The road for traditional manufacturing enterprises to transform into cross-border e-commerce
After analyzing several popular products, each seller has its own experience. At the same time, the quality of the external environment also affects the success or failure of cross-border retail. Traditional manufacturing companies, which we often call factories, are actually accustomed to receiving large orders. The quantity of an order is at least 1,000 or more, or even several million US dollars per order. Overseas customers generally pay a 50% deposit in advance, and production is completed. Full payment due later. The cash flow of traditional manufacturing companies is very good, and there is no need to stock up or occupy working capital. Many factory owners look down on small retail businesses that cost tens of dollars per order.
However, starting in 2017, the order volume of many factories has shrunk sharply, and both the order amount and order quantity have become fragmented, small and personalized. This is fully in line with the increasingly personalized needs of overseas end consumers.
So, based on the above changes in the overseas market environment, manufacturing companies have begun to transform into cross-border e-commerce. They must first achieve transformation in the following six aspects.
(1)The mentality of factory operators. Factory operators need to focus on individual end consumers based on the audience for their products, rather than the previous large foreign wholesalers.
(2) Use of overseas warehouses. Manufacturing companies must first produce a small batch of products and send them to overseas warehouses for trial sales. If they meet the needs of overseas markets, then mass-produce them to avoid blind investment.
(3) How to use funds. The cross-border e-commerce platform settles the payment once every 14 days, which means it takes at least 14 days to purchase the goods before receiving the payment for the first sale. The capital flow is not as good as that of traditional foreign trade. But if you want to transform, you must adapt to the pain of transformation.
(4) Changes in customer needs. The advantages and disadvantages of the product must be determined based on the negative reviews of consumers on the cross-border e-commerce platform, and then improved and put on the market. Sufficient attention must be paid to the product feedback experience of end consumers.
(5) Intellectual property rights in foreign markets. You must design and produce your own products based on customer feedback. For products with good sales, you must promptly register foreign patents to protect original designs. Intellectual property rights are an area that Chinese companies have not paid much attention to. Many factory products are copied and improved from foreign best-selling models. If such products are sold directly, the Amazon platform account will be closed, resulting in the retention of most of the inventory.
(6) Foreign tax compliance. At present, the tariffs in the United States are relatively liberal, and almost zero tariffs can be achieved. However, for the European market, 2018 is a compliance year, and a value-added tax of about 20% will be levied. When transforming cross-border e-commerce and investing in overseas markets, compliance operations must be implemented to avoid tax evasion and tax evasion.
The above six points are the most basic requirements for the transformation of manufacturing enterprises from the most basic aspects of cross-border e-commerce, such as trending, formalization, and compliance. The early stage of starting a business requires rapid trial and error. Although achieving the above points does not guarantee the success of the transformation. But it can be guaranteed that it will not fail soon. After all, for any company, transformation means a second start-up. These points can help manufacturing companies gain a place in overseas competition.