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▲ Video account attention: cross-border navigation In the blink of an eye, time has reached the last month of Q3, and the arrival of September also means that the peak season in the second half of the year is approaching. Open the Douyin homepage and you can still see the familiar Amazon background and eye-catching slogans in the popular videos pushed by the system: "After working at Amazon for half a year, I bought two houses in Shenzhen." "Is there any industry more profitable than Amazon? A product that costs 10 yuan is sold for 30 US dollars in the United States." ▲ The picture comes from TikTok Similar videos and stories have attracted many outsiders to watch, but back to reality, is it really that easy to make money on Amazon? It’s 2021 now. Is Amazon still the platform that was once pushed to the altar of wealth? Shenzhen second-hand housing market cools down Sellers grab houses or "pick up bottles" This year, a joke became popular in the cross-border e-commerce circle: Last year’s Membership Day news broke: All the houses in Shenzhen Bay One were bought by Amazon!
News broke on this year’s Membership Day: All the bottles at Shenzhen Bay One were picked up by people working for Amazon! ▲ The picture comes from the seller communication group From house to bottle, only one word difference, the seller's situation is completely different. Although this is just an exaggeration, it is very appropriate to describe the changes of Amazon sellers between last year and this year. Looking back at last year, as the epidemic raged across the world, the real economy suffered severe damage, but online e-commerce took advantage of the favorable conditions and soared. At the same time, many domestic sellers made a fortune thanks to Amazon's platform dividends, which led to the above rumors. After a year, what happened to those sellers who once bought houses in Shenzhen Bay? According to relevant reports, as of July, Shenzhen's second-hand housing prices have fallen for three consecutive days , with an average price of 66,900 yuan per square meter. At the same time, news broke in the Shenzhen real estate agency circle: the house price was reduced by 30 million yuan, but it couldn't be sold. ▲ The picture comes from Fangtianxia News continued to come in that "Shenzhen's second-hand housing transaction volume hit a ten-year low" and "Shenzhen's second-hand housing prices fell for three consecutive times." ▲ The picture comes from Weibo What does this have to do with Amazon sellers? Starting from May this year, Amazon launched a wave of account blocking that swept across most of the cross-border circle, and tens of thousands of sellers were caught in the center of the storm. To date, the blocked brands and related accounts have not been restored, and the sellers’ huge funds have been frozen and their inventories have been piled up. Therefore, people in the industry have been constantly revealing that sellers whose accounts have been blocked have no choice but to fight for survival by selling houses, canceling leases, laying off employees, clearing out inventory, and other means to reduce losses and maintain business operations. It is learned that the average price of a 500-square-meter house in Shenzhen Bay No. 1 was about 140 million yuan last year, and the price has been reduced several times this year, but no one is interested. As for the reason for the decline in housing prices, an agent said it was because many owners were listing their houses for auction. It is understood that many owners of Shenzhen Bay are people in the cross-border circle. Are there any sellers who listed their houses for sale because of the account blocking incident? We dare not deny it, but we dare not confirm it. As time goes by, Shenzhen Bay One, which was once very popular among sellers, is now in a completely different state, which makes people feel deeply moved. All of this is inextricably linked to a prominent figure in the cross-border circle, that is, "Zhang Sanfeng" (sealing accounts, brands, and funds). A wave of account bans sweeps the cross-border circle Layoffs and exits become a big seller May 2021 is the darkest moment for sellers. The wave of Amazon account bans has set off a bloody storm in the cross-border circle since the beginning. There have been many follow-up reports on Amazon’s account suspension incidents. Although the situation of each seller is different, they all face the same problem, which is heavy losses. On April 30, it was revealed that the main account of the best-selling Paton was heavily fined by Amazon for false orders, the Mpow brand registration was cancelled, and all funds were frozen.
On May 9, a large number of product links in Ao*’s Amazon store were disabled and the account was blocked.
On June 16, Xinghui Holdings Co., Ltd. issued an announcement stating that some stores involving the three brands RAVPower, Taotronics, and VAVA under its subsidiary Zebao had their sales suspended by Amazon.
On July 6, Tianze Information issued an announcement that its subsidiary Youkeshu had approximately 340 new sites blocked or frozen in 2021, with approximately 130 million yuan in funds suspected of being frozen.
On August 5, Huading Holdings announced that multiple brands of its subsidiary Tongtuo Technology were suspended from sale by Amazon and funds were frozen. A total of 54 stores were banned and closed, and funds of 41.43 million yuan were suspected of being frozen.
According to the South China Morning Post, more than 50,000 Chinese sellers have been banned by Amazon , with losses exceeding 100 billion yuan , mainly due to illegal manipulation of false reviews. ▲ Picture from South China Morning Post The massive account blocking incident has caused a butterfly effect, with more and more groups being drawn into it, and the survival of companies and the fate of their employees are closely intertwined. Some big sellers are facing difficulties such as frozen funds, interrupted revenue, and inventory backlogs; some big sellers are selling at a loss and clearing out inventory at low prices; some big sellers are cutting off their arms to survive and making large-scale layoffs in order to increase revenue and reduce expenditure. ▲ The picture comes from Zhiwubuyan It was revealed that the blocked seller Ao* had to clear out his inventory and sell his products at low prices because his account was blocked, resulting in heavy losses. In August, Paton announced that it would implement a six-month layoff arrangement for employees in R&D and technical positions until February 6, 2022. ▲ The picture comes from the seller communication group Big sellers are already overwhelmed, and small sellers who have been blocked are also struggling to survive. Scenes of being on the verge of bankruptcy, layoffs and restructuring, and suspension of pay are frequently seen in the cross-border circle. Some sellers directly announced that the company was forced to disband due to cash flow, and employees faced unemployment; some sellers were reported to have canceled the lease of a 4,000-square-meter office in Sakata, and the company's operating conditions were worrying. ▲ The picture comes from the seller communication group For big sellers, they have the strength to make a comeback, but for ordinary sellers, a dignified exit is also an option. How much damage does account suspension have on billion-dollar sellers? You can tell from the financial reports they release. Big sellers' financial reports are out one after another Performance generally declined severely In August, the first half results of cross-border listed companies and their subsidiaries were released. After experiencing the shocks in the past six months, the performance of the big sellers is obviously not as good as before. According to the 2021 first half financial reports released by major sellers, the following table is compiled for reference:
| Operating income (100 million yuan) | | Net profit (ten thousand yuan) | | | | | | | | | | | | | | | | | | | | |
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From the above table, we can see that except for Anker Innovations and Leckey Holdings, which still maintained stable and strong growth, the performance of several cross-border sellers has declined to varying degrees. Big sellers financial report at a glance In the first half of 2021, Paton achieved operating income of 1.717 billion yuan , accounting for 30.68% of Cross-border's operating income. The account suspension incident also affected the sale of Paton. Although the sale amount was 2.02 billion yuan, only 1.392 billion yuan has been received so far. In the first half of 2021, Global Easy Shopping achieved operating income of 250 million yuan , a year-on-year decrease of 93.70%; net profit was -138.449 million yuan, a year-on-year decrease of 242.97%. In the first half of 2021, Zebao achieved operating income of 1.925 billion yuan , a year-on-year increase of 8.4%. According to the financial report, Zebao's net profit in the first half of the year was nearly 115 million yuan, a decrease of about 30 million yuan compared with 148 million yuan in the same period last year . According to Tianze Information's financial report, affected by changes in the policy environment of the Amazon platform and a sharp decline in independent site business, Youkeshu's operating income in the first half of the year was 1.092 billion , a year-on-year decrease of 51.12%, and its net profit plummeted by 742 million.
In Huading Group's first-half report, Tongtuo Technology's net profit was 76.8004 million yuan , which was also worse than before. Judging from the performance reports of some major cross-border sellers that showed a cliff-like decline, the major changes in the industry and the platform's regulatory policies in the first half of the year had a huge impact on sellers' business revenue. Some cross-border sales that once enjoyed great success are now in tatters. Against the backdrop of such major changes in the platform landscape this year, many voices have emerged in the industry that are pessimistic about Amazon, and Amazon seems to have fallen from the altar of getting rich quickly. With the iron fist of platform policies on one side and the continuous decline in performance on the other, can sellers still create a myth of getting rich on Amazon? Amazon's fall from riches What problems do Amazon sellers face? Looking back at this year's cross-border industry, from the global epidemic at the beginning of the year to the platform cleansing in the middle of the year, the peak season is now approaching, but sellers still have to face multiple challenges. Why is it becoming increasingly difficult to do business on Amazon? Here are some of the main factors that have affected cross-border sellers this year: 1. The epidemic situation fluctuates The repeated changes in the epidemic are both opportunities and challenges for sellers. The worsening of the epidemic has stimulated online shopping on the one hand, but it has also impacted logistics and buyers' consumption levels on the other. Whether it is the cooling of the "stay-at-home economy" due to the resumption of work and production, or the decline in consumer desire due to limited economic levels, the momentum of cross-border e-commerce has slowed down, and sellers have to face more unknown difficulties. This year, the onshore RMB exchange rate against the US dollar hit a nearly three-year high. The RMB exchange rate against the US dollar has been rising all the way , and the US dollar exchange rate has fallen below 6.3 several times, making a number of sellers miserable. With costs rising, sellers have to face considerable exchange losses every time they withdraw cash. Inversely proportional to the gradual decline in the US dollar exchange rate is the exponential growth in freight rates. It is learned that the shipping market is still hot this year, the volume of cargo continues to grow, and the shipping costs of containers from China to the United States continue to rise . There are even news reports that container freight rates have soared to US$100,000 a day. The performance of some shipping companies in the first half of the year shows how hot the shipping market and transportation business are this year. ▲ The picture comes from the seller communication group In the words of sellers, all costs have increased, but profits have decreased. 4. Amazon tightens its policies From the insurance policy at the beginning of the year, to the storage capacity restrictions in the middle of the year, to Amazon's reaffirmation of the review policy in May, it is obvious that Amazon's platform policies are gradually tightening, showing a trend towards comprehensive compliance. If sellers are not careful, they will fall into the platform's iron net. Under Amazon's crackdown, operational methods such as fake reviews, black technology, and internal complaints have been upgraded to dangerous operations, and sellers have to rely on white hat methods to operate. Everyone in the cross-border circle is aware of how powerful Amazon's account blocking wave is this year. At the same time, Wang Xin of Shenzhen Cross-border e-commerce Association said: "The Amazon store closure incident has once again warned the industry that the awareness and ability of risk sharing should be further enhanced, and Chinese sellers should accelerate the road to comprehensive website construction. " 6. Serious internal competition among peers Previous data showed that an average of 155 sellers join Amazon every hour, and by the end of this year, approximately 1.4 million new sellers may join the Amazon market. The sharp increase in the number of sellers has intensified the homogeneous competition among sellers. Coupled with the outbreak of platform price wars and "open and secret fighting" among peers, domestic cross-border sellers have become seriously involuted. Looking back on the memories, Amazon sellers have experienced a lot this year, including shipping restrictions, platform rectification, account blocking, exchange rate depreciation, and freight increases. Each and every one of these will leave a heavy mark in this cross-border era. But in the long run, although the cross-border e-commerce track is becoming saturated, there are still unlimited business opportunities. Amazon's platform dividends will continue for some time. Both new and old sellers have the opportunity to get a piece of the pie on this platform. In an environment where the platform advocates compliance operations, sellers are facing not only fierce internal competition, but also a fairer and cleaner business environment. In short, Amazon is a platform where risks and opportunities coexist. Every industry requires long-term accumulation and hard work. There is no dream of getting rich overnight. There is only day-to-day perseverance and invisible efforts. The peak season in the second half of the year is approaching. I hope sellers can put aside their anxiety, concentrate on operations, and usher in a surge in orders during the peak season.
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