Entering August, some Amazon sellers ushered in an increase in both orders and traffic. Especially in the past two days, more sellers reported that orders have increased significantly. As speculated by industry insiders, many states in the United States sent money, and Americans began to buy and buy.

As inflation in Europe and the United States has intensified, more consumers have begun to pay attention to some low-priced items. Walmart and Target have cleared their inventory at low prices. Biden recently passed the inflation bill, which seems to have no effect on reducing inflation. This could further hit the business of cross-border sellers.

In addition, Amazon has increased delivery fees during peak seasons, and the Yiwu epidemic has disrupted sellers' holiday season stocking rhythms. There are still many uncertainties in cross-border e-commerce as a whole in the second half of this year. However, the favorable factors for sellers in the peak season have already emerged. Compared with last year, this year, the cross-border freight rate has dropped and the US exchange rate has improved, and the related losses of sellers will also be reduced accordingly.

The order volume has rebounded significantly, and the seller: Has the United States sent money again?

Recently, many Amazon sellers have reported that orders have ushered in a sharp increase. This phenomenon is not the previous small increase. A seller therefore asked: "Have Americans sent money again? Why are orders so heavy today?"

Another seller encountered the same situation. He said: "Today's orders have increased by 200. Is the peak season coming, or is the United States sending money? Is it because the inflation that everyone expects has dropped, and Americans have begun to resume consumption?" .

In fact, not only orders have risen, but some sellers have also ushered in an increase in traffic. Some sellers introduced that in August, the traffic has rebounded, which is much better than that in July. This is not an exception.

Even though the performance of some sellers has recovered, the proportion of sellers with poor orders and traffic is still larger. The feeling of many sellers is: "I feel that August is not as good as July, the conversion has been reduced by half, and the order has continued to decline." The specific situation of a colleague is: usually two or three hundred orders, members are five or six hundred orders per day, and it has continued to decline since then. Now it has become twenty or thirty orders.

In various information channels, we see that Amazon sellers will often mention topics such as order decline and traffic reduction. According to people familiar with the matter, this kind of order decline is generally relatively speaking, and few people really "can't survive." ”. And those who do well basically don't come out and say they are doing well, they are more just making a fortune in silence, and they will only say average when asked by their peers.

Like sellers whose orders have soared recently, they are already on their way to the peak season. The reason for the increase in orders is also related to its speculation. At present, people in many states in the United States have received or are about to receive a tax refund.

According to foreign media reports, a number of states in the United States are issuing additional subsidies to eligible residents. In August, 16 states in the United States, including California, Colorado, Delaware, Massachusetts, and New Jersey, formulated their own stimulus plans to better help the people.

New Jersey Gov. Phil Murphy signed legislation to allow eligible New Jersey residents to receive checks of up to $500 as part of the middle-class tax rebate program to those filing 2020 income taxes with at least one dependent A child tax credit is available to families of people.

Thanks to new legislation signed by Gov. Janet Mills, Maine single filers and couples will receive $850 and $1,700, respectively.

California Governor Gavin Newsom said in June that millions of Californians will receive inflation relief later this year as part of a new tax rebate program to help the middle class. Eligible individuals will receive up to $1,050 in assistance between late October 2022 and mid-January 2023.

Illinois residents witness the state's $1.83 billion family relief package, which kicked off in early July, includes a moratorium on the 1% grocery sales tax through June 30, 2023, as well as a sales tax reduction to stimulate the back-to-school shopping season Consumption.

South Carolina Gov. Henry McMaster signed a new bill in June that would soon see eligible residents receive income tax rebates of up to $800, which are expected to be delivered in November and December.

Because of a Massachusetts law of 1986, the state government must return excess taxes to taxpayers. That means many residents could get a cut of the state's roughly $2.5 billion in surplus cash. Massachusetts Gov. Charlie Baker said residents will get a 7% 2021 state income tax rebate, which would be about $250 for someone earning $75,000 a year.

This time, there are other states receiving tax refunds in the United States. The scope of this tax refund is very wide. Residents of most states will receive a tax refund this fall. With money, spending power will return. The arrival of an unexpected sum of money may become a huge driving force for American consumption.

Is the inflation bill signed by Biden really useless?

As the American people consume, what is emerging now is that low-priced, low-volume products are significantly more popular. And some giants are also offering discounts to capture more sales, including Walmart and Target.

U.S. consumers are increasingly focusing on smaller quantities, opting for smaller packages and buying products like canned tuna and beans instead of beef, said John David Rainey, Walmart's chief financial officer. More often they choose to pay by credit card rather than regular debit card.

Rising prices for energy, food and housing have put consumers off, but that's good news for discounters. Walmart is gaining market share by attracting new customers in high-income groups. As a result, the company reported total revenue of $152.9 billion in the second quarter of this year , up 8.4% year over year and above the consensus estimate of $150.99 billion.

Walmart's e-commerce grew 12% in the second quarter. However, operating profit fell 6.8% due to price discounts, reduced demand for high-margin products such as electronics and apparel, and higher labor costs.

Another American retailer, Target, is also pursuing a low-price strategy. Target also announced its second-quarter results yesterday. Revenue in the second quarter was $26.037 billion, a year-on-year increase of 3.5%, slightly lower than market expectations; net profit was $183 million, a year-on-year drop of 89.9%; diluted earnings per share was 39%. cents, less than market expectations of 72 cents.

The company said that the sharp drop in profits was mainly due to the impact of sharply lowering the price of goods and actively cleaning up inventory. Products that performed strongly in the second quarter included food and beverages, beauty and household staples.

Talking about the reasons for the sharply slashed sales, Chief Financial Officer Michael Fiddelke said that Target must act quickly to clear the redundant inventory, prepare for the holiday and weather the economic background of inflation.

"We could have avoided a sharp drop in profits, but not aggressively dealing with excess inventory will hinder long-term growth potential," Fiddelke said.

Wal-Mart and Target have cleared their inventory and cut prices, which is in line with the psychological expectations of Americans to buy products at low prices. Nearly 600,000 UK households now cancel their Amazon Prime subscriptions ahead of price hikes as inflation rises and consumers are more cautious with their spending .

Inflation has affected the consumer confidence of European and American people. In order to ease inflation, US President Biden recently signed the " 2022 Inflation Reduction Act", which officially took effect on the 16th local time.

Democrats claim that the bill can ease inflation and reduce deficits, but a number of foreign media have published articles saying that relevant experts almost unanimously believe that the bill will have no effect on reducing inflation, but will instead increase inflation or cause the U.S. economy to further decline.

Over the next decade, "the bill's impact on inflation will be statistically negligible ," according to a budget model from the Wharton School of the University of Pennsylvania .

Economists have long noted that the burden of inflation is heaviest on the working class, the poor and retirees with fixed incomes. However, much of what the bill contains actually has nothing to do with working-class people. The biggest beneficiaries of the regulations can only be American corporate giants and wealthy Americans living in wealthy coastal regions.

The bill on the surface is to reduce inflation and develop the economy, but in fact it is not. After the implementation of the bill, the working class will continue to suffer from high inflation, and at the same time, it is difficult to enjoy the subsidies stipulated in the bill, and must bear more than 20 billion US dollars in tax burden.

Inflation and price cuts by U.S. retail giants will both hit cross-border sellers' sales, and rising costs make things harder for sellers.

Amazon fulfillment fees have risen 30% in the past two years

Yesterday, Amazon US informed sellers that this year's holiday season will increase supply chain operating costs, so it will follow other carriers, from October 15, 2022 to January 14, 2023, the platform will charge holiday sales season delivery. cost. For items sold using FBA in the US and Canada, the corresponding fee is an average of $0.35 per item.

Amazon said that the freight volume in the peak season is concentrated, and the industry's order processing and distribution costs will increase. Before, the platform itself borne these rising costs, but the seasonal costs continue to break new highs, so they decided to charge this amount at a specific time each year. High season surcharge. The platform also said that even after the price increase, its delivery fee is still very cost-effective among its peers.

But the seller obviously didn't buy it. Because of the rebound in the dollar exchange rate, the profit statement of sellers in the United States has looked better, but now, they bluntly say that the income brought by the exchange rate has been taken away by the platform in the backhand.

For example, Amazon will impose a peak fulfillment fee for apparel products, during which all standard-size and oversized products over 0.75 lbs will use the greater of the product weight or dimensional weight to calculate the shipping weight.

A winter clothing seller said that he sent the goods last year when the first trip was the most expensive, but the return rate last year was much higher than that of previous years. Due to the high value of the products, he did not want to sell them cheaply, so he had to bear the storage fee for a year. I plan to sell it this winter, but the warehousing cost tripled, and now the delivery fee has risen again in the peak season. Is it to sell at a loss or not to sell? Very depressed.

According to Marketplace Pulse, Amazon has increased fulfillment fees by more than 30% since 2020. A series of small fee increases add up to a growth that cannot be ignored, and Amazon is passing on its rising costs to third-party sellers.

( Changes in Amazon FBA fees since 2018)

Under the new fee adjustment rules, Amazon will charge sellers $5.06 for shipping 1 pound of items during the holiday season , compared with $3.48 for shipping the same product in 2020, an increase of 45%. In terms of item volume, the delivery cost of smaller items is about 30% higher, and large and heavy items are 20% more expensive.

In fact, USPS, FedEx, and UPS have all raised their fees and introduced peak holiday surcharges over the past two years . For Amazon, many 3PLs have been raising their fees, and shipping inside and outside of FBA has become more expensive. . But the frequent price hikes still make sellers angry.

The first was on June 1 last year, when Amazon increased the fee for shipping a pound of items by 77 cents. Then on January 18 of this year, the fee was increased by 27 cents; in April, Amazon added another 23 cents to the fuel and inflation surcharge. Then came the most recent one, when Amazon added 31 cents to its holiday season fees. This fee has increased by a total of $1.27 over the period. Not only that, but storage fees also increased earlier this year.

After the holidays, the combined delivery fee that sellers pay will drop, but only temporarily. Taken as a whole, Amazon is gradually increasing its weight every year, and even if the factors driving its price increase this year are no longer present, it is unlikely that these fees will drop significantly.

With most sellers already using FBA as their default shipping method, these fee increases are bound to affect everyone. Given the increased cost, sellers will respond by raising prices, which ultimately means consumers need to pay more for their purchases. Yesterday, many sellers have expressed that they want to increase the price and put profit first.

Although there are unfavorable factors such as the continuous impact of inflation and the increase in delivery costs, for many sellers, the two factors that had the greatest impact on cross-border business last year and the first half of the year have eased, and the pressure from this aspect has become less.

The unfavorable situation for cross-border sellers has improved

In the past two years of operation, high shipping costs and high foreign exchange losses have always been the two big mountains that weighed on sellers' profits.

Home Furnishings Lego has a high demand for stocking in the shipping channel, and the shipping cost remains high in the first quarter. The weighted average price of 40HQ high container has risen from about $6,000/container in the first quarter of 2021 to about $15,000/container in the same period of this year , as a result, during this period, sea freight accounted for 14.45% of its cross-border e-commerce business revenue ratio.

During this period, the average exchange rate of the US dollar rose from 6.51 to 6.36, and the average exchange rate of the euro rose from 7.86 to 7.12, all of which had a considerable impact on the company's earnings.

But now, the pressure from both sides has changed.

In the first half of the year, the year-on-year growth rate of China's export container freight index has slowed down. In July, the average value of China's comprehensive export container freight index released by Shanghai Shipping Exchange was 3239.69 points, an average increase of 0.4% from the previous month; the average value of the Shanghai composite export container index reflecting the spot market was 4061.29 points, an increase of 0.4% from the previous month. The monthly average fell 3.8%.

Specifically, in July, the freight rate of the European route was hovering at a high level. The average freight rate index of China's exports to Europe and the Mediterranean route was 5,052.54 points and 5,901.71 points, an average increase of 0.1% and a decrease of 2.8% over the previous month. The freight rate of China’s exports to the west and east of the United States was 2,585.83 points and 2,959.03 points, respectively, down 3.5% and 1.8% from the previous month on average; the market freight rate of Japan’s routes fell slightly, and China’s exports to Japan The average freight index of routes was 1194.50 points, down 1.9% from the previous month.

In the freight market, due to the reduction of sellers' shipments, the sea freight price has been reduced repeatedly, and the air freight price has also been significantly reduced. For sellers with shipping needs, the transportation cost can be greatly reduced compared to before.

On the other hand, the performance of various exchange rates has also changed.

From June 2020 to February this year, sellers in the US market experienced a long period of continuous decline in the dollar exchange rate. Every time the exchange rate fell, some people wondered why they did not withdraw cash earlier. After mid-April, the dollar exchange rate ushered in a strong rebound, breaking through the 6.8 mark at the highest point. On August 17, the onshore RMB exchange rate against the US dollar closed at 6.7757 yuan at 16:30, up 162 basis points from the previous closing price.

According to reports, the short-term RMB exchange rate flexibility has increased due to the unexpectedly lower policy rate by the central bank. Recently, the offshore USD/RMB exchange rate has retreated after breaking through the 6.8 mark, and the onshore RMB exchange rate also approached 6.8. Whether it can break through this mark has also become the focus of the industry in the near future.

However, except for the dollar which continued to be at a high level after rising in April, other currencies commonly received by cross-border sellers this year, such as the euro and the yen, have all shown a downward trend in exchange rates, which has put pressure on sellers targeting Europe and Japan. multiply. Among them, the exchange rate of the euro against the renminbi has continued to decline since August 2020, and has fallen below a new low in the past two months.

According to data from the China Foreign Exchange Trade System, on August 17, the central parity rate of RMB in the interbank foreign exchange market was: 1 US dollar to RMB 6.7863, 1 euro to RMB 6.9025, 100 yen to RMB 5.0526, and 1 pound to RMB 8.2103.

Several are happy and some are sad. When the sellers in the US dollar are relieved, the sellers in the European and Japanese markets are frowning. Coupled with the influence of European tax reform, Russia-Ukraine conflict and other factors, some sellers are reducing their business in the European market and selling to the US market. Put more effort into it. However, the latest peak season delivery fee has just poured cold water, and the sellers in the United States are also a little less interested.

Now that the peak season is approaching, on online platforms such as Amazon, Halloween products are starting to be sold, and Christmas products are also being ordered. Many sellers are still stocking their Christmas products. Yiwu can be said to be the source of Christmas supplies in the world. However, the recent local epidemic has stopped many factories and logistics and transportation, and the rhythm of sellers' stocking has been disrupted.

There are feedbacks from Yiwu cross-border e-commerce sellers that their living areas are still under closure and control, and many sellers who received goods from Yiwu also said that local suppliers are temporarily unable to deliver goods. However, the latest news from the Yiwu Municipal Government shows that there have been no new social issues in the local area for 3 consecutive days, there is no high-risk area in the whole area, the medium-risk area will be adjusted to 3, the silent management area will gradually shrink, and the overall epidemic situation is improving. We will go all out to resume work and production, and the cross-border chain will be dredged just around the corner.

In 2021, the U.S. holiday season saw the strongest retail growth in more than 20 years, according to eMarketer research data. Total consumer retail spending rose 16.1% year over year to $1.221 trillion, while brick-and-mortar store sales surged 17.3% to $1.017 trillion and e-commerce rose 10.4% to $204.2 billion. Among them, Amazon, Walmart and eBay lead the way in terms of retail traffic.

In 2022, holiday retail sales are expected to grow 3.3% to $1.262 trillion, with e-commerce rising 15.5% to $235.86 billion. The peak season is still a major opportunity for sellers.