The price chain was banned by Amazon and the funds were frozen for nearly 8 million yuan.
In the tide of titles, the price chain, as a veteran of cross-border e-commerce, has not been spared. In a recent announcement by its parent company, Xunxing, due to the title, the price chain was frozen by Amazon for nearly 8 million.
Frozen funds of nearly 8 million yuan, and the chain of prices has been banned by Amazon
Last year, the wave of bans set off by Amazon caused heavy losses to many Chinese sellers. The top sellers collapsed, and the small and medium-sized sellers were silent, and the chain of cross-border big selling prices was no exception.
In the latest announcement released by Xunxing Co., Ltd., the parent company of the price chain, the balance of accounts receivable for the cross-border e-commerce business with a single provision for bad debts in 2021 is 16.841 million yuan, and the provision for bad debts is 6.8557 million yuan . The accrual ratio is 40.71%. Among them, due to the freezing of some accounts by Amazon, the provision for bad debts by Amazon was 2.6393 million yuan.
Specifically, the account funds of the price chain frozen on the Amazon platform are as high as 7.8975 million yuan , and the explanation given by the price chain is due to the adjustment of the Amazon platform rules, and some of its stores are suspected of not complying with the platform rules.
Although the price chain said that it is communicating with the platform to recover the frozen funds, but in terms of the recovery of the frozen funds of most sellers, there is no sign of the account being unblocked, and the probability of the funds being recovered is very small. At present, the price chain has made provision for bad debts on a 30% individual basis for this part of the receivables .
In fact, this is not the first time that the Chain of Price has been involved in a title storm.
Earlier, the implementation of the new EU tax law triggered a major change in the European VAT system. Due to the failure of the management team of Price Chain at that time to respond in time, some accounts of its Amazon German station were frozen, and the sales money could not be recovered ; in addition, due to previous violations According to the operating rules of the AliExpress platform, the account related to the price chain was frozen. Later, the management team at that time decided to withdraw from the AliExpress channel, resulting in the unrecoverable balance of the sales payment.
In the 2021 financial report of Xunxing, the parent company of the price chain , the operating income of the cross-border e-commerce part was 550 million yuan, a year-on-year increase of 46.48%, of which the total profit was -9.8891 million yuan, a year-on-year decrease of 74.98%. As far as the price chain is concerned, the instability of its revenue and profits in 2021 is not only affected by the wave of titles, but also includes many factors.
The soaring advertising costs seem to be a problem faced by all sellers. Since the tightening of Amazon’s policies, many sellers have called out that Amazon’s advertising costs have skyrocketed and they can no longer afford it, and the price chain also feels the same. As far as the financial report data is concerned, in order to stabilize and improve the listing ranking of products, the cost of advertising, marketing and promotion in 2021 will increase by 21.14 million yuan , an increase of 352% compared to the same period last year .
The current situation of soaring logistics costs last year is obvious to many sellers. In 2021, the total logistics expenditure on the first and second journeys of the price chain will be 65.8492 million yuan. In addition, because more than 30% of the inventory of the price chain is stored in temporary turnover warehouses such as the United Kingdom and Japan, the storage costs incurred in 2021 will be as high as 12.4158 million yuan.
Inventory is also a major factor affecting the revenue of the price chain. In 2021, Xunxing's cross-border e-commerce business inventory will increase by 93.9867 million yuan. The main reason given is that the price chain has just taken over from the original management team in July 2020, mainly to digest the original inventory ; in 2021, the layout of new stores and new products will be increased, and there will be more purchases from August to October, and the inventory will be less than 20%. Preparing for the peak season sales in the fourth quarter; fierce competition in the fourth quarter and changes in Amazon platform policies led to lower-than-expected sales, resulting in a year-on-year increase of 96.35% in inventory at the end of the period, and the inventory turnover rate was 1.88 times, down 24.14%.
The e-commerce sector increased by 23.46%. Can the price chain break through the haze?
In 2022, in the financial report data of Xunxing, we can see that its operating income in the first quarter was 474 million yuan, and the net profit attributable to shareholders of the listed company was 20.2961 million yuan. Among them, the e-commerce business of Xunxing shares increased by 23.46% year-on-year. In contrast, in 2021, its cross-border e-commerce business will achieve an operating income of 550 million yuan and a profit loss of 9.8891 million yuan. It can be seen that the revenue of the price chain is still maintaining a steady growth.
The products sold by the price chain are all self-owned brands, and the production products cover many fields such as household products, health care and beauty, 3C electronic products, automobile peripherals and other products , mainly through third-party platforms such as Amazon and Shopify. Sold to the United States, Europe and Japan and other regions.
There is no doubt that its products provide a huge support for the operating income of the price chain. In terms of data, in 2021, the price chain will achieve online sales revenue of 521 million yuan through third-party sales platforms, an increase of 49.80% compared to the same period last year. The income of home furnishing, beauty, 3C, automotive peripherals and other products were 105 million yuan, 168 million yuan, 171 million yuan, 55 million yuan, and 21 million yuan, respectively accounting for 20.21% and 32.34% of the total annual e-commerce business income . %, 32.8%, 10.56%, 4.09%.
As an old-fashioned big seller, the successful method of the price chain is still worth learning from many sellers . It is reported that the price chain has specially set up a supply chain procurement department, which is mainly responsible for the purchase of goods on sale, packaging materials , payment for purchases, and maintenance of supplier relationships, to ensure that the price chain purchases products on time and smoothly. The second is to stock up in advance according to market conditions through small batches and multiple batches.
But as far as the environment is concerned, the future development of the price chain is still unknown. In recent years, the epidemic has brought huge increments to cross-border e-commerce, but it also heralds great ups and downs. Compared with the previous two years, the profit of sellers has declined quite seriously, especially since the wave of titles last year, the financial report for the first quarter of 2022 issued by cross-border sellers clearly illustrates all this.
Cross-border Link: During the reporting period, the operating income was 1.466 billion yuan, down 51.01% year-on-year, and the net profit attributable to shareholders of listed companies was 10.16 million yuan, down 121.21% year-on-year ;
Huading Co. , Ltd. (the parent company of Tongtuo Technology): During the reporting period, the operating income was 1.569 billion yuan, down 33.79% year-on-year, and the net profit attributable to shareholders of listed companies was 76.23 million yuan, down 187.09% year-on-year ;
Jemet: During the reporting period, the operating income was 184 million yuan, a year-on-year increase of 16.78%, and the net profit attributable to shareholders of the listed company was 9.08 million yuan, a year-on-year decrease of 165.71%. ;
Rebecca: During the reporting period, the operating income was 322 million yuan, a year-on-year increase of 4.55%, and the net profit attributable to shareholders of the listed company was 12.78 million yuan, a year-on-year decrease of 28.33% ;
Tianze Information (youkeshu parent company): During the reporting period, the operating income was 230 million yuan, a year-on-year decrease of 71.13%, and the net profit attributable to shareholders of the listed company was 27 million yuan, a year-on-year decrease of 13.96%.
Among them, there are big names in the industry who have been on the market for many years, and there are high-quality sellers who have just been listed; there are sellers who have been deeply involved in multiple platforms, and there are industry role models who are independent stations. But without exception, their performance in the first quarter of 2022 is not ideal.
For sellers, cross-border e-commerce is still in constant development, and waves of sellers will be shuffled at the same time as wave after wave rises. With the cross-border e-commerce industry becoming more compliant, sellers need to change their traditional methods of seeking dividends and think about new ways of playing.