It is understood that according to foreign media reports, the current global consumer industry seems to be in a trough due to the impact of multiple factors such as the new crown epidemic and inflation.
According to the survey data of the British Retail Association, the value of goods sold in the UK increased by 3% year-on-year in August. Due to rising supply chain costs, employee pressure and shortage of raw materials, many businesses were forced to raise prices to cope with supply difficulties. The Bank of England also predicts that inflation will peak at 4% this year, further adding pressure on consumer household spending. In the United States, consumer sentiment research in August showed that the final value of the U.S. consumer purchasing sentiment index was 70.3, a decrease of 13.4% from July, falling to the lowest level since 2001. The continued weakness of the consumer market has also had a certain impact on the online retail industry. Although the peak season is approaching, the performance of many sellers has shown large fluctuations. In the case of unoptimistic sales, the rising operating costs have further reduced the already tight profit margins of sellers. Cross-border navigation , growth is rising but profits are falling! Should sellers raise prices to cope with this? #Amazon##跨跨头条#跨跨商视频号▲ Video account attention: cross-border navigation
Profits have shrunk significantly, and sellers are besieged by three difficulties At the beginning of September, the bad news of the sharp drop in storage capacity caught many sellers off guard. In order to cope with the delivery problem, many sellers had no choice but to sell at low prices to clear their inventory, increase sales rate and expand capacity.
However, the method of clearing inventory at a low price is tantamount to hurting the enemy by a thousand and hurting oneself by eight hundred. In the current environment of rising costs, facing the gradual erosion of profits, sellers are also caught in a dilemma of whether to raise prices. In this regard, some sellers summarized the three dilemmas that Amazon employees have experienced recently: 1. A large number of novice sellers poured in, and the low-price spiral strategy accelerated the internal circulation. 2. In the context of account blocking and secondary blocking of brand links, a large number of sellers choose white hat operations and use advertising for promotion, and advertising bidding has skyrocketed. 3. Under the condition of limiting the inventory quantity, big sellers and small sellers can only clear the inventory at a low price. ▲ The picture comes from Zhiwubuyan The summary is so accurate that it is obvious that a lot of money has been lost. In addition, some sellers said that the skyrocketing first-leg freight costs and the extremely unstable logistics timeliness should make them the top three. Some sellers even made fun of themselves: "I don't know if it's profitable or not, but yesterday I overheard that my boss bought another BBA." "Everything has gone up except profits. Just hold on and you'll get used to the losses." "It's OK, I can still handle it, come on, hard-working worker!" "It feels like everyone except the sellers is making money. I won't say any more. I'll go to Meituan later." Sellers call for reasonable pricing, is the price war dilemma difficult to resolve? Logistics costs, advertising service fees, and material costs are like three mountains that are overwhelming sellers. For this reason, some sellers have called for: rejecting involution, setting reasonable prices, and giving everyone a profit margin.
According to a seller, when he first entered the industry four years ago, the shipping fee was only 9 yuan/kg, and the price of a product in his store was about 13 yuan. However, nowadays, the shipping fee has risen to 23 yuan/kg. Although the link is still on sale, driven by the general environment, competitors are basically priced below 10 US dollars. To make matters worse, the raw material costs of the manufacturers that have cooperated for many years have also been rising. ▲ The picture comes from Zhiwubuyan For most small and medium-sized sellers who operate in compliance with regulations, they just want to operate peacefully and get a share of the pie on the platform. However, the increasingly serious phenomenon of internal competition forces them to follow the price cuts, thus falling into a vicious cycle where they will not get orders if they do not cut prices, and will not make profits if they cut prices. One seller admitted that the initial price of a product he was selling was $39.99, and he put a lot of effort into the pictures, copywriting, A+, and reviews to carefully create a high-quality listing. However, gradually, a large number of low-priced copycats of the same product appeared on the market, directly plagiarizing the copywriting and pictures, which also caused the seller's product sales to be affected to a certain extent. On the one hand, price wars have led to a large erosion of profit margins. On the other hand, many sellers have blindly lowered prices and ignored the quality of the products themselves, resulting in a flood of cheap and inferior products on the market, destroying the healthy competitive environment. Since the beginning of this year, the surge in the number of sellers has caused an imbalance in the supply and demand relationship, exacerbating the trend of internal circulation. At the same time, the platform's warehouse and storage capacity restrictions, frequent account bans, and service fee collection have also squeezed the sellers' living space in multiple ways. Therefore, some sellers have proposed: 1. Establish a reasonable and legal labor union to directly communicate with Amazon. 2. Break the wild growth, set rules for sellers, and manage the reasonable range of price fluctuations. 3. Have reasonable knowledge of Amazon’s policies and future plans. 4. There are certain requirements for industry entry. ▲ The picture comes from Zhiwubuyan However, some sellers said that advocating collective price increases is just empty talk. Price fluctuations are constrained by market capacity and direction. Driven by the current market environment where supply exceeds demand, price cuts are a last resort under the general trend. A seller said frankly that the method of stimulating sales with low prices has always existed, both at home and abroad. Low prices can be said to be a catalyst for the market, forcing product upgrades and differentiation, and forcing operations to differentiate product strategies on product pages. Low-price competition is a disaster for industry practitioners, but it is a blessing for the market and consumers. Sellers have no way to change low-price competition because they cannot control others from lowering their prices. Even if the situation is changed temporarily, a new batch of sellers A, B, and C will come in tomorrow to start a price war. Seeing that profits are gradually being squeezed to the breaking point, sellers are anxious about how to break the deadlock, and whether to raise prices or not is also a big problem. What do you think about this? Feel free to leave a message in the comment area to share~
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