Amazon's warehouse capacity is severely reduced at the beginning of the year? Only 5 days off + make-up work, big sellers criticize the annual leave

It is learned that the latest foreign research shows that US consumer spending may further shrink in January, and retailers face greater pressure to clear inventory. At the same time, the risk of a US recession is increasing, and the weak consumer spending trend may continue in 2023.

For cross-border merchants, January is the closing stage of sales in the past year, and it is also a critical period to set the tone for the new year. However, with the macro uncertainty factors entrenched, the continued sluggish consumption in Europe and the United States has prevented 2023 from having a perfect start. At the same time, Amazon's inventory capacity has once again given sellers a "critical hit at the beginning of the year."

The Lunar New Year is approaching, and sellers are at a critical juncture of preparing for the New Year. However, just before New Year's Day, Amazon's inventory capacity was cut again, instantly disrupting the sellers' preparation rhythm.

A seller reported that his store, which opened 22 years ago, had always maintained a stock capacity of 5,000 items. However, it was suddenly reduced to only about 1,808 items recently, which directly led to the store's inability to ship goods.

It is learned that although the year-end peak season has quietly passed with the end of the Black Friday online promotion, a large number of sellers still had their inventory capacity during the New Year's Day "sanctioned":

"It was cut as well. I feel like I won't be able to restock before the New Year. I can only watch it run out of stock."

"After New Year's Day, the price has dropped from 4,000 to 3,000. What's wrong? I just placed an order of more than 1,000 to the supplier."

"The US site has shrunk from 25,000 to over 3,000, and we can't ship anything at all."

"Yesterday I was able to send out 2,000, but when I came this morning I saw that I owed more than 10,000."

Since August 2022, a large number of Amazon sellers have experienced repeated cuts in their inventory capacity. Many of them have lost tens of thousands of inventory capacities, and their shipment volume and logistics efficiency have been severely affected.

Judging from feedback from all parties, the IPI performance scores of many sellers are at a relatively high level. However, they cannot sell out as fast as they can cut prices. Not only has the inventory capacity repeatedly plummeted, but the replenishment quantity has also been restricted.

During the peak season, due to the significant increase in overall shipments, Amazon has appropriately reduced its warehouse capacity, which has become the norm for peak season sales. However, this year, due to the sluggish macroeconomic situation, Amazon's growth has slowed down, and the sequelae of over-expansion during the epidemic have become more prominent. It can only resell redundant warehouses and continue to lay off FBA employees.

It is reported that in July 2022, the number of employees in Amazon's warehouses and distribution centers was reduced by nearly 99,000. Weak consumer demand and rising operating costs slowed down its peak season recruitment. Only 21,000 employees were added in the third quarter of this year, a significant reduction from 133,000 in the same period last year.

This also caused Amazon to be seriously short of staff during the peak season. Not only could a large number of Christmas orders not be delivered immediately, but FBA inventory capacity was also repeatedly cut, and there was no recovery even after the peak season ended.

Now that the Spring Festival is approaching, sellers are exhausted from shipping goods, and the current conditions of big sellers also vary.

Recently, Anker released an announcement on the progress of real estate purchase. The announcement shows that Anker reviewed and approved the "Proposal on the Proposed Purchase of Real Estate" on October 15, 2021, and plans to spend 1.65 billion yuan of its own funds and raised funds to purchase real estate in Shenzhen for the company's office and the construction of the "Shenzhen Product Technology R&D Center Upgrade Project", a fundraising project.

On December 23, 2022, Anker and Shenzhen Runxue officially signed the "Shenzhen Real Estate Sales Contract (Pre-sale)", and its subsidiary purchased a property with a total area of ​​51,017.18 square meters located in Bao'an District, Shenzhen. The total transaction price was approximately RMB 1.542 billion.

▲ The picture comes from Anker Innovations announcement

The reason why Anker spent 1.5 billion to buy a house in Shenzhen is mainly because its current R&D and office space in Shenzhen are all leased, and there are risks such as the leased space being reclaimed or unable to be renewed upon expiration, and the rental costs continuing to increase. Therefore, purchasing its own property can provide independent and more stable R&D and office space, which is conducive to ensuring long-term operation and business stability.

On the other hand, Anker, adhering to the strategy of attaching importance to R&D and deepening its technology, has always attached great importance to the construction of a talent team. As of now, the total number of Anker Shenzhen employees is about 2,300, with an average annual compound growth rate of about 37.59%, and it is expected to reach about 4,800 in 2027. For this reason, more and more concentrated business premises are needed to improve the office environment and improve management efficiency.

Compared with Anker, which spent 500 million yuan on buying houses before the New Year and is thriving in talent training, another big seller has lost the support of its employees due to the annual leave issue.

According to its employees, the store's Spring Festival holiday schedule is from January 21 to January 25, a total of 5 days, and they have to make up for the weekends after the New Year, so the annual leave is very limited.

▲ The picture comes from Zhiwubuyan

"I still remember working in this company three years ago. I was confused when I saw the holiday notice at that time. I didn't expect that its holiday arrangements would be exactly the same three years later." said a former employee.

Another seller said: "I worked for this company when I first entered the industry a few years ago. The base salary was 3,200 plus commission of 4,500, with odd and even days off. I left immediately after 5 months of experience. Many colleagues who came earlier than me are still sticking with it, and their base salary is even lower than mine."

It is learned that the work system of the big seller has been criticized before. In September last year, it announced a new system of one day off per week and shortened the National Day holiday from 7 days to 4 days.

Earlier, the retailer also issued an announcement stating that it would postpone the payment of performance bonuses and suspend the payment of welfare benefits (including meal allowances, attendance bonuses, etc.) to some employees, and there were even rumors of layoffs.

As a former industry leader in distribution and sales, the company also experienced the peak glory of Amazon. However, the industry is undergoing a torrent of changes, and the era of barbaric growth with extensive operations is over. It is inevitable that it will enter a painful period of transformation, and internal management will also breed many contradictions.

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