Become the top three on Amazon! Another seller starts listing

Changzhou, Jiangsu has "grown" a cross-border giant.

Changzhou Lingyue is a cross-border seller of auto parts , ranking first on Amazon and eBay. The company has more than 3,500 kinds of auto and motorcycle parts, and its turnover exceeded 1 billion yuan last year. Recently, the company has obtained financing and is said to have started its listing plan. While sellers are generally cautious about launching new products, Lingyue plans to double the growth rate of new products from 20% this year. What are the skills required to be a big seller?

The auto parts market is huge and continues to grow. But with Amazon's restriction order on the "headlight" category, how much will auto parts sellers be affected?

Focusing on auto parts, Changzhou Lingyue's annual revenue exceeds 1 billion

This month, Changzhou Lingyue Equipment Technology Co., Ltd. (hereinafter referred to as "Lingyue") announced the completion of strategic financing. This round of financing was exclusively invested by Wujie Innovation Capital, and the investment amount was not disclosed.

Sellers in the industry are no strangers to Lingyue. This cross-border e-commerce company located in Menghe, Changzhou, is mainly engaged in the research, development, production and sales of auto parts, motorcycle parts and lithium-ion bicycles . Its products include headlight series, bumper series, windshield series, exhaust pipe series and stroke series. On the eBay platform, its sales volume ranks first in Greater China; on Amazon, its fenders, bumpers and other categories also rank in the top three , making it a veritable top seller of auto parts .

( Product picture from Lingyue official website )

Lingyue started out by manufacturing motorcycle parts. Ten years ago, he accidentally came into contact with cross-border e-commerce auto parts and began to pay attention to this channel. Through many field surveys in the US market, Lingyue found that the market for auto parts is larger than that for motorcycle parts. For example, there is no scrapping system for cars, which means that there is a long-term demand for auto parts.

In 2015, Lingyue officially transformed and entered the US auto parts industry. It has accumulated thousands of SKUs. To reach its current position, Lingyue has outstanding performance in several aspects:

Taking advantage of the industrial belt. The auto parts industrial belt in Menghe, Changzhou, where the company is located, has a long history and is known as the "Famous Town of Auto and Motorcycle Parts in China". Lingyue has magnified the advantages of this industrial chain, smoothly transformed, and cooperated with multiple suppliers to solve the supply demand for different parts.

Focus on product selection. There are many SKUs for auto parts . Lingyue uses a variety of tools to analyze popular car models on the market, select auto parts products with high ownership and high demand on Amazon, and select products in a targeted manner.

Optimize warehousing and logistics. Compared with conventional products, auto parts, especially collision parts, are large in size and have many different characteristics, so the transportation and storage costs are relatively high. Lingyue has also made efforts in two ways. First, disassemble the product from the production end, for example, split the bumper into three parts, and split the complete set of exterior structural parts into dozens or hundreds of small parts, which are assembled by consumers themselves; secondly, build multiple overseas warehouses in the United States. At present, its self-built storage area in the United States has reached 40,000 square meters, and the goal is to achieve three-day delivery across the United States.

In the cross-border e-commerce industry, such high investment in hardware facilities is relatively rare, and Levo, a well-known smart home seller in the industry, is one of them.

From targeting potential products to optimizing warehousing and transportation, Lingyue has gradually achieved overseas expansion. Currently, it mainly sells to the European and American markets, and its operating platforms include Amazon, eBay, Walmart, and independent websites. In 2022, Lingyue will have more than 3,500 types of auto and motorcycle parts products, with a turnover of more than 1 billion yuan.

Lingyue became the top three in Amazon category and started to go public

Amazon is an indispensable channel for domestic sellers to go overseas, and it is also a platform that Lingyue has invested heavily in. Earlier this year, Amazon Global Store introduced the business secrets of this big seller, "Sales soared 80 times in 7 years." In less than eight years from 2015 to now, Lingyue has achieved its goal of expanding across the United States, and has also ranked among the top three in categories such as fenders and bumpers on Amazon.

Even though it has become the leader in its category, Lingyue still aspires to make a breakthrough in its business. There are many models and accessories in the automobile market, and the company's existing products only account for the tip of the iceberg. If it wants to continue to expand sales, it is essential to work hard on developing new products.

The head of its operations team said that in the past few years, the company's new product growth rate was about 20%, and the product elimination rate was about 3 % -5% . This year's goal is to double the speed of new products and reduce the elimination rate. However, due to the increase in multiple transportation, advertising and other costs, most sellers are very cautious in promoting new products this year.

Lingyue has already occupied a place in the field of online auto parts consumption in the United States. With the existing product scale, it is natural to develop new online target markets, which can also quickly boost sales. This year, Lingyue's goal is to expand sites in Europe, Japan, Canada and other countries to meet the needs of more overseas users.

As Lingyue has emerged on multiple platforms and markets, its scale has made great strides. Recruitment information shows that the company's annual sales are around 170 million US dollars, with an annual sales growth rate of more than 100%; its comprehensive sales rank among the top three in the Yangtze River Delta and first in Jiangsu. Lingyue and its branches have nearly 600 employees, including nearly 200 in the e-commerce operation team , with an average age of only 25.

The auto parts market is huge and has long-term demand. Lingyue has been deeply involved in this category and has implemented the integration of technology, industry and trade. It can be said to be an all-round player with greater development potential. It is reasonable that it has been favored by capital. It is understood that this round of financing will be mainly used for capacity expansion, overseas warehouse construction and the establishment of overseas talent teams. In addition, Lingyue has launched the listing plan, and this year will be the first year of the listing reporting period.

The auto parts market is huge, but the categories of car lights are limited

The global auto parts market is huge. According to statistics, the North American auto parts market will be worth $319.7 billion in 2023, of which mechanical parts will be $243.9 billion and collision parts will be $75.8 billion. In recent years, the online growth rate has been much higher than the offline growth rate, and cross-border e-commerce has a promising future. However, this market is not available everywhere.

Last week, Amazon notified several auto parts sellers that starting October 31, the platform will restrict the sale of light-emitting diode (LED) headlight conversion kits on the US site because they do not meet federal motor vehicle safety standards. The light-emitting diode ( LED ) headlight conversion kit is already on the list of banned products given by the platform .

Amazon's policy came quickly and fiercely. Since receiving the notice, if auto parts sellers have related product inventory in Amazon's operation center, they must create a removal order to return or dispose of the remaining inventory, and the platform may only compensate the seller for the cost of removing the affected inventory. If the seller does not submit a removal order for the affected ASIN within 30 days of receiving the removal notice, Amazon may dispose of these unsaleable inventories. Once the platform creates a removal order, the seller can no longer cancel the order.

For auto parts, headlights are the highest-output and highest-profit category, and are also one of the key categories for sellers. However, Amazon’s notice is equivalent to the entire headlight category being shut down, and the sales ban will take effect next week. Auto parts sellers are struggling to digest this huge change.