Time flies, and going overseas is like a changing world. The cross-border boom in 2020 seems like yesterday, but it has actually been three years. In these three years, countless sellers have experienced ups and downs: from making money everywhere under the help of the epidemic, to falling from the clouds in a wave of account suspension, to the dissipation of dividends and the return of rationality, they have been transformed and grown by the new rules of the game.
As of 2023, the Amazon platform seems to be experiencing more turmoil than in previous years. Since the beginning of the year, from the front page to the backend functions, from algorithm rules to risk control audits, large and small policy "combination punches" have continued. Every subtle ripple caused by platform rectification may be brewing profound changes. Therefore, for cross-border merchants, how to adapt to the big or small changes in the rules of the game and understand the essence of the platform ecosystem changes through phenomena can help them adjust the correct direction of going overseas in a timely manner.
Looking at Amazon's endless actions this year, the most direct impact on sellers is the intensive revision of the front-end page . In March, the sales volume display on the front desk fired the first shot in the page rectification, and launched the high return rate label in the same month; the page views display followed in April; in June, the "more like this" function to find the same model was launched, and the AC logo was replaced by the Overall pick, Popular brand pick, and New arrival pick logo. Since the second half of the year, Amazon has been testing and revising the listing interface: displaying BSR rankings, folding five-point descriptions and QA, not displaying the number of reviews, pre-review modules, testing photo search and one-click video functions... For large platforms, every action, big or small, or seemingly subtle, must be based on multiple motivations. Therefore, before exploring the deeper meaning behind the above-mentioned rectification, let’s return our attention to Amazon itself. From the perspective of internal development, under the impact of macroeconomic uncertainty, Amazon is inevitably hitting its growth ceiling - revenue growth is slowing down, Prime users are losing, and third-party sellers are leaving. As for the external environment, under the trend of consumption downgrade, Chinese cross-border platforms led by Temu are deeply immersed in the source industrial belts, forging low-price weapons to directly capture the minds of overseas consumers, trying to pry open the market territory that Amazon has long occupied from the perspective of cost-effectiveness. Faced with the heavy pressure of performance under internal and external troubles, Amazon decisively swung the knife to "self-destruction": layoffs, reductions in recruitment, and slashing marginal businesses. After focusing on the development focus, Amazon's performance successfully rejuvenated the new year - Q2 net profit soared 433%. However, there is still a concern about the slowdown in growth behind the gorgeous profit curve, so it is inevitable to make changes to the retail business. How to defend the existing stock market and tap into new growth space? Amazon knows that the answer lies in the flywheel model on which it relies for growth. Amazon's flywheel starts with user experience. Better consumer experience will drive customers to the platform, promoting natural traffic growth; and more traffic will attract more sellers to settle in, providing a richer selection of goods, which in turn drives up customer experience. As the flywheel keeps turning, it will gradually form a lower cost structure, which will bring lower prices, and once again act on improving the consumer experience. Rich and diverse product selection, mature and complete product services, and lower prices are the driving force that maintains the cornerstone of consumer experience and are also the core pillars of Amazon's flywheel to form a virtuous closed loop. But now, this flywheel is facing the challenge of being broken by competitors one by one. Temu relies on extreme supply-side control to hit the low-price barrier, TikTok Shop, which has opened up a new content e-commerce track, relies on a huge native traffic pool, and SHEIN, which started as a DTC independent website, also has experience in optimizing consumer services with a customer-centric approach. User experience, traffic, lower costs, lower prices and other links constitute Amazon's growth flywheel, which are closely linked and gradually superimposed to form a spectacular flywheel effect. For this reason, simply optimizing a single link is not enough to re-mobilize the increasingly cumbersome flywheel. Temu is coming on strong, and the ultimate cost control is behind the absolute price crushing. Faced with the loss of its low-price moat, Amazon has successively made changes to the front-end - displaying sales, page views and BSR rankings, and launching the "more like this" function to find the same product. The direct motivation behind this is to intensify the price-performance war. The former takes advantage of consumers' herd mentality. In the decision-making process, they often unconsciously lean towards the popular choice and tend to choose products with high sales, high exposure and high ranking. In this case, if the mid- and downstream links want to grab consumers' attention, the simplest and crudest way is to reduce prices. After all, low prices are always the first driving force. In this way, Amazon's goal is achieved. The latter is to put the same competing products on the buyer's table for comparison and selection. When product differentiation is not very obvious, price is the most intuitive and critical factor in competition. This naked and efficient price comparison model can not only stimulate sellers to seize the high cost-effective land, but also force public model products to improve quality control and escape the trap of homogeneity in the long run. However, if Amazon only focuses on the low price dimension, it will obviously fall into the trap of price war with Temu. Amazon is well aware of this and once threatened to kick Temu products out of its price comparison system. Price advantage is only one link in Amazon's flywheel. If Amazon wants to make the flywheel turn gradually and at a high speed, it must launch a multi-dimensional precise "strike" around user experience. To a certain extent, old products with deep accumulation have more advantages under the above-mentioned revision, but old products have long dominated the top market share, and it is easy for them to crush new sellers by relying on the advantages of early entry, especially in the early stage. A large number of links use gray means such as fake orders and evaluations to seize weight and firmly occupy the top "nail households", which is certainly not what Amazon wants to see. Amazon’s second move was based on this layout: testing the waters by not displaying the number of reviews, folding the five-point mark and QA, hiding the star rating and the front-end review module. The more the old products monopolize, the narrower the space for new products to survive, which will lead to a lack of market activity and be unfavorable for the richness of products to flourish. For this reason, Amazon has taken the source of new products and new models through page rectification to revitalize the stagnant categories dominated by old products for a long time. In this way, it gives more power to the "rich product selection" link in the flywheel. Of course, Amazon’s deeper motivation is essentially to guide sellers back to the original intention of their products. On the one hand, it is to kill gray methods and give the stage to white hat operations. In the case of little product differentiation, white hat operation ability is a major factor in determining the winner. Big data will tell Amazon which sectors customers value more, so its rectification must be based on customer experience. What sellers need to do is to strengthen their product advantages and improve conversion rates through advertising and listing optimization. On the other hand, it promotes the survival of the fittest among products. In the face of increasingly fierce competition and constantly changing platform rules, in order to maintain the life cycle of the link, it is inevitable to polish the product strength and brand strength. In 2023, Amazon, trapped both internally and externally, faces a more complex and difficult living environment, so it is constantly seeking change. In Amazon's flywheel, any imbalance in any link may trigger a chain reaction, causing growth to stagnate. For this reason, its many policy rectifications are based on overall business logic.
The core of the same platform change, the frequent revision of the front page is just one of the story lines. In parallel, there are endless adjustments to the risk control rules . "This year has been the most difficult year for me since I started working at Amazon. The difficulty comes not only from the fierce market competition, declining profit margins, etc., but also from the platform's endless policy adjustments, which can often be described as unreasonable. It feels like 70% of my worries are spent on dealing with various types of policy adjustments and audits." The words of the seller Mr. Fu resonated with countless Amazon employees. Since the beginning of the year, the account review tide has been endless. At the end of February, a large number of sellers triggered the second-instance video verification, and cross-site involvement continued, and purchasing accounts became the hardest hit area; in April, Amazon suddenly launched an account verification "cold arrow", and bank account review and account re-verification were concurrent; in May, the consumer notification law was put on the agenda, and the old account identity verification tide was fierce, and at the end of the same month, address verification started again. At the beginning of the second half of the year, account review was upgraded again, and enhanced video verification swept through strongly; after Prime Day ended, supply chain video verification and related account scanning followed in early August; by September, on the eve of the big promotion, brands were removed in large numbers and related accounts were blocked one after another. "What was previously compliant suddenly became non-compliant; what was previously allowed suddenly became unacceptable." Under Amazon's "uncertainty", the first batch of sellers on the verge of being eliminated appeared. Zhang Yi, a distributor, has a deep feeling about this. In the past six months, he has experienced multiple rounds of turmoil, including enhanced audit, supply chain verification, second-instance scanning, brand abuse removal, and related account blocking. For months, he has been trapped in a vicious cycle of dead accounts, appeals, fruitless confirmation, changing accounts and moving warehouses, and dead accounts again. "For a small team of fine distributors, there has been no more difficult year than 2023." There are many sellers like Zhang Yi. They may have built a large-scale account matrix and practiced a fast-replicating volume-driven model; or they may have operated hundreds or thousands of listings and slowly eroded the market with economies of scale. What they have in common is that they all lack a solid moat, so they are the first to be drowned in the wave of account audits that are higher than the previous one. Endless rule adjustments and account risk control mean that platform rules are constantly upgraded, forcing sellers to abandon the gray ideas of the old era, and every operational footprint is based on compliance. From the account blocking wave in 2021 to the current account control upgrade, Amazon continues to instill new rules of the game in sellers. Every Amazon seller can sense that the platform is continuously brewing profound changes. Whether it is intensively redesigning the front-end page or frequently strengthening account risk control, the ultimate goal is Amazon's ultimate goal: to reshape the platform's ecological order and select sellers who are in line with the platform's development rules and are needed by the platform. Ten years ago, Amazon was a new world full of opportunities. At that time, Amazon was short of resources and had a fragile ecology, so it needed to introduce a large number of sellers to plant rich and diverse products on the barren land, absorb more "flowers, birds, insects and animals", and connect a complete ecosystem. Therefore, the Chinese sellers who first discovered this land were able to grow wildly. Faced with a market with vast incremental space and yet to be fully developed, many sellers relied on mass-copying Huaqiangbei's knockoff products to enjoy the early market dividends. At this stage, the immature Amazon's demand for sellers was still "volume rather than heart", so it just kept silent about the gray methods hidden behind countless hot products. "Eight years ago, there were still many personal ID stores on Amazon's US site. In 2014-2018, many college students started their own businesses on Amazon. Now, the entry thresholds for Amazon's various sites are getting higher and higher, and the various regulations are becoming more and more complete, and the compliance thresholds are getting higher and higher. If you only have a little capital and no relevant experience, it is almost difficult to start a business from scratch." Everything has a cycle, and so does Amazon. Through the business logic built by the flywheel model, Amazon has rapidly evolved from a barren continent to a lush rainforest. Its ecological rules have gradually developed into maturity and perfection, and correspondingly, market competition has intensified and complexity has increased under the low entry threshold. In order to maintain the long-term vitality of the platform and drive the growth flywheel to turn endlessly, Amazon has started a major reshuffle. Illegal operators are the first to be cleared, followed by mid- and downstream sellers who sell goods in large quantities, have serious product homogeneity, sell white-label products, and lack competitive barriers. As the platform is washed away by the strong, the living space of the weak will be gradually compressed until it is completely eaten away. The rigorous test imposed by Amazon's continuous rectification actions is screening batches of sellers in all aspects, and those who survive in the end will become stronger. In 2023, when cross-border e-commerce enters a new pattern of brand upgrading and refined operations, sellers holding old tickets can no longer board the ship of the new era.
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