New function launched, Amazon takes action to rescue order volume!

Amazon has been unable to tolerate the recent sluggish orders. This week, the platform launched a new promotional activity, which provides discounts ranging from 3% to 10% at Amazon's expense. The conversion rate of products that receive the promotion has increased, and sellers are overjoyed.

Sales in October were lower than expected, and sellers had excess inventory. What was even more tragic was that due to the short timeliness of the first-leg logistics, a large number of goods arrived at the warehouse ahead of schedule, and the storage fees during the peak season were raised again.

The good news is that the order volume has shown signs of improvement in the past two days. Senior sellers analyzed the data of the past three years and believed that the peak season basically starts on the first day after Halloween, and then the traffic gradually increases. This year's peak season may still be relatively "busy".

Amazon offers discounts amid sluggish sales

In the past week or two, sellers have been on pins and needles due to declining sales, with no sign of the peak season. As Temu, TikTok Shop and other platforms have already launched their Black Friday promotions, Amazon has directly provided discounts and subsidies for products in order to increase sales, and the conversion rate of selected products has increased.

This week, some sellers found that the product page had a "Buy 2 or more, save*%" promotion logo, which means that buyers can enjoy a certain price subsidy if they buy two or more items at a time. For example, if a buyer buys 2 items worth $10 each, the promotion offers a 10% discount, and the final checkout page will show a total discount of $2 and a total price of $18 after the discount, which is $9 per item.

The sellers themselves did not set the discounts, but Amazon paid to encourage users to place more orders. Amazon said that this promotional discount is provided by the platform for a limited time and is applicable to products shipped by Amazon. The maximum number of items in each order that meet the quantity discount conditions is 5.

According to feedback, different products enjoy different subsidy ratios, ranging from 3%-5% to 8%-10%. A home product priced at $6.99 was discounted by 16% by Amazon, and the product conversion rate improved; this logo also appeared in categories such as gardens. One seller said that the conversion rate of the product increased significantly after receiving a 7% subsidy, so the average order value was increased by 20%.

Sellers who have received subsidies speculate that Amazon’s move is intended to stimulate sales:

“Save 5%, is Amazon going to start subsidizing it out of its own pocket?”

"I have it too, save 7%, it's shown on both the phone and PC."
"Some of my products have it too. Could it be that they were surrounded by Temu and couldn't stand it anymore and sold it?"

“Is it possible that Amazon also felt that the sales volume was not good enough and did this…”

It is a good thing that the platform spends money to help sellers improve conversion rates, so how can you participate? Informed sellers said that this promotion is automatically recommended by the platform system and sellers cannot submit their applications. Which products will be selected? The promotion does not favor top sellers. In many categories, the products that are subsidized are not top products. Some analysts believe that the recommended products must meet the basic conditions of price advantage and sufficient inventory.

"Our category generally has a 3% to 5% discount. Products between $20 and $40 generally have this discount, but products at higher prices don't. I don't know if price is an influencing factor."

During the event, a product may not continue to be subsidized, and the discount ratio may change dynamically. There may be a promotion logo on the product link, which disappears after a few days, and there may be a product whose discount ratio changes from 4% to 6% after a few days.

Last year, this discount was also displayed on some products on Amazon's front page. If the participating products are returned, the refund amount is equal to the amount paid by the buyer. Referring to the example above, the buyer will be refunded $9 for each item returned.

In response to the decline in user consumption, Amazon is also testing a new "Buy Again" feature to encourage users to make repeat purchases. According to foreign media reports, this feature will occupy a prominent position on the homepage of the Amazon application and recommend through the buyer's order history, especially in categories such as electronics and groceries.

Logistics speeds up and inventory arrives earlier, sellers bear more storage fees

From the overall situation in October, the sales of many sellers were lower than expected, which led to the surplus of previous stock. The seller lamented, " October this year fell 25% year-on-year, but there is still too much inventory. " "In previous years, I was worried about insufficient inventory in October and November, but this October I am worried about too much inventory. I hope that November will be better." Due to the recent low sales, some operations directly skipped the work of replenishing stocks this week.

Under the background of multiple peak season storage fees and reduced storage capacity in November, sellers' storage pressure began to increase. And this year's logistics time efficiency was unexpected, disrupting sellers' storage plans.

According to past experience, during the peak season, sellers usually use fast and slow ships to cross-replenish goods, which not only ensures inventory supply but also takes into account costs. However, this year, the logistics time has been greatly accelerated. For example, in previous years, it took 50 days from the departure of a general ship to the receipt, but this year it was shortened to 25 days, which resulted in the goods arriving at the warehouse nearly a month earlier.

A seller complained: " During the peak season, we had to prepare for 45 days for general ships , but many of them arrived in less than 30 days. In addition, the sales volume in October was very poor, so a lot of goods were left behind. The storage fee for the goods was very expensive, and we had divided them into many batches to avoid late arrival. " There are many similar sellers. "I thought I was the only one in this situation, but one of the slow ships arrived at the warehouse in 18 days. The storage fee was very high this month." "We estimated the delivery time to be 50-60 days during the peak season, but now there is a lot of goods in stock."

Why is logistics so fast during this peak season? Shenzhen freight forwarder Jack Chen said that this year, shipping companies have reduced their flights and no longer need to go to other ports to load goods. Most of them are direct flights. Secondly, the epidemic is over, and the destination port has sufficient manpower and high efficiency. There is no congestion at the port, and each link is fast, so the overall timeliness is also high.

Prior to this, in order to boost sales or clear inventory, Amazon's price war was already fierce, with the screen full of red and green, and some sellers bluntly saying they wanted to buy from their peers. Now that the storage pressure has increased, it has added fuel to the price war.

The order volume is starting to rise, this peak season will be prosperous

The recent sluggish sales have caused some sellers to lose confidence and lower their expectations for the peak season. Some big sellers are relatively pessimistic about this peak season and have controlled their inventory.

Senior seller @跨跨老张 analyzed that there are two reasons for the recent low sales:

1. The platform has entered the stock stage, and the competition is intensifying and the cost is rising. Because it is a zero-sum game, there will definitely be a rise and fall in traffic during the stock competition period. This has been verified on several domestic e-commerce platforms.

2. Temu's disruption of overseas markets will definitely have a direct impact on some sellers who simply engage in trade, such as sellers who simply "select products based on data" through software, as well as sellers who distribute goods. The most direct impact is a drop in prices, which in turn leads to an erosion of profits, and even the phenomenon of bad money driving out good money in some categories.

Zhang's company's inventory this year has increased by 30-50% compared to last year, and he was a little worried at first. But after the autumn promotion in mid-October, traffic has increased to a certain extent, especially since November, the conversion rate has increased and sales have jumped significantly.

" We have compiled data from the past three years and found that the peak season basically starts on the first day after Halloween. Traffic gradually increases and rises significantly in mid-November. So judging from this year's situation, the peak season should still be relatively busy." Lao Zhang said that he is more confident overall. After all, the overall size of the Amazon platform is huge, and the income of European and American consumers has also increased with inflation, so their purchasing power is still relatively strong.

However, the increasingly fierce competition in the overseas online market has sounded the alarm for sellers. As for the subsequent development on the Amazon platform, Lao Zhang believes that it is necessary to make early arrangements in several aspects:

1. Deepen the categories and tap into deep market demands;

2. Increase product added value and establish certain thresholds and barriers;

3. Optimize the supply chain and control costs;

4. Learn from the relatively mature method of enhancing customer stickiness in the domestic e-commerce market - private domain.

What are your expectations for this peak season and what are your plans for future operations?