Seller quits Amazon after selling store for 20 million

One of the main ways for domestic sellers to engage in cross-border e-commerce is Amazon. Since the beginning of this year, Amazon has successively raised a number of fees such as FBA delivery fees, making traffic more expensive and operating difficulties more difficult. Some sellers are busy optimizing platform operation strategies, hoping to make it a sustainable business; other sellers believe that this business has reached a turning point, so they retreated and quit Amazon sellers.

A 10-year Amazon seller recently quit Amazon because his input and output were not proportional. During the epidemic, cross-border e-commerce was booming, ushering in a large number of newcomers. Now they have also completed a round of elimination, and those who are losing money or not profitable have gradually withdrawn. With the accumulation of operational challenges, the reshuffle of Amazon sellers has accelerated.

"It's getting harder and harder to do business", seller sells store for 20 million

The e-commerce industry is changing rapidly. An Amazon seller said that he once bought a house with a link, but three years later, the link received less than 5 orders a day. Not only are products updated quickly, but the seller groups on Amazon are also changing.

Lin Yongxin is a cross-border e-commerce seller in Guangzhou. He has been doing business on Amazon for 10 years and has an operations team of more than 50 people. But he told me in a chat last week that his company will no longer do business on Amazon in the future.

"I feel that it is getting harder and harder to do business on Amazon. I have already sold my store. The large size sold for 20 million, and the small size sold for more than 500,000 . I feel relaxed now and sleep well at night. I used to be so anxious. "

Lin Yongxin admitted that if it was profitable, no one would want to sell the store. This year, his profit on Amazon was just enough to break even, so he sold the store to make some money. It was not easy to withdraw so decisively, but he thought there was no need to continue: "Amazon is not like before. I can't make much money. The energy invested is not proportional to the return."

In more detail, Lin Yongxin's withdrawal was based on a combination of considerations: the tension in Sino-US relations, Amazon's crackdown on sellers, and the internal competition of domestic peers. He said that it would not be a loss to sell the store now , but if he did not sell it, he might have to pay for the suite.

In his opinion, the main difficulties faced by Amazon sellers are malicious competition from peers and malicious complaints from customers, which consume most of the energy of most sellers.

Lin Yongxin was authorized to sell legitimate products, but his peers who sold fakes complained about him and succeeded, causing his store to be closed for a few days. The previous advertising was in vain, and the data was lost and he had to start all over again. In addition, Amazon regards customers as gods. For example, if a toy is delivered to a foreign customer and the customer breaks it after playing with it for a few days, he will file a complaint and claim compensation. If the seller does not compensate, it will be difficult to settle the matter.

" I can't say Amazon is bad, I can only say that the business environment is changing too fast. I used to make a lot of money selling on Amazon, but now it's not possible. I think it's a problem with the platform, it's resting on its laurels and not making progress. "

The overall operating difficulty on Amazon has increased this year. The platform has been active and has made many adjustments to the front-end pages. Sellers are also continuously optimizing their operating methods, hoping to find a path for long-term development.

Lin Yongxin understands the persistence of most sellers: " They may want to take a gamble, or the platform may have improved slightly, and they have invested a lot and are unwilling to give up, so they are waiting for the situation to improve. I didn't increase my investment too much after making money in the early stage, but many people are too deeply involved in the platform and have no way to withdraw even if they want to. "

After the explosion of popularity during the epidemic, the "exit trend" emerged

Indeed, many sellers have fallen into trouble. @Amazon Fisherman said that price wars have ravaged all categories like a flood and beast, and unprofitable links are everywhere. The "Wu Sangui" strategy, price spiral, and low-price matrix are all helpless moves. Everyone knows that this is just a poison to quench thirst.

"Old sellers all know that traffic is decreasing. For the same category ranking, the orders this year are much less than last year. Some markets have been cut in half, not to mention profits. If traffic is not enough, it will become more and more expensive, and the CPC price will rise step by step. Now, a click on any word costs about US$3, and there are many words that cost US$5 to US$7."

Recently, Amazon has raised its logistics fees again . Sellers lamented that it is becoming increasingly difficult to do business on Amazon, as traffic costs are becoming more and more expensive. They have to spend money on warehousing, transportation and other links, but they don’t see any money coming into their pockets. They once doubted their own operational capabilities.

With rising costs and more volatile prices, it is expected that profits will fall. One seller counted that his order volume in July increased by 45% compared to last year, but his sales were the same as last year. Although the exchange rate was more friendly than last year, his profit this year was cut by 80%. Another seller also said that his order volume doubled but his profit was cut in half.

As profits declined, some companies lacked motivation or suffered heavy losses and were unable to sustain themselves, and a wave of exits quietly formed.

Some sellers pointed out that a group of sellers who entered the Amazon market due to the pandemic have survived for two years. If they still can’t get back on their feet and don’t have the old links, categories and supply systems, they will most likely not survive this year. “A person I interviewed today said that his former company delayed delivery before the peak season, but after replenishing the goods, the links could not be established and faced losses, so the company was disbanded. Such examples should be common in the industry.”

Seller @跑的法老 also told a case. After the outbreak, a friend was determined to do cross-border business. After three years, the company survived, but the investment of more than 3 million yuan has not yet returned. The team's monthly sales are more than 200,000 US dollars, the expenditure is about 150,000 yuan, and the net profit last year was about 500,000 or 600,000 yuan. Now it is time to prepare for the peak season. Compared with the traditional sector that has recovered, the input-output ratio is much worse, so he is willing to take action.

Newbies enter the market cautiously, veteran sellers look for new channels

Sellers in the circle feel that it is difficult to make a living, while people outside the circle smell business opportunities and are looking for opportunities to enter the market.

According to Amazon data, as of June this year, nearly half of the Chinese sellers on Amazon have conducted business in two or more international sites. In the past 12 months, the number of Chinese sellers on sites other than the US site has increased by 45%.

Lin Yongxin also has friends who want to join the industry. " A young man born in the 2000s asked me if he could do business on Amazon. I told him that the risks were high and he needed to think carefully. 50,000 yuan was only enough to try out the operation process. If he wanted to do it well, he would have to invest more. Then I told him what he needed to do to open a store. He listened very carefully, but I guess I didn't persuade him back. "

He does not approve of Xiaobai's blind optimism in entering the market.

"According to the current business environment, those who know how to play can break even, the big guys make a small profit, and the newbies are harvested. Once they enter the game and cannot get out, they will regret it. The snowball will get bigger and bigger, and the losses will increase. They are so anxious that they can't sleep at night. Some of my old friends are in this state. They lose a lot of hair, went bankrupt twice, and have high debts. Later, they became experienced and paid off their debts and quit the game, but they still suffered a lot of losses after quitting. "

Some sellers pointed out more sharply that Amazon is now a red ocean everywhere, and it is no longer an era where newbies can make money.

Platform rules change very quickly, so you need to be calm when investing. Lin Yongxin suggested that if you want to do Amazon, you should invest a small amount in the early stage, and then invest more appropriately after understanding the rules. If you make a loss, you can withdraw part of the investment in time to stop the loss. Try all the processes of store registration and operation several times, and don't be lazy and rely on service providers. The lazier you are, the faster you lose money.

The entry threshold has increased, but most Amazon sellers in the siege have not changed their ways, just hoping to make this road smoother. In addition to deepening their roots in Amazon, sellers who are struggling to grow have other ways out. This year, new channels and new markets have continued to emerge, and many sellers have entered platforms such as Temu and SHEIN, hoping to draw a new growth curve.

Some sellers have begun to consider the domestic market. Next, Lin Yongxin plans to build a domestic platform. Although the domestic market is competitive, it is more stable than the international market. He will also try the Southeast Asian market. He is currently investigating relevant platforms.

In the first half of 2023, China's cross-border e-commerce exports increased by 19.9% ​​year-on-year, and the cross-border e-commerce pie is getting bigger and bigger. The emergence of new platforms and the disruption of the full-hosting model will bring new development opportunities to the cross-border e-commerce industry.