Another strict inspection! A large number of sellers are panicking

As the year draws to a close, it should be a quiet and peaceful time, but there are all kinds of "raindrops" in the circle.

On the platform side, Amazon's scanning efforts have not been reduced with the coming of the year, and are still being tightened. Sellers have been reporting that their accounts have been blocked, and after the video verification, they received an email from Amazon, and the verification difficulty has increased by one level.

An industry insider said that this regulation will affect more than 90% of sellers, and the most fatal blow will be to old sellers. However, even with such strict rectification by Amazon, it still cannot stop sellers from finding loopholes. They tried to cross the line by asking for reviews, but they ended up "falling over".

The logistics side is not peaceful either, with fraudulent accounts still rampant. A number of sellers had their goods detained, and they were extremely anxious. However, USPS once again took action to rectify the situation, which also exposed the illegal operations of freight forwarders. In the chaotic freight forwarding industry, such cases are not accidental.

With the two major ports of platforms and logistics "raining", competing platforms such as Temu are snatching food from the tiger's mouth. Sellers are no longer inclined to price wars, but are shifting from selling products to building brands. Some sellers also choose to leverage platforms such as TikTok to combine orders and successfully achieve multi-channel success.

Video authentication has been upgraded again, and a group of sellers are going to suffer

The theorem that there would always be trouble during the peak season has now also appeared during the off-season such as the New Year. Recently, the frequency of Amazon video verification seems to be getting more and more frequent, and sellers have reported that their accounts have been blocked for violating the "Business Settlement Agreement 3".

According to the seller, he conducted the video verification as required. The questions asked during the verification process were all about general information related to the legal person, store operations, company collection and suppliers. After the verification was successfully completed, he thought he just had to wait for the account to be restored, but he never expected to receive an email from Amazon.

The email mentioned that sellers need to provide two pieces of information to complete identity verification: withdrawal records of the third-party payment collection in the past six months, and withdrawal records of the bank card bound to the third-party payment collection in the past six months (beneficiary account).

In the past, Amazon reviewed mostly bank statements of credit card payment accounts, but now it involves bank statements of third-party payment accounts, which shows that Amazon wants to dig deep into the ultimate beneficiaries of each store. According to sellers’ feedback, the situation that triggers the review mostly occurs on old accounts, and may occur when a certain site payment is not bound and the balance is not withdrawn.

As soon as the news came out, many sellers felt nervous.

As we all know, sellers with a large number of accounts usually use the method of collecting payments by misname and collectively collecting payments. This means that the actual beneficiary information of many accounts is often not a legal person. Of course, another situation is that the actual beneficiary of this account may be the actual beneficiary of multiple different accounts. Once they are linked together, there is a high possibility of association.

An industry insider revealed: "Amazon will implement a new policy to directly collect payments from corporate bank cards." If true, it is estimated that it will affect more than 90% of sellers, after all, some sellers with multiple accounts all have their accounts from the same payment account. A big seller with hundreds of accounts said bluntly: "It took a lot of effort to get all the payments back a few days ago, and now this weird thing has happened. There is no way out."

If Amazon requires bank statements for every account, and all these statements are attributed to one person's bank card, then it would be interesting, but it is unlikely that Amazon will cut off its own hands. On the contrary, if the bank statements and consistent reconciliation records cannot be provided, then the seller is likely to lose both money and goods.

In this regard, some industry insiders suggest that if sellers want to ensure safety, it is best to let the money go through the bank card account of the legal person. Sellers who operate multiple accounts can use different payment platforms to collect payments, thereby eliminating account association review.

Previously, there have been cases of video verification of the beneficiary's residential address. If Amazon adds bank account statements to the residential address for double authentication, it will undoubtedly be another layer of shackles for sellers.

Amazon is increasingly tightening its auditing efforts, and naturally its requirements for audit-related materials and questions are becoming more and more detailed.

According to sellers, there have been many cases of new accounts triggering video verification recently. The surge in sales of new accounts triggered enhanced video review verification, and the questions asked even mentioned IP addresses and credit card related information. Recently, many sellers have triggered virtual identity verification, and due to improper operation, verification failed, and they were judged to be suspected of participating in deceptive or illegal activities. Their accounts were directly deactivated and their funds were frozen.

In summary, in order to improve the standardization of the platform, Amazon has introduced a variety of account verification methods. In addition to the aforementioned methods, there are also supply chain video verification, payment video verification, etc., and the questions raised are also bizarre. Even though Amazon has been constantly rectifying, there are still a large number of sellers who cross the cordon and find ways to exploit loopholes. Requesting reviews is a major reason that has caused many sellers to "break their backs" recently.

Since the end of 2023, sellers have received bad news one after another. Several stores have received warning letters from Amazon, which directly point out that they contacted buyers to ask for reviews through "offline postcards." This method of asking for reviews, which is considered by buyers to be relatively "safe," is to obtain the buyer's order address through various channels, send the review request card offline, and return a gift card if the review is successfully left.

Different from traditional reviews, these reviews are all left by natural buyers, which is less risky. However, they still cannot escape Amazon's control. The platform has identified that a certain number of consumers have left reviews for the same link and have bound gift cards of the same amount. The platform then issued warnings to these accounts.

The tree wants to be still, but the wind does not stop. Even though the official platform has been cracking down on various behaviors, in this cat-and-mouse game, there are still a group of "warriors" who continue to decipher loopholes and find ways to make quick money. The so-called "raindrops" in the circle are not only reflected on the platform, but also on the logistics side.

The scam account was exposed again, and a large number of sellers’ packages were seized

In May 2023, a fake waybill case worth 420 million RMB was reported in the cross-border circle. Since then, UPS and USPS in the United States have begun to deal with fake waybills, account fraud and other issues on a large scale, and many sellers were deeply affected at the time. However, since then, the sequelae of the account fraud incident have gradually become prominent, with sellers' goods being detained and freight forwarding companies losing money, and disputes between the two have arisen one after another.

Recently, another seller revealed that the freight forwarder they cooperated with used a phishing account, causing the company's more than 20,000 goods to be detained by UPS. However, the freight forwarder claimed to be on the whitelist and neither conducted an investigation nor issued a review. According to the data the seller checked on the UPS official website, the batch of goods has been in transit for more than 4 months, and the freight forwarder still has not provided a solution, and the matter has not been followed up.

The seller said: "If the item is lost, the freight forwarder can provide proof of loss." The key point is that the UPS official website does not show anything, and there is no progress on the claim. The salesperson said at the beginning that the goods were detained by UPS, but there was no news for several months. What else could it be but a water-laden account?

Overall, the current situation of the seller is similar to the previous account failure. The seller's logistics information has not been updated for many days, and the freight forwarder is shirking responsibility, which increases the possibility of a water-laundering account. It is not ruled out that the goods will be stopped from being delivered after inspection, or even the customer will be required to pay to redeem the goods, destroy them, or pursue legal responsibility.

If the seller's goods are detained because of the leakage of accounts, then the possibility of getting the goods back is not high. But even so, the huge profits behind the leakage of accounts still make many freight forwarding companies take risks.

Since the beginning of December, sellers have been reporting that they have encountered "fake labels", such as "USPS package was detained and a fake label was shown", "I spent the money for a regular label, but was sent a fake label", "I hired someone to put a UPS label on me, they kept saying it was regular, but it turned out to be a fraudulent account and the goods had been detained". These reports have made many sellers very anxious.

Fake delivery bills, also known as fake accounts, are those that are not authorized by USPS. After cracking the USPS delivery bill numbering rules, they are directly printed and shipped. These accounts can be reused, and the cost is almost zero. This has also led some logistics companies to choose to attract customers with low prices and make money through fake delivery bills.

"As early as 2022, many fraudulent accounts disrupted the market and snatched customers at ultra-low prices, and regular accounts had no choice but to give in," a freight forwarder said helplessly. Once they are inspected, they will be required to pay the freight or downgrade the discount. In serious cases, the goods will be seized, destroyed, or even prosecuted and held accountable for relevant legal responsibilities.

However, USPS has not been lenient with these accounts and is carrying out a major rectification. The above-mentioned seller’s package being detained is a very clear example. Industry insiders revealed that the US logistics system has been upgraded again, and a large number of fake postal services have been found in 36 states. In December, USPS showed a trend of strict inspections, and the US police began to step up their crackdown on fake postal services.

On its official website, it can be found that USPS has already dealt with these fake delivery orders and will not return or deliver them, which means that the sellers whose accounts are found to have been compromised will only lose money and goods. For this reason, USPS has also set aside a special reward of US$50,000 for those who report fake delivery orders from accounts that have been compromised.

The reason why USPS is cracking down on fake delivery bills is closely related to the erosion of huge profits. It is understood that in 2023, the total net loss of USPS reached 6.5 billion US dollars. After deducting the increase in labor costs, fake delivery bills were the biggest reason for the heavy losses of USPS. In 2023 alone, the freight charges of USPS's suspected water-laundering accounts amounted to billions of dollars.

The source of the fake postage stamps, or the creators, are mainly located in China. According to Fox News data, USPS stamps made in China are sold at 7.7 cents each, 88% lower than the official price of $0.63. If the quantity is large, the price will be more favorable. In addition, the printers they use also have functions such as anti-counterfeiting detection ink, which is not much different from the official postage.

In order to reduce expenses, some logistics companies choose low-priced fake waybills and use them to ship goods without the seller's knowledge. In May 2023, a large fake waybill case occurred in the United States. The Chinese owner of a Los Angeles express delivery company was summoned by the federal agency and accused of shipping more than 9 million parcels containing fake waybills in the past 6 months, causing USPS to lose more than 60 million US dollars.

But, in the end, the seller suffered heavy losses. The package worth 9 million became stolen goods, and the seller lost both money and goods.

After years of deep involvement in cross-border business, sellers have a deeper understanding: no matter whether it is overseas warehouses or last-mile delivery, once the goods arrive overseas, it is like a kite without a string and cannot be controlled. Sellers can only understand the dynamics through online communication. If they choose an unreliable logistics company, it is common to lose both money and goods.

No longer in a low-price spiral, but turning to branding, sellers leverage TikTok to achieve explosive sales

With the tightening of platform policies and the continuous collapse of logistics, Amazon sellers are facing a difficult time. 2023 is a year of great competition. Emerging platforms such as Temu, SHEIN, and TikTok Shop are developing rapidly, snatching users overseas and successfully taking a share of the pie from a number of established players.

Temu entered the market the latest but became the most aggressive participant in 2023. Replicating Pinduoduo's model in China, Temu successfully promoted the cost-effectiveness of China's supply chain overseas.

The advantages of being in line with the European and American markets have pushed Temu to soar all the way, and it has successfully entered more than 40 countries and regions including North America. As of December 2023, the number of Temu's independent users has reached 467 million, on par with AliExpress, ranking second in the global e-commerce rankings.

SHEIN and Temu, who both pursued the cost-effective route , fought each other from poaching talents to going to court. The struggle between the two companies basically lasted throughout 2023. SHEIN, which developed with the "self-operated + platform" model, reaped great rewards last year. According to foreign media reports, its annual sales exceeded 200 billion yuan. At the same time, SHEIN won the championship in global shopping app downloads in 2023, while Temu and Amazon ranked second and third respectively. In 2023, SHEIN's global user scale reached 90 million.

Although TikTok Shop was launched late in the US market, it has been unstoppable. Shortly after its launch in the US, the total number of new users entering the TikTok Shop platform in a single month exceeded 5 million, and major sellers including Anker announced their entry. Overseas data is on the rise, and TikTok has also set a goal for the new year, with GMV reaching US$50 billion in 2024, more than double the target figure of the previous year.

It is foreseeable that platforms such as Temu will continue to soar in overseas markets in 2024. However, the overseas conquest of these platforms has also caused many sellers to suffer from the impact of the volume in the past year.

With the economic downturn and the sluggish consumer market, more sellers have been emphasizing the low-price spiral in the past year, even at a loss, to drive sales with low prices. It can be said that in many cases, the low-price spiral has indeed brought orders to many sellers and solved some inventory backlog problems.

However, the current situation has gradually changed with the advancement of platforms such as Temu. Temu and other platforms have taken the initiative to launch price wars to seize the initiative. During this year's Black Friday, they successfully beat sellers on Amazon and other platforms through preferential policies such as "UP TO 90% OFF" and "subsidies for users and merchants".

Sellers on the Amazon platform generally face a situation: low-priced products do not sell well, and high-priced products have few orders. If sellers want to place orders, they have to continuously increase their advertising budgets. All in all, sellers have almost no profit, which means that the sellers are wasting their time on Amazon.

On the other hand, some brand sellers are still performing steadily, and even performing well. In the list released by Google and Kantar, more than 20 cross-border e-commerce industry brands including furniture and gardening, online fashion, and smart devices were listed. Whether they are veteran players such as Anker and Savi, or new brands such as Cider and Cupshe, one of the core factors for their success in overseas games is brand.

Many wholesale sellers are switching to the brand track. After experiencing market pains, they are seeing a steadily rising annual compound growth rate.

Take Saiwei as an example. It has 63 private brands with revenues exceeding 10 million yuan, accounting for 88.07% of its merchandise sales revenue. Among them, 21 brands, including homewear brand Ekouaer, menswear brand Coofandy, underwear brand Avidlove, and sports equipment brand ANCHEER, have operating revenues exceeding 100 million yuan. During the brand transformation process, the sales share of its branded products increased from 73.92% in 2019 to 97.23% in 2021.

Short-term arbitrage, quick sales, or long-term persistence in building a brand, these are two completely different paths. Under the impact of the big wave, more and more sellers realize that the peak of short-term arbitrage dividends has dissipated, while the brand wave is gradually rising. More sellers are no longer pointing their guns at their own people, but are moving closer to branding.

In order to escape from the internal competition, some sellers choose to leverage platforms such as TikTok and Temu, and use the dual-channel operation model to complement product selection and traffic generation, and successfully achieve explosive sales.

TikTok Shop has a large user base. DataAI data shows that TikTok has nearly 1 billion monthly active users worldwide. Among them, TikTok has more than 150 million monthly active users in the United States, close to 45% of its total population. American users spend an average of 2 hours on TikTok every day, far higher than Amazon's daily usage time of 9.7 minutes.

The content + shelf is developed in the form of advertising recommendation through the influencer marketing model, which is short and powerful, and directly hits the user's pain points. A seller said frankly that users will become interested in the product unconsciously, and after being attracted, users will search for the product. At this time, users can seamlessly trade directly on the site, which is equivalent to one-stop shopping.

Compared with traditional e-commerce sellers, whose traffic sources are mainly search-based, the traffic is more focused on top merchants, so the marketing space is relatively limited. TikTok's ecological content and personalized recommendations bring greater possibilities for products. Interest recommendations based on the community are more likely to break the personalized circle and increase product exposure.

Although Amazon is still the platform with the most development potential, with the emergence of new platforms and new incremental entrances, more and more users and sales are being snatched away, and sellers should also look further ahead.

In the eyes of some sellers, whether it is to attract traffic or sell goods, TikTok Shop is the first choice for many sellers to partner with Amazon. Although TikTok is not suitable for high-priced products, it can be used as an additional channel, such as distribution and bringing goods. With more foreign creators, domestic sellers will also have more possibilities on TikTok Shop.

It is undeniable that continuing last year's momentum, emerging platforms will continue to soar in 2024. Sellers can also choose appropriate channels for cooperation while deepening their presence on Amazon, which may spark new sparks.

Amazon

Video Verification

Water leakage account