Raising prices for the country! Amazon sellers save themselves from internal competition

Raising prices for the country! Amazon sellers save themselves from internal competition

This year is magical

We have experienced Biden coming to power and preparing to resume the trade war

The US dollar also fell below 6.4, ushering in a historic correction

We even sent away wave after wave of top sellers in the category.

Under the influence of many factors, the operating environment of Amazon sellers is ushering in a very critical and difficult node. Now everyone should be able to feel that the competition for various purposes is extremely fierce, and "cross-border philanthropists" are emerging in an endless stream. Is Amazon selling goods at low prices and selling in large quantities, or making money with high profits? Today I will take a different approach and tell you - "raising prices for the country"

Today is by no means a pure "boiling body", but the price increase is not only for the country, but it is an operation that can actually bring benefits to our entire industry. Let me analyze it from several angles.


As the tariff war eases, cross-border e-commerce is very important


Since Trump started the trade war with us in 2018, our export business has been hit hard, with a significant decline in both trade volume and export volume. The punitive tariffs have also given the United States confidence in negotiating with us, and they want us to give up more interests in exchange for the cancellation of the punitive tariffs.


If there is no major turning point, we will have to take the big stick of tariffs. The purpose of punitive tariffs is to raise the price of Chinese goods and eliminate the price advantage of our products . The tariffs can also attract manufacturing back to the United States and support American products to build factories in the United States to create jobs, killing two birds with one stone.


The Americans had a good plan, but they didn't expect a disaster to strike. The COVID-19 pandemic knocked the whole world down in one fell swoop. Normal production was not possible everywhere because of the pandemic. The shortage of chips and materials since the end of last year was due to this reason. During this pandemic, China became the largest production base. The production capacity of all daily necessities was the largest and best here. The most distressed country was the United States, which imposed punitive tariffs on China at the beginning.


We could have raised the price of Chinese products, dissuaded some Chinese companies from leaving, and supported American products. However, the U.S. was unable to keep up with its own production capacity due to the pandemic, and the other Chinese products that could be purchased were so expensive that they would have nothing to buy if they did not buy Chinese products. So you can see that we were the party that actively promoted the Sino-U.S. trade negotiations, but we are not in a hurry after entering this year. If you are sincere, come and negotiate, if you are not sincere, just wait to suffer. As a result, we waited until the U.S. inflation rate reached the highest point in 13 years last month.

The United States is now eager to restart trade negotiations with China and has released many goodwill signals in the hope of curbing inflation and bringing daily consumer goods in the United States back to a reasonable price.


Therefore, what would happen if there were a group of "philanthropists" who kept providing daily necessities to American consumers at low prices or even for free on Amazon? Of course, it is impossible to save US inflation by cross-border philanthropists alone, but if everyone goes for low prices and large volumes, the inflationary pressure felt by American consumers will be smaller (although the daily necessities sold in supermarkets are more expensive, they can be bought cheaper on Amazon). Even if this is a drop in the bucket, it can ease the pressure exerted by American consumers on the US government, and we will have one more point of resistance at the tariff negotiation table.


By raising prices for our country, we can win back our own profit margins, and throw the punitive tariff pressure from the United States back on themselves, which will also add to our advantage in tariff negotiations.


Exchange rate stability actually requires a lot of sacrifices


Our cross-border e-commerce is one of the industries most directly affected by the exchange rate. Since the beginning of this year, the exchange rate has fallen below 6.4 and once hit the bottom of 6.32. Many people complained that their income had dropped significantly. In the end, the government stepped in to stabilize the exchange rate, which is now maintained at around 6.4. In fact, with the crazy release of US dollars, unlimited printing of money and depreciation, we have sacrificed a lot to maintain a stable exchange rate.


The massive money printing of the US dollar has led to its depreciation. If we want to maintain a stable RMB exchange rate against the US dollar, that means we have to follow suit. We have to print as much as the US dollar is printed, so that the exchange rate can remain consistent. This was the case during the 2008 economic crisis.

In 2008, the US subprime mortgage crisis broke out and launched a quantitative easing strategy. Our central bank immediately followed suit and flooded the market with money. At the same time, in order not to affect people's livelihood, it used the housing price as a reservoir to lock up the over-issued currency and used a strong hand to suppress the prices of ordinary daily necessities. At this time, the US will find that Chinese products that originally sold for one US dollar are still selling for one US dollar after the massive release of US dollars. There is actually no inflation in the world. The economic crisis seems to have been solved directly without causing any adverse consequences (for the US).


Of course, we Chinese know best the consequences of the massive flooding of money back then. So when the coronavirus triggered the US economic crisis in 2020 and the US repeated its old tricks to flood the market with money and wanted us to take over, we firmly said no!


That is why we see the US dollar exchange rate falling all the way. The People's Bank of China has announced that it will "abandon the exchange rate target and guide the renminbi to continue to appreciate against the US dollar." This is a message to the United States: I don't want to play with you anymore. If you want to loosen the money supply, you can do it yourself, and you can bear the inflation yourself.


However, in the end, considering the stability of domestic industries such as foreign trade and cross-border e-commerce that are highly dependent on exchange rates, the central bank still stepped in to support the exchange rate so that it would not fall too much all at once.


Of course, everyone should be mentally prepared. This does not mean that the central bank's strategy has changed. The currency war with the US dollar is too important. It is a major strategy related to domestic livelihood and international situation. Therefore, the central bank's recent support for the exchange rate is only to give the foreign trade and e-commerce industries enough time to adjust. In the long run, the exchange rate will continue to fall. This adjustment is to allow us to raise the selling price to cope with future exchange rate changes. Only when our foreign trade and cross-border e-commerce industries increase prices and have a high risk resistance, can the country let go and fight the US dollar.


Therefore, raising prices for the country is also a response to the country's call, leaving a trump card for more intense confrontations between China and the United States in the future.


Moreover, raising prices and refusing low prices does not mean that products cannot be sold. Many small and medium-sized sellers can maintain a profit margin of about 15% to 30%. When the profit margin is high, they can make money by doing an event with 20% or 10% off. This can be said to be a very comfortable range.


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