When the US dollar exchange rate falls to 6.5, is there still room for profit for sellers?

This morning, a piece of news about #Renminbi exchange rate against the US dollar has risen to 6.5# once again topped the Weibo hot search list, bringing all Amazon workers back to reality from their dreams.

It is learned that the People's Bank of China authorized the China Foreign Exchange Trading Center to announce that the RMB exchange rate midpoint in the interbank foreign exchange market on November 17, 2020 was: 1 US dollar to 6.5762 yuan, up 286 basis points from the previous trading day, rising to the 6.5 yuan era. In addition, both onshore and offshore RMB exchange rates against the US dollar rose to the 6.5 yuan era.

▲ The picture comes from Weibo

In the comment section of this news, many foreign trade people complained: There is no performance, the exchange rate keeps falling, and life is so difficult for foreign trade people.

It is understood that due to China's proper epidemic prevention and control, it was the first to achieve recovery in the global economy, and the weakening of the US dollar index itself, the RMB exchange rate has been fluctuating continuously. Since the end of May this year, the RMB exchange rate has been rising strongly. So far, the RMB exchange rate against the US dollar has appreciated by nearly 8% from the low point at the end of May.

At the end of May this year, the US dollar exchange rate reached 7.17, but now it has fallen to 6.5. Every time the seller exchanges 100,000 US dollars, it will cause tens of thousands of yuan in exchange losses. At this time, foreign trade people and Amazon people are already in tears.

Some netizens said: They said they would wait a little longer on July 1, and they said they would wait a little longer on June 9, and they were still hoping for June 7, so are they still waiting now?

▲ The picture comes from Weibo

But more foreign trade people are not calm in the face of the surge in the onshore RMB exchange rate.

“I don’t dare to convert foreign currency into RMB. As a result, the exchange rate is getting lower and lower. Foreign trade is too difficult.”

"The salary was already low... Now the exchange rate is 6.5, I feel like there is no way to make a living."

"When I exchanged currency in March, it was 6.9. Now I am losing a lot of money."

▲ The picture comes from Weibo

For foreign traders and cross-border sellers, their business is generally calculated in US dollars and settled in RMB . The decline in the US dollar exchange rate means a decrease in order profits. Even if sales are good, it is difficult to make up for the loss of exchange. However, the current trend of RMB appreciation is obvious, which is unfavorable for the export and foreign trade industry.

On the one hand, the order volume is depressed due to the epidemic, and on the other hand, the exchange rate continues to rise. How can sellers survive this cold winter?

The depreciation of the US dollar exchange rate has caused sellers to suffer a lot of losses, and Amazon’s recent peak season storage fees are also a cause of concern for sellers. The high fees have directly increased the sellers’ operating costs. Sellers are asking: Is there any profit at all if this continues?

Recently, a seller reported on the forum that the storage fee in the United States was only $200 in September and October, but it was deducted about $800 in November? The storage fee increased by 4 times?

▲ The picture comes from Zhiwubuyan

Similarly, in the seller communication group, there are sellers who ask for help: the products really can’t be sold, and they are charged very high storage fees. What should they do at this time?

▲ The picture comes from the seller communication group

After the topic was raised, many sellers also said that they encountered the same problem, and all of them were when the value of the goods was not high. At this time, whether the sellers chose to destroy the goods or continue to sell them, they would face a considerable fee, and the operating costs would undoubtedly increase.

"Because I forgot to withdraw my position in time, I was charged high excess fees twice in a row."

"Storage fees suddenly increased from October to December, and we can only rely on small profits and quick turnover to survive this cold winter."

▲ The picture comes from the seller communication group

Many sellers are confused by the sudden surge in storage fees. In fact, Amazon has already clearly stipulated the charging standards for this fee. Sellers can go to the backend to check the specific Amazon storage rules themselves.

According to Amazon's warehousing rules, the storage fees vary according to the size of the product and the time of year. From January to September, the charging standard is "US$0.75 per cubic foot for standard size and US$0.48 per cubic foot for large size ; from October to December, the charging standard is US$2.4 per cubic foot and US$1.2 per cubic foot for large size.

This also explains why the storage fees for sellers have surged recently. According to this charging standard, we can see that in the peak season months, that is, October-December, Amazon's storage fees are about 2.5-3 times that of January-September, so many sellers have seen an increase in storage fees this month.

Therefore, sellers must be flexible at this time. If they do not want to be charged high storage fees, they must analyze the market demand for the product and quickly break even and clear inventory through methods such as low-price promotions on the site, high-profile advertising, transferring inventory, and offering discounts.

The Black Friday online promotion is coming soon, but sellers are facing a series of problems such as the falling US dollar exchange rate and high storage fees. As operating costs continue to rise, sellers' profit margins are also shrinking. "This peak season is not very busy" is the feeling of most sellers. What are your opinions or good suggestions on this? Please leave a message in the comment area~

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