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▶ Video account attention cross-border navigation The wheel of time turns silently, and 2021 has entered the countdown. Amazon sellers are about to usher in the New Year's Day. Some sellers said that this terrible 2021 is finally over, but some sellers regretted not being able to achieve the flag in 2021. Some sellers even created a 2021 Amazon work report and circulated it widely in the cross-border seller circle: ▲ The picture comes from the seller communication group This short chapter summarizes the ups and downs of a year for Amazon sellers. Looking back at 2021, the cross-border e-commerce industry has been full of turmoil and innovation, and sellers are all groping forward in the changing times. Now that 2021 is coming to an end, some sellers are asking themselves: How many days are left in the new year? Have you cleared out your inventory? Have you saved your money? Have you received your year-end bonus? Did you make money from Amazon in 2021? It has been noticed that recently, in the seller communication group, many sellers have been discussing this year’s performance and profit inventory. I randomly interviewed several sellers, but the answers I got were not very ideal. Compared with the myth that cross-border sellers made a lot of money in 2020, Amazon has fallen from the altar of wealth in 2021. One seller said that the situation of the company's European site was generally stable this year, but the performance of the stores in the US site plummeted and did not improve. Among dozens of stores, only a few were able to maintain profitability, and several main accounts were blocked one after another, with losses reaching hundreds of thousands of dollars. The situation of another seller is not optimistic either. More than a dozen accounts have been frozen this year, and the frozen funds amount to millions of US dollars. However, the seller said that ups and downs are normal in the Amazon business, and he is still actively appealing to recover the funds in his account. A seller in East China told me that although the company's overall situation is okay this year, as an Amazon executive, the salary received has not shrunk. But compared with 2020, it also showed a clear downward trend, specifically reflected in the sharp drop in sales and profit margins. In addition, several sellers said that the turnover rate of the company's team has remained high this year, and the loss of operational staff is also an important factor causing unstable store performance. Cross-border e-commerce is changing rapidly. In just one year, the situation of sellers has changed drastically. The goal of many sellers has changed from getting rich to not losing money. Some sellers even asked for help on the forum: I have lost millions on Amazon, should I continue to sell my house to Amazon? As we all know, Amazon is an asset-heavy industry. Its high profits are accompanied by high risks of the platform. In 2021, the following factors will affect whether sellers can make money on Amazon: 1. Sellers of all sizes are struggling to survive amid the wave of account bans Official data from Amazon shows that a total of approximately 3,000 Chinese seller accounts have been banned by Amazon this year. Among the banned accounts are several well-known Shenzhen sellers, such as the "Four Young Masters of South China City" and several of the "Five Tigers of Bantian". The deterrent effect of account blocking cannot be underestimated. It is understood that since the big-selling brands were blocked, their company performance has shown a downward trend, and even big-selling brands have suffered losses, and there have been news of layoffs and reorganizations several times. Amazon's crackdown not only caught big sellers off guard, but was also a fatal blow to small sellers who did not have sufficient cash flow. They had no choice but to start over or leave the market with regret. 2. A large number of new sellers have entered the market, setting off a cross-border involution trend According to Finbold data, Amazon added 3,700 new sellers every day in 2021 and is expected to attract 1.4 million new sellers by the end of the year. In addition, official Amazon data shows that more than 200,000 sellers have joined Amazon US this year. So where do these sellers come from? It is understood that among the new sellers this year, there are many people who switched from domestic e-commerce, such as Taobao and Pinyin sellers. However, these novice sellers have not yet studied Amazon's rules clearly. Once they entered the industry, they abused low-price strategies, triggered industry price wars, and forced a large number of their peers to compete internally . This is the root of the problem. 3. Various costs continue to rise, and profit margins are repeatedly compressed In 2021, shipping costs and containers have become hot topics several times due to their high prices. Amazon FBA delivery fees have been raised several times. The ex-factory prices of products have been raised under the power restriction policy. All costs have risen in all aspects, but the sellers' selling prices have not increased. Under this circumstance, the sellers' already meager profits have been further squeezed. According to JS Seller Report, 50% of Amazon sellers have monthly sales of more than $5,000, and 25% have monthly sales of more than $25,000. In addition, only 6% of Amazon sellers have become millionaires. Faced with the declining store performance and profits, some sellers made Lin Daiyu-style complaints: I must be sick. I couldn't sleep anyway. I sat up and pressed F5 for a while. This sadness came for no reason. I stared sadly at the two stores on the monitor. One had no orders, and the other had no orders either. ▲ The picture comes from the seller communication group Even though 2021 was difficult, most sellers still persevered and placed their hopes on 2022. So what will cross-border e-commerce look like next year? What are the new trends for Amazon in 2022? By observing and summarizing the current status of the industry, we predict that there will be the following new trends in cross-border e-commerce in the future: 1. Cross-border e-commerce will enter a new era of multi-platform According to the JS Seller Report, in 2021, one-third of Amazon sellers plan to expand their business to other online marketplaces. ▲ The picture comes from JS Under the impact of Amazon’s account suspension wave this year, many sellers have felt the risk of being too dependent on a single platform, so independent sites have emerged as a popular choice for sellers. This year's biggest e-commerce Black Friday is undoubtedly Shopify. According to Similarweb data, Shopify's average monthly independent visitors in the second quarter of this year exceeded Amazon for the first time. In addition, other emerging e-commerce platforms are also constantly impacting Amazon's e-commerce dominance, such as ByteDance's launch of the independent e-commerce app Fanno, Alibaba's launch of the cross-border platform allyLikes, and Kuaishou's testing of overseas live e-commerce to enter the Latin American market. With the rise of more and more e-commerce leaders, cross-border e-commerce will gradually enter a new era in the future, where traffic transfer and the flourishing of multiple platforms may become the norm. 2. Social media will become a treasure trove of traffic According to the Salesforce Shopping Index, social media platforms are becoming an increasingly important source of traffic for online sellers. In the second quarter of 2021, almost one in ten (8.9%) e-commerce website visits came from social media platforms, and this share has been steadily rising over the past two years, up from 6.6% in the third quarter of 2019. According to a survey, consumers are increasingly interested in using social media to get inspiration for online shopping. Data shows that 55% of online shoppers have purchased products directly from social posts published by brands. Social commerce has become increasingly important in the past two years, with many platforms such as Facebook, Instagram, Pinterest, Snapchat, TikTok and YouTube rushing to join the game. 3. Cross-border e-commerce will enter the era of brand expansion overseas Nowadays, with the rise of overseas social media and the increasing popularity of the DTC model, more and more brands are gradually gaining a place on the world stage. Cross-border e-commerce has gradually moved from the era of "product is king" to the era of "brand going global". From selling products to increasing brand added value, it can be said that the fame of Chinese manufacturing overseas is inseparable from the continuous creation and export of Chinese brands by cross-border sellers. In the future, cross-border sellers will no longer rely solely on product prices to gain competitive advantages. Brand value will become the link between Chinese manufacturing and overseas consumers. With the global layout of new and old consumer brands, a wave of brand going overseas is emerging.
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