Chinese sellers are playing an increasingly important role in the "Black Friday" shopping season, but this year, sellers seem to be getting ripped off.

Source: Network

Consumers want bigger discounts

Black Friday may offer an opportunity to snag a bargain, but many shoppers will be looking forward to deeper discounts this year.

Only U.S. consumers plan to spend more this year, while European consumers are expected to cut spending by as much as 18%, the research showed.

The findings come amid a gloomy outlook for the global economy, particularly in Britain, which is already in recession, and Europe more broadly.

Many shoppers said they planned to spend less this Black Friday as a result of the cost of living crisis.

The platform continues to increase fees

Before Black Friday, Amazon’s new round of business adjustments in terms of brand licensing and logistics also involved the interests of many Chinese sellers on the platform.

In the notice sent by Amazon to sellers, it is pointed out that sellers who have obtained Amazon brand authorization can normally sell existing inventory before March 31, 2023, but after December 1 this year, Amazon FBA (Fulfillment by Amazon) warehouses will not be available. Then receive the inbound shipment created by the seller.

Announced at the same time as the cancellation of third-party brand authorization, there are also adjustments to logistics and warehousing costs. Among them, the overall logistics cost of the US station has been raised, and the logistics and distribution cost of each item will increase by an average of US$0.22. In addition, inventory removal and disposal charges will increase.

This is not the first time Amazon has announced a shipping fee increase this year. Earlier this year, Amazon added fuel and inflation surcharges to its shipping fees in response to rising costs. In a recent email to sellers, Amazon stated that "increased costs have not come down as quickly as expected," and that it will adjust standard FBA rates and eliminate separate fuel and inflation surcharges.

Seller: Traffic is expensive but useless, the more you sell, the more you lose

As early as June this year, Marketplace Pulse data showed that the average click cost of Amazon ads has increased by more than 40% compared to 2020. But at the same time, although merchants spend more money on advertising, the average conversion rate has not increased accordingly, stabilizing at 12% to 13%.

From 2016 to 2021, the proportion of Amazon sellers' annual advertising costs to the total cost has risen from 1.1% to 4.6%, which means that the seller's annual advertising expenditure has more than quadrupled.

Although Amazon has always kept its commission at 15%, sellers not only have to bear the rising costs of logistics, advertising, etc., but also often suffer from low prices.

Statistics show that Amazon sellers give up an average of 4.6% of their sales in exchange for promotions. Last year, 60% of Amazon sellers were at a loss, especially small and medium sellers. Only 10% of the companies had a profit margin of more than 20%.

Source: Zhiwushuyan Community

In the Amazon holiday promotion where profits are further compressed, many sellers have been squeezed out of profits.

TEMU's Black Friday discounts are eye-catching

As soon as Temu went online, it opened up the US market at a low price. The initial discount of as low as 100% attracted a large number of American consumers who "sweetened wool". Even at the moment when consumers are cutting back on spending, the ultra-low-priced products on Temu can still make American consumers feel the stimulation of "pupil earthquake".

During the Black Friday period, Temu also launched discounts such as 30% off the first order, a flash sale event page, and a free shipping and return service within 90 days, attracting a constant influx of user traffic.

SHEIN divides traffic

Source: Internet

From the model point of view, the strategies of Shein and Temu in the North American market are almost the same.

The most important thing is to rely on domestic supply chains and suppliers' ultra-low labor costs, manufacturing supply chains, and logistics advantages, supplemented by tactics such as low-price marketing strategies, new user coupons, and traffic on social platforms to attract users.

However, the timing of the two is quite different. When Shein entered the U.S. market a few years ago, it caught up with the era of cheap traffic in Europe and the United States, and promptly found the Generation Z group who are more willing to accept app shopping and consumption habits. The tide of online shopping together constitutes the factors that make Shein stand out.

Chinese products with high cost performance are popular

Source: Internet

The Global Times interviewed Jeffrey, who lives in Gainesville, Florida, USA: "We plan to control spending on 'Black Friday' this year." Friends around him, including himself, plan to buy only necessities this year. "Gifts, toys, etc. The budget is all cancelled."

Jeffrey said that this year's economic downturn, especially recently, many American technology companies have announced layoffs and salary cuts, everyone's wallets cannot withstand large-scale consumption, and we have to prepare for the cold winter.

According to the "Los Angeles Times" report on the 24th, data from Adobe's survey shows that the overall spending from "Black Friday" to "Cyber ​​Monday" shopping season is expected to increase by 2.5% year-on-year, compared with 8.6% last year.

Most American consumers will still spend on "Black Friday". After all, it is an annual large-scale shopping season with many discounts. For a long time, offline stores have been the main battlefield of "Black Friday". Household items such as refrigerators, washing machines, TVs, etc. will appear on most people's shopping lists, because these types of products are very discounted during "Black Friday" .

Wang Minchao, a staff member of AliExpress's "Black Friday" promotion, said : The survey found that European and American consumers are more inclined to choose Chinese products with high cost performance, and prefer to purchase during the promotion. According to feedback from many merchants, the average daily transaction volume of "Black Friday" over the years has been higher than usual, not only because of the large discounts, but also because of the high cost performance of Chinese products.

China's e-commerce platform may welcome market opportunities

Hu Qimu, chief researcher of Sinosteel Economic Research Institute, believes that Chinese e-commerce faces both opportunities and challenges in this year's "Black Five" shopping season in the United States. From the perspective of consumption, the rising cost of living squeezes consumer spending. European and American consumers will adjust their consumption structure, that is, spend their limited budget on daily necessities. This field is the strength of China's manufacturing industry and can also provide China's cross-border e-commerce brings great market opportunities.

Doing business is not doing charity. If Amazon continues to rely on its own traffic and disregards the rights and interests of sellers, it will eventually be attacked by sellers one day.