With the door to investment opening in the second half of the year, is the sudden drop in storage capacity due to Amazon’s “ulterior motives”?

It is learned that the Ministry of Commerce held a press conference yesterday. At the meeting, the spokesperson said that as an important overseas node for cross-border e-commerce, the number of overseas warehouses in China has exceeded 1,900, with a total area of ​​more than 13.5 million square meters, and the business scope radiates the world. Among them, the number of overseas warehouses in North America, Europe, Asia and other regions accounts for nearly 90%.

▲ The picture comes from the Internet

The peak season is approaching, but the container shipping market, which is on the verge of collapse, has become an indelible knot in the hearts of many sellers since this year. At this conference, the Ministry of Commerce also clearly stated that it will help enterprises accelerate the development of new foreign trade formats and models and promote the development of overseas warehouse networks, which may improve the logistics dilemma currently faced by sellers.

Previously, Li Xingqian, director of the Ministry of Commerce, also admitted that the various risks and challenges encountered by cross-border e-commerce companies in the process of going overseas are a temporary "inability to adapt to the local environment". Faced with such growing pains, some sellers left the market sadly, while others held their ground. Now, the gears of cross-border business are turning, and Amazon's door to investment is open again. I wonder if it can still be as hot as before.

▲ Video account attention: cross-border navigation

It is learned that Amazon has been making big moves recently, and its business expansion is progressing in an orderly manner. Recently, Amazon announced the official launch of Amazon Egypt, changing Souq.com to Amazon.eg, adding a new module to its business territory.

At the same time, its investment plan has also been put on the agenda. Recently, a seller broke the news in the seller communication group that the registration for investment in the second half of 2021 will open in mid-September, and the system will officially start sending links on October 1. Sellers who need to register an account can hurry up and prepare now.

▲ The picture comes from the seller communication group

During the peak investment season in the first half of the year, a large amount of fresh blood once again poured into Amazon. This "cross-border fever" does not seem to have any signs of cooling down. It has even attracted a large number of Pinduoduo and Taobao sellers to enter the market, becoming one of the incentives for the price war.

Previous data from Finbold analysis showed that an average of 155 sellers join Amazon every hour. At this growth rate, it is estimated that approximately 1.4 million new sellers may join the Amazon market by the end of this year.

So now that the investment channel is open again, will the number of sellers reach a new peak as shown by the data evaluation? Will the sellers who are stuck in the dilemma of account suspension and other difficulties be able to see the light at the end of the tunnel?

In the first half of the year, the chaotic freight market and the abnormal price war, coupled with the strict control of the platform's golden rules, left many sellers helpless in the face of the exponential increase in operating costs and the repeated squeeze of profits. Under this situation, some sellers gritted their teeth and persisted, some sellers decisively left the market, and some sellers were trapped in the siege and had no way out.

Previously, there was a wave of selling accounts in the industry. Many sellers sold their accounts and changed careers, thinking of new ways out. The price of accounts once plunged. The big sellers at the forefront of the storm also accelerated the layout of independent stations and transformed into a multi-channel operation model.

  ▲ The picture comes from the seller communication group

Cross-border e-commerce has become a hot track in the past two years, which is inseparable from the boost of the epidemic and the transformation of buyers' consumption patterns. However, as time goes by, 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.

This was also confirmed by Amazon’s second-quarter financial report. Revenue continued to grow, but the benefits of the “home economy” were no longer as great as before, and the growth momentum had clearly declined.

Can cross-border e-commerce still be done? This is also a common question and worry for many sellers. It is true that Amazon has occupied a dominant position for many years, and its huge traffic and massive business opportunities are unmatched by many platforms. However, it also comes with strict regulatory policies and the risks of over-reliance on third-party platforms.

No one dares to make a conclusion whether cross-border e-commerce can still be successful. But sellers need to calm down and assess the situation instead of rushing into the market blindly.

The investment channel is about to open, but for current sellers, the fluctuating inventory capacity is still a rather troublesome problem.

In recent days, Amazon has drastically cut sellers’ inventory capacity, causing many sellers to lose thousands or tens of thousands of units of inventory. As the peak season is approaching, this drastic cut has disrupted sellers’ delivery plans, and they are racking their brains to break through inventory restrictions.

Some sellers even lie down and make fun of themselves, and come up with a series of bizarre ideas: using missile delivery to send the goods into space, and then "floating" to the port based on a jumping trajectory, where they can be recycled and reused.

  ▲ The picture comes from the seller communication group

Due to the sudden drop in inventory capacity, many sellers have to clear their inventory at low prices to increase sales and discard redundant inventory. However, the price volatility will never end, which also brings the risk of provoking a price war in disguise.

Some sellers also stated that they have opened Amazon's official AGL satellite warehouse and applied for quotas from AGL managers.

It is reported that the characteristics of the satellite warehouse mainly include:

1. There is no inventory limit for shipments entering the satellite warehouse or replenishing from the satellite warehouse to the FBA warehouse

2. Goods can be shipped from satellite warehouses to FBA warehouses in bulk + free + automatic replenishment , and there is no excess storage fee for ASINs with automatic replenishment

3. Storage fee is halved

4. AGL sellers need to apply for whitelisting through their account manager , and non-AGL managers need to join AGL to use the program.

  ▲ The picture comes from the Internet

At first glance, this project seems to bring a lot of benefits, but some sellers pointed out sharply that such frequent inventory capacity reduction is most likely a means for Amazon to guide sellers to use official AGL satellite warehouses.

According to feedback from some sellers, the amount applied for through AGL is not much, the time is very short, and it will soon decrease. It is not a long-term solution to solving logistics and delivery problems.

A series of antitrust bills drafted by the US Congress some time ago put Amazon under pressure from many parties, forcing it to seek help from sellers. Therefore, some sellers bluntly said that this might be a way for Amazon to transform into a comprehensive service provider in advance in case its business is split by the US government in the future.

There are many different opinions on Amazon's continued tightening of its storage capacity policy. Sellers are also using various methods to break through the shipping restrictions. However, it is important to remember not to risk Amazon's favor by doing so, so as to avoid being held accountable later.

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