Sales volume plummeted in August! Sellers’ goal: reduce losses

The number of orders is being pushed to the ground , and the sellers are wondering: Who is causing the surge in orders ?

Many sellers use Amazon Prime Day to "hurry up and rank at a loss". They thought that sales would gradually improve in August, but traffic was far worse than before. The European and American markets fell drastically. Sales of many sellers selling summer products were also terrible, and they all felt that "the game was over". Many sellers, including big sellers, are clearing out summer product stocks at super low prices. Small sellers have no choice but to say that it is okay to lose less.

As the number of orders dropped sharply, Amazon's advertising effectiveness also deteriorated visibly . Advertising ACOS and other indicators hit new highs . Advertising costs increased , but product prices continued to decrease. Is this year destined to be another year in which no money is made?

Some are pessimistic and some are optimistic, but there are still many sellers looking forward to the upcoming peak season .

Ad conversions plummeted, and many sellers’ orders plummeted

Recently, the topic of "product order volume is lower than expected" has become popular again. Sellers in many categories on European and American sites are all going downhill, and sellers are complaining:

After entering August, the keyword rankings are average and even the advertisements can’t be pulled up!

The recent advertisements are terrible . The conversion rates of both new and old products are much lower than before .

Orders in August fell by about 60%, but unexpectedly, the order volume in July was the best.
Sales volume is only 70% of last year’s and the company is clearing out inventory at a loss. Can it hold up during the peak season in the second half of the year?

Located in the European site, the advertising performance has been very poor since August, and the ACOS is very high.

ACOS is so scary that I don’t even dare to run ads now.

It turns out that everyone is so miserable. Have the people in Europe and the United States run out of money or have they changed their consumption platforms?

…

Judging from the feedback, at the beginning of August, the declining order volume and rising advertising costs are besieging a large number of sellers, which is in sharp contrast to the past.

Xiao Zhang (pseudonym) said that although the orders in July were lower than expected, fortunately ACOS could still be controlled within a reasonable range . Since August , the orders have been lower every day , and the ranking in major categories has dropped to tens of thousands . Even heavy advertising is of no avail. In addition, most of the peers are doing on- site flash sales or huge discounts, which seriously reduced product sales and profits.

Xiao Liu (pseudonym) also felt that the ACOS of advertising has soared in recent days, but sales have dropped by more than half. As of August, the overall advertising orders account for more than 50%, and advertising costs have remained high. Once the advertising stops, the orders plummet, and the input and output do not match. By comparison, Xiao Zhang's ACOS last year was still able to maintain at 15-18%, and this year it has reached 30-35% , and there is a trend of continued rise in the future .

The fluctuations of new products are even more puzzling. There are many complaints such as "A new product on the shelves has an ACOS of 200%", "New products are extremely difficult to promote, and the ACOS suddenly exploded, rising from 20% to 150% ".

It is understood that some sellers spend 1 US dollar for each click on their product ads, while others spend 3-4 US dollars or even more. In recent years, advertising costs have been getting higher and higher, but conversion rates have plummeted year-on-year. Some people's advertising conversion rates exceeded 25% last year, but this year they only reached about 10%. It can be said that the advertising effect has plummeted. Every click by a consumer is a loss of real money for the seller.

In summary, Amazon’s advertising effectiveness has deteriorated visibly since the beginning of this year, with high CPC , high clicks , high ACOS , and higher platform fees . However, sellers still cannot escape the fate of low conversions and low profits , and they all lamented that it is becoming increasingly difficult to do business on Amazon.

Without advertising , there will be no orders, but with advertising, the sellers cannot afford it. Many sellers selling high-priced products have said frankly that they can't afford it, and many low-priced sellers are also struggling. Considering that Amazon is going to cancel the small and light plan, some sellers have already planned to withdraw from the low-priced product track.

The rising advertising costs for sellers can also be seen from Amazon's relevant data. Marketplace Pulse data shows that Amazon's online retail infrastructure business, such as advertising services, has grown 3.7 times in the past five years, almost twice the growth of its online sales. In the second quarter, Amazon's advertising service fees reached US$3.2 billion .

On the one hand, the advertising budget is over budget, and on the other hand, no one is interested in product advertising. At present, many sellers are still facing the situation of "no advertising money and no product exposure". Some people used to spend more than the budget every day, but now they can only spend 20% of the budget every day.

According to analysis by industry insiders, the current external environment is still not optimistic. The incremental market has gradually become a stock market. A large number of European and American buyers have downgraded their consumption, and sellers have chosen to open a price war. However, new platforms such as Temu are also intercepting Amazon sellers' orders at low prices. Other platforms are eyeing them covetously. The internal competition on the Amazon platform has intensified, and it is reasonable that "many sellers' advertising has exploded but orders have shrunk ."

Big sellers are clearing out summer product inventory, small sellers: just make a small loss

It is worth noting that due to the poor sales of a large number of seasonal products, the relevant sellers have suffered losses to varying degrees, and their wishes have changed from “just breaking even” to “just losing as little as possible.”

More than one seller has reported that the promotion of seasonal products such as clothing and water toys has been very poor this summer , and they have been losing money since the launch. Some people have made a small profit, but just after replenishing summer products, they found that many best-selling categories have begun to clear inventory at super low prices. The war to clear inventory has already begun, and the inventory on hand has become a "hot potato" in seconds.

The European and American markets are gathering places for Chinese sellers. Judging from the export data, China's export data to the EU and US markets in July both declined to varying degrees. In the eyes of cross-border sellers, is the US market more attractive at this stage or the European market?

Huakai Yibai, a cross-border seller, said in an institutional survey that the current differentiation between the European and American markets is quite obvious. Europe used to be the company's largest market, with major countries including the UK, Germany, Italy, France and Spain accounting for more than 50%, but the current European market share has dropped to around 30%-35%. The growth in the United States, Canada and Mexico is very strong, currently accounting for more than 40% of the company's overall revenue. Overall, the North American market is relatively strong, and the European market is under some pressure, but the decline in the European market is gradually narrowing.

In addition to the big sellers, many small and medium-sized sellers also said that the pressure to make money in the European market has increased again this year. Xiao Li (pseudonym) is one of them. He said that the return rate in Germany was originally high, and this year the return rate has doubled. The UK site is also questioning life. The order volume is relatively low, and the tax to be paid is not small. In addition, the price war is also very serious. The hot-selling products originally priced at US$6.99 are killed by a bunch of the same models priced at 1.99 and 2.99, and every order is sold at a loss.

There are endless voices about plummeting sales. Who is making money from the huge sales? Is this year destined to be another year of no profit?

Judging from the feedback, although there are constant complaints, there are still a large number of sellers who are optimistic about the upcoming peak season.