Not sure since when, the topic of discussion among Amazon sellers has changed.
Previously, the daily topics of the Amazon seller forum were: How to find evaluation resources? Which service provider is more reliable? How should Amazon Advertising work? Now, in the Amazon Seller Forum, in addition to bans and complaints, there seems to be only advertising strategy discussions.
As Amazon strictly controls compliance operations, the way for Amazon sellers to obtain traffic through "off-site support" has almost been blocked. Can't evaluate, can't use keyword links… Compliance operation has become the general trend.
This has led to increasingly fierce competition in on-site advertising, and traffic has become more and more expensive.
Black hat players: #1 Best Seller in seconds
Since the beginning of this year, more and more sellers are reporting that Amazon is not easy to do, the time line of product layout is very long, and the capital investment is also large.
Of course, we can occasionally see some "Children of the Chosen" emerge in a short period of time. Don't doubt your intuition, 90% of these products use illegal means , including but not limited to cashback cards and machine key words.
Source: Amazon
For example, recently, in a category that Xiao V has been observing, a strange #1 Best Seller suddenly appeared . It is not through the keyword homepage of SP advertisements, nor does it do off-site promotions.
Source: Seller Cashback Card
If it weren't for the accidental discovery of the cashback card he sent to users , I might still be trying to explore the secrets of its efficient operation. After two days of observation, this listing is still "alive", and it is really unpredictable for the rules of Amazon's account sweeping.
In addition, it was also found that this product was on the shelves in many stores, all of which only sold this product, and the time on the shelves was almost the same. The SP advertisement of the listing of one of the stores hit the homepage of the big word. Xiao V guessed that the seller registered multiple stores, one store with white hat and one black hat got exposure, and other stores followed the selling order.
By the way, Black Hat's listing is #1 Best Seller , while White Hat's listing is seventh in the category, so it's no wonder everyone wants to play Black Hat. It can be said that wealth and wealth are sought in danger. As for whether they can land safely, that is another topic.
White hat players: revenue exceeds 2 billion, net profit margin is only 8.5%
Let's look at the case of white hat players again, taking Zibuyu who recently attacked the main board of the Hong Kong Stock Exchange as an example.
Source: Zibuyu prospectus
The prospectus shows that in 2021, Zibuyu will achieve revenue of 2.347 billion yuan; however, the net profit rate of Zibuyu Group in the same period is only 8.5% , which is too low compared to revenue.
Regarding the low net interest rate, Zibuyu once said that the excessive growth of general and administrative expenses and the increase of administrative costs will affect the net profit. This reason sounds reasonable, but it is not convincing.
Source: Zibuyu prospectus
In fact, Zibuyu's continuously increasing marketing and advertising expenses may be eating away at its net profit. Data shows that in 2021, Zibuyu’s advertising expenditure on various e-commerce platforms will reach as high as 319 million yuan, accounting for 13.6% of its total annual revenue.
Source: Saiwei Times prospectus
This is the current conundrum for almost all Amazon sellers, advertising is too expensive. Also in the era of sprinting for IPOs, the CPC advertising fee for half a year was as high as 166 million yuan on Amazon.
Source: Saiwei Times prospectus
Its prospectus shows that this time, 87.7067 million yuan of funds raised will be invested in brand building and channel promotion projects. Most of the project funds will be spent on online advertising channels, accounting for 84.3%.
How can Amazon sellers break through the traffic dilemma?
Combining the above information, we can find that due to the dependence on Amazon's single traffic, the funds invested by Amazon sellers in advertising have seriously affected profits.
Although the black hat seems to be more efficient, if it is banned once, its loss is not easy to predict. As the old saying goes, compliance and careful operation can achieve Amazon's long-termism.
In the era of Amazon's white hat operation, how to obtain orders at a lower cost and obtain higher profits?
Off-site drainage may be the only answer.
