Chinese sellers will lose the world. Zutian personally believes that overseas platforms are actually suppressing Chinese sellers in various ways of "making up excuses".

After talking with Zutian, Xiao Liu was overwhelmed with grief and burst into tears. " He is a man who is quite responsible. In order not to be separated from his family, he took the initiative to cut ties with his family. He even dared not go home to see his children and worked outside, " Zutian said. " He said that he has nothing now, only the word dream. "

Zutian can relate to Xiao Liu's experience. Zutian sells wigs on Amazon. In 2022, four of his accounts died, leaving only two alive.

"In the past two years, we sellers have been going through a difficult time," said Zutian.

Changing careers, working part-time, sellers looking for new ways out

Zutian makes wigs and hair accessories. He initially had six accounts, two in China and four in Europe, including one in the UK, one in Germany and two in France. All of these accounts have been blocked. Zutian stressed that all of his accounts are real identities.

" These local accounts used my and my family's identities to register companies in Germany, France and the UK, used corporate localization to avoid taxes, and then sold goods. But later Amazon required us to conduct identity authentication. Our identities were all real, but our stores were all closed. " Zutian said.

Many sellers will open stores by opening local European companies to achieve the purpose of reasonable tax avoidance. In 2023, Amazon began to strictly check local accounts. Although some sellers have opened local companies, they actually do not have real overseas office addresses; some sellers purchase accounts from service providers and cannot provide account information. These local stores are actually judged as cross-border stores by Amazon, and their accounts are blocked or required to pay back taxes.

Once the account is blocked, the funds in the account will be frozen and cannot be withdrawn. Although the platform wants to regulate local stores and prevent sellers from evading taxes, it is a reasonable regulation in name, but from the seller's perspective, it feels like " tolerating your imperfections when you are needed, and abandoning you when you are not needed . "

Zutian said that before his account was blocked, he could earn 130,000 to 150,000 euros in sales per month, but now it is less than 20,000 euros, and his profit has dropped from 35% to 50% to only 5% to 15%. He used to make a lot of money on Amazon, but now he can only barely support his family.

Amazon is not very friendly to small and medium-sized sellers now. Zutian believes that this is mainly reflected in three aspects. First, costs are constantly rising, policy costs and tax costs are increasing, and the logistics costs of local distribution are also rising; second , the collection cycle has become very slow, resulting in a lengthened capital chain. For example , payments could be made within 10 days before, but Zutian now has a revenue of 50,000 euros, and at most 2,000 euros can be withdrawn in 10 days; third, account stability has deteriorated, and there is a risk of being censored and blocked from time to time.

"How can we infringe copyright by making wigs? They don't bother you with infringement or qualification certification, but with KYC. KYC even checks the marriage certificate of the legal person," Zutian complained, "the only thing missing is the birth certificate!"

If we say that cross-border e-commerce was a way to get rich quickly in the early years, nowadays, many cross-border sellers feel that there is no essential difference between doing foreign trade and doing domestic trade this year. There is no profit advantage, the internal competition is also very fierce, and the platform’s attitude towards small and medium-sized sellers has become less friendly.

The sellers have experienced pain, suffering, and struggled with Amazon, but out of desperation, some sellers still chose to leave this year.

Zutian said that the seller friends around him have begun to look for new ways out.

Some sellers have begun to expand into more platforms, such as local e-commerce in each country, like Cdiscount in France, Rakuten in Germany, and Fruugo in the UK; some sellers have given up starting their own businesses and returned to being workers, such as applying for Amazon operations; some sellers have directly abandoned the e-commerce industry and used the money they earned in the past two years to engage in the real economy, such as opening milk tea shops; and some sellers choose to do "real cross-border" and start their own businesses overseas.

Zutian chose the fourth way to change careers. He plans to open a physical store in Malaysia or Singapore and do retail business locally.

It is foreseeable that cross-border e-commerce is undergoing a rapid reshuffle, and some sellers may leave the market. For sellers who are still in the market, they are also preparing for a rainy day, making preparations in advance, and responding to new changes in the industry at any time.

Conclusion

Amazon's initiatives over the past two years have been to continuously optimize the brand management environment and focus on brand building.

Some small and medium-sized sellers have become victims of platform strategies.

Rising costs, lower profits, and stricter reviews have brought higher barriers to sellers. Some sellers are already small businesses, and once the platform's " hammer" falls on their heads, it will be a disaster.

Zutian shared a poem he wrote: I am like a drifting dandelion, rushing east and west. I travel back and forth between heaven and earth, and I cannot rest all day. My ambition is to go to all directions, but my actions are hesitant. Only dreams can comfort me in life. (Excerpt)

It represents the voice of some sellers.