Amazon was founded in 1995. In more than 20 years, its stock price has increased more than 700 times. Currently, Amazon is the strongest and most popular platform in cross-border e-commerce. It has 14 major sites and 125 operation centers around the world, covering transportation and consumers in 185 countries and regions. In the context of Amazon’s sluggish business in China, cross-border e-commerce has become the right choice.
At the end of 2012, Amazon launched the “Global Store” business. Chinese sellers can directly sell goods to 300 million active users around the world. So far, Amazon has opened the United States, Germany, the United Kingdom, France, Italy, and Spain. The top ten sites including Canada, India, Japan and Mexico cover today’s popular and mature e-commerce markets in the world. There are as many as 3 million third-party sellers on Amazon globally, accounting for nearly half of its annual sales.
Amazon’s operating philosophy is to use the ultimate user experience to increase traffic and drive revenue. Stores with high quality and good service can get more traffic, and the user ratings in its store recommendation system have a higher weight. . Under such a mechanism, the growth rate of global store openings has always led the industry.
Because it encourages sellers to build their own brands, as well as product quality and FBA warehousing services, the user experience is good, and European and American customers are most willing to consume, so the unit price is high, which in turn encourages more high-quality Chinese sellers to join. , the ecosystem forms a virtuous cycle.
In the past three years to 2015, the number of Chinese sellers using Amazon’s “Global Store” to enter the international market has increased 13 times, and the sales of Chinese sellers in North America have increased more than 10 times, and the Amazon China team has even more Expand three times and vigorously cultivate Chinese sellers. Our knowledge is limited, and there are too many things that can be studied by Amazon. Here are a few aspects briefly introduced.
First, operate safely, operate with integrity, and stay away from infringement and fraudulent orders. When it comes to Amazon, the first thing sellers think of is high gross profit and account closure, which is a mixture of love and hate. There is no such thing as love or hate without reason. Amazon’s crackdown on counterfeiting has never stopped, and its protection of intellectual property rights has become increasingly strict. Therefore, sellers should not rush into the gun.
If it is judged to be a fake, there is no authorization, it cannot be confirmed that it is authentic, the actual product does not match the product description or other problems will lead to complaints, warnings and temporary account restrictions. As long as you pay high attention, If you respond and make improvements in a timely manner, and provide as complete complaint information as possible, you are more likely to get your account back; however, if you do not do what you say, you will be judged as dishonest, and the account will not be far away from being “hanged.”
Another type that is more terrifying than selling imitations and fakes is account association. If you are associated, you can basically give up resistance. Appeals are basically hopeless, the remaining balance will be wasted, and the account will be permanently removed from the sale. permissions. Sellers who have never encountered this disaster should not rejoice in their misfortune. If the problem breaks out in a concentrated manner, the damage will be fatal.
In short, we must be vigilant. Amazon can collect consistent historical data to predict future sales and big data analysis. The numbers themselves speak for themselves. The criterion for judging is the specific and real business activities of the merchants. The store is all about “backend mechanisms”, and cheating is inevitable.
The second is best-selling ranking to improve performance. Sales and ranking are a Matthew effect. High ranking means exposure and credibility. Most categories have a Bestsellers Rank, and No.1 means that it has the largest recent sales volume in the same product category in the store.
The ranking is based on sales volume, the speed of replying to inquiries, return and refund rates, evaluation ratings, delivery time, as well as the seller’s order defective rate, order cancellation rate, order late delivery rate and other factors. Indirectly affects sales. Low prices and high rankings win the BuyBox and continue to increase the probability of sales.
According to statistics, 82% of purchases on Amazon are completed through BuyBox, which is a complex snowball mechanism. Of course, product rankings will differ in different geographic markets, and rules change and rectify frequently.
Sending FBA will increase the chance of getting a shopping cart, and there will be traffic tilt, and customer service and after-sales service will be more worry-free. If the seller sees “SoldbyAmazoncom” when referring to the Top 100 product selections, it is best to actively bypass the FBA North American market. Chinese sellers can also apply to join the AmazonExclusive “Exclusive Plan” to obtain brand building tools, exclusive store sales rights, exclusive marketing support and brand protection integrated solutions to enhance brand professionalism.
The third is about FBA (Fulfillment by Amazon), which integrates warehousing and distribution and sells out of the warehouse. Logistics changes e-commerce, and this is most directly reflected in Amazon. FBA, which puts experience first, has become a key means for it to consolidate its market share. 10 years ago, Amazon launched its landmark business FBA for third-party sellers, and it has been unstoppable since then.
Today, 79% of sellers use some FBA services, 44% of sellers use FBA to complete 90% of their sales, and 27% use FBA entirely. 90% of the sales of Millionaire are delivered by FBA. One-third of Millionaire sellers’ FBA products account for more than 90% of the total revenue. Personal brands are more dependent on FBA.
FBA attaches great importance to accuracy and timeliness, and provides free two-day delivery service to Prime members through its local advantages in the United States. Chinese sellers can directly benefit from Amazon’s high-quality customer base and good reputation accumulated through years of operation. Support services, you must know that the growth rate of Prime paid users worldwide in 2015 exceeded 50%!
Recently, Amazon has promoted the cross-border logistics “Dragon Boat Consolidation” (Dragon Boat Consolidation), with the goal of “warehousing at the place of origin, The strategy of “outbound and combined at the sales location” replaces small batches and scattered mailings through intensive trunk transportation. The platform is responsible for the whole process of collecting goods for export, LCL, import customs clearance, arrival at FBA warehouse, and distribution to end users, replacing logistics and even cross-border trade in various regions. middlemen and become the logistics hub.
To put it simply, the first step of FBA is also done. As supply exceeds demand, FBA is increasing its efforts to rectify returned inventory, and unsaleable products are not allowed to be stored beyond the expiration date even if they spend money. Amazon is accustomed to “manipulating” consumers willfully, such as sending prepaid return labels directly to consumers, which increases seller costs to a certain extent. It is no longer cost-effective to do FBA with a unit price of less than 15 US dollars. In order to ensure order timeliness and logistics tracking rate (ValidTrackingRate), many sellers turn to third-party overseas warehouses with more flexible operations.
In terms of logistics, Amazon may have more disruptive moves. In 2015, Amazon spent approximately US$11.5 billion on logistics, of which US$4.2 billion was spent on express delivery, accounting for 5% of its net sales. Amazon has seen from its own “pain points” that there is huge room for improvement in the industry dominated by express delivery giants, which also means new business opportunities and new growth points for future performance.
As a result, Amazon has actively invested in its logistics platform, cut out intermediate links, and instead created its own service system, leasing aircraft, building its own fleet, opening more than 100 logistics centers around the world, and establishing shipping booking companies. , drone delivery, and trying Flex crowdsourcing logistics. The logic behind this is really to create AWS in the logistics industry? Just like in the field of “cloud computing”, it takes over IT from online retail to maximize the resource capabilities of the enterprise. , and redundant output.
Perhaps in a few years, the “boss” of global logistics will not be DHL or UPS, but Amazon. It seems that this accumulated logistics advantage is about to rival its cloud computing capabilities. However, before the peak season of 2016, FBA actually ran out of stock and had too many goods to put on the shelves! In addition, financial services will soon go hand in hand with logistics, extending credit to sellers and providing consumers with and tax advisory services.
Amazon continues to expand its private brands, and at the same time launches the M2C “Manufacturing +” strategy to help traditional large-scale retail and manufacturing industries sell their own brands directly, create an overall supply chain delivery network, and control the flow of goods from factories in China The flow of consumers to Europe and the United States.
The three pillars of cloud computing, e-commerce, and logistics complement each other. Focusing on improving customer experience, we continue to expand our upstream and downstream business scope. What used to be outsourced is now self-built. After the self-built solution operates smoothly , it becomes a platform open to the public for sales: Amazon is not only a giant e-commerce platform, but also a huge ecosystem, covering e-commerce, logistics systems, industrial intelligence, payment systems, cloud computing, culture and entertainment, Internet services (IMDB movie database, Alexa website ranking, etc.), etc., all-inclusive.