2021 Cross-border Events: Opportunities for Amazon Sellers

Today is the first day of 2022. Looking back at the cross-border industry last year, there has been tremendous turmoil. Today we will take you to review the major cross-border events in 2021 and look forward to new opportunities in 2022.

The biggest event in early 2021 was the change of US president. Biden officially took over Trump’s mess, but Trump and his supporters once refused to admit defeat in the election, and even stormed into the US Congress and occupied the Capitol for more than ten hours.

The storming of the Capitol was a landmark event in the social unrest in the United States. Although there have been no large-scale conflicts since then, all parts of the United States are facing a steady stream of small-scale violent incidents, from marches to free shopping. On average, there has been more than one fatal shooting incident every day this year, and the intensity and frequency are far greater than in previous years.

The turbulent American society has directly led to a downward trend in the U.S. economy, and also caused the unsatisfactory results of this year's Black Friday and Cyber ​​Monday shopping sprees, which failed to meet the expectations of professional organizations. Some data even showed negative growth compared to last year.

In February of this year, a far-reaching event occurred in the Amazon circle. Amazon officially launched PSPP (Payment Service Provider Program).

The PSPP plan requires sellers to use third-party payment service providers in the plan, otherwise they will not be able to receive payment normally. This is the first time that Amazon has taken the lead in forcing requirements and rectification of peripheral services, which is of great significance. This also shows that Amazon has the ability and willingness to extend its hand to the field of third-party peripheral services. In the future, more officially certified third-party service plans will be released, bringing more uncertainty to sellers and peripheral industries.

This year is also the first year that many sellers have come into contact with commercial liability insurance. At the beginning of the year, Amazon sent a mass email requiring that if the total sales reach US$10,000 for three consecutive months, sellers need to purchase commercial insurance with a coverage of at least US$1 million within 30 days and upload the order number.

Although this requirement may have already existed on other platforms, it was the first time for sellers on Amazon to purchase commercial insurance. Furthermore, the insurance must be from a US insurance company so that Amazon can obtain a valid policy number. The premium is high, but the requirements are very low, which is quite difficult for Amazon sellers who are just starting out. To this day, the commercial insurance requirement still bothers Amazon sellers.

Starting from March and April this year, major ports in the United States have experienced the worst congestion and slowdown in history, and cargo ships waiting to enter the Port of Long Beach to unload cargo have been lined up in the open sea.

The price of ocean freight has been rising steadily. The average price of Matson Express has exceeded 35 yuan per kilogram, and the price of a whole container has been hyped up to 60,000 US dollars. It is even rumored online that a 4,000 TEU cargo ship can earn back the entire ship's price in just one trip to the United States.

This situation continued until the second half of the year. Due to power restrictions and production restrictions, fewer products could be shipped, so after a brief decline in sea freight in August and September, the good times did not last long. After the National Day holiday, sea freight prices soared again. This time, it was because of the deliberate actions of individual shipping companies. After tasting the sweetness of the soaring freight rates in the first half of the year, the mid-year decline brought a huge gap to the shipping companies. Therefore, these leading shipping companies that monopolized sea freight and docks artificially created dock congestion, deliberately piled up cabinets without processing, and deliberately did not recruit a large number of drivers and unloading personnel due to the lack of manpower, creating another wave of congestion after the National Day and causing a surge in freight rates. However, this situation was soon exposed, and the shipping companies became the target of public criticism. The state officially stepped down from the logistics industry and prepared to take action to vigorously rectify the current logistics chaos.

The final direction of logistics depends on the effectiveness of our national team's catfish, which is able to shock the whole audience.

This is definitely the most serious and final major event of the year, and its impact will even extend throughout the second half of the year.

Since the end of June, big sellers such as Zebao and Aoki have had their stores closed and their products removed from the shelves due to small card requests for reviews. Everyone originally thought that it was just Amazon's routine check of small cards, but on July 2, a large number of sellers received store closure emails, and they all refused to accept the order because of the second review.

Death Refusal means that Amazon will not give any chance for appeal. It is the highest level of punishment for fake orders. Moreover, according to the feedback we have collected, among the sellers whose stores have been closed in large numbers, many of them received emails about being caught for fake orders for the first time, and it was not the second time.

Two days later, on July 5, Amazon's new CEO Andy officially took office. At this point in time, Amazon used unprecedented tough measures to close down stores suspected of fake orders. Obviously, the purpose of this is to thoroughly rectify the platform's fake reviews. This is the new CEO Andy's pledge of allegiance, and also a warning to our third-party sellers.

And within a few days, more cases of joint closures occurred. The most serious one was Shenzhen big seller Tongtuo. Because of cross-brand authorization, more than 300 stores were closed overnight, with an average of one store being closed every 2 minutes. This time, the brand association was also to check for fake orders. Among the multiple stores authorized by the same brand, as long as one was suspected of fake orders, all stores were jointly closed. In this wave, the top big sellers suffered heavy losses. Many of them are still united to sue Amazon, demanding the release of funds in the closed stores. How their tug-of-war with Amazon will end will also give us small and medium-sized sellers a precedent for dealing with store closures.

In general, although there has not been a black swan event this year that affected the global landscape like last year's epidemic, the turmoil in the cross-border industry is no less than last year. In fact, whether it is PSPP or fake orders and store closures, Amazon's various operations have a very unified underlying logic, which is compliance.

After the outbreak of the epidemic last year brought huge growth to Amazon, this year's traffic has clearly entered a period of stagnation. Let me analyze the saying "When the sea recedes, you will know who is swimming naked". What does this mean in business analysis? The increase in the market can cover up many problems to a large extent. When the market stops growing and enters the stage of stock slaughter, every small problem in the past will be magnified.

Amazon has obviously entered the stage of killing its stock, which is why everyone has been wondering why the cross-border industry is so involuted and why there are so many philanthropists since the second half of the year. Stock means that more and more sellers have to fight in a limited market, and it is difficult for this process not to breed involuntariness and sellers who use low prices to outlast their competitors and occupy the market.

If internal competition and stock competition are the main themes of 2021, then what opportunities will we cross-border sellers have in the new year? There are also many breakthroughs, and sellers need to seize these events.

For example, the fate of the national logistics team will definitely bring about the normalization and transparency of the logistics industry. Under the game between Amazon and the country, the peripheral services of the cross-border industry will move towards this trend, which is a great benefit for cross-border sellers. In addition, Amazon is currently facing serious antitrust charges and the splitting and reorganization of major businesses. At least 40% of Amazon's market is occupied by self-operated businesses. If the mall business can be separated out, the absence of self-operated businesses will bring a vast space for sellers.