catalogue of Contents
1/ The status quo of business survival under the epidemic
2/ Challenges and solutions of cross-border e-commerce in traditional foreign trade transformation
3/ Advantages and benefits of traditional cross-border e-commerce in foreign trade
4/ What should be prepared in advance for the transformation of traditional foreign trade
5/ Constructive tips for transformation
I heard that the extension of domestic and foreign trade withdrawal orders has reached more than 50%. We started the transformation two years ago, and now is just in time for harvest. The sales in the first quarter did not decline but rose. The annual growth rate is expected to be 20%-30%.
Affected by the international environment, export companies that have relied on traditional foreign trade orders in the past two years have felt tremendous operating pressure, and the urging of the new crown epidemic has caused global consumption to accelerate from offline to online-“Zhaijia still buys and buys The “buy” cross-border e-commerce model just meets the consumer demand during the epidemic prevention and control period, and the online service business volume increased by more than 300% year-on-year1.
Cross-border e-commerce has shown vigorous vitality. In April, the country set up 46 new cross-border e-commerce comprehensive test areas, covering 30 provinces, cities, and autonomous regions, injecting a “heart-pin” to stabilize foreign trade. The cross-border e-commerce of the two conferences that just closed also received special attention. The “Government Work Report” proposed to “accelerate the development of new business forms such as cross-border e-commerce.” Predict the future share of cross-border e-commerce: “After 10 years, one-third of the trade volume will be completed through cross-border e-commerce.”
And those foreign trade sellers who have embarked on the transition road of cross-border e-commerce earlier have received much attention and envy from the industry because of the stability and growth shown in the epidemic. Is the road to transformation good or bad? What are the advantages and challenges of traditional foreign trade as a cross-border e-commerce? Today we will focus on the three Amazon sellers who are on the road to transforming cross-border e-commerce and listen to what they say.
Affected by the epidemic, orders in the overall foreign trade industry fell by nearly 50%. For Amazon sellers who have transformed cross-border e-commerce, after a small wave of shocks, the situation is gradually returning to stability, and under the catalysis of the epidemic, e-commerce is expected to accelerate development.
The epidemic caused a short-term shock: the overseas situation was stable in February, and sales have been gradually increasing. Due to the outbreak of the global epidemic in early March, the situation has turned sharply and sales have dropped by 60%. It began to gradually recover in late March and is now basically normal. I feel that overseas consumers have now adapted to the existence of the epidemic. Under the stimulation of consumer subsidies, consumers’ purchasing power has also improved significantly.
In order to respond to the changes brought about by the epidemic, we first expanded the product category. Previously, we only made outdoor products. Now we have added small household appliances and household products that are explosive during the epidemic. Secondly, in terms of logistics, some products related to epidemic prevention began to switch to direct delivery in early March, and small packages were sent from China to make up for the lack of sales.
I think that the epidemic will eventually promote the development of e-commerce. American supermarkets, shops, and local factories are affected. I think there will be a better breakthrough in online sales in the next two months. Overall, the future development of e-commerce may be better than before there was no epidemic.
The outbreak initially affected our domestic supply chain. Many workers in February could not return, but Amazon sales were still very good that month. The sales experienced a small cold snap in mid-March, probably around March 20th, and suddenly one day sales fell 40%, and returned to normal after about 10 days. At present, the overall decline in the first quarter is 10%, most of which is caused by the lack of supply.
Because of the increase in logistics time, we adjusted the stocking plan, and will prepare one to two more months before the end of the epidemic.
We estimate that the epidemic situation should accelerate the development of e-commerce, so we are now accelerating the pace of site deployment, and the new Japanese station was opened last month.
The epidemic has almost no effect on us, and sales are now steadily increasing, breaking records almost every day.
Transformation will usher in more opportunities, but also means more challenges. Several sellers recalled that language and operations were the biggest difficulties.
In our opinion, the high threshold for cross-border e-commerce is primarily due to language. Writing List, understanding the overseas consumer markets, etc. must first break through the language barrier. It is the language barrier that has caused many foreign trade factories to look forward to cross-border excitement. However, once you master the language tools, you will find that cross-border is actually easier to get started than domestic e-commerce. To solve the language problem, in addition to learning by yourself, hiring a language professional, absorbing overseas returnees, or directly hiring overseas employees are fast and feasible ways. Language is a key link that cannot be bypassed across the border but is not difficult to break through, as long as you have the courage face.
After crossing the threshold, the key to winning is in operations. A friend once tried Amazon, the team had no operating experience, and directly sent a full cabinet of charging treasure, keywords, advertisements, etc. but did nothing, but the result was not sold for half a year, and has been pressed on FBA. After that, I requested professional operation assistance, and the inventory was sold out within two months.
“Is this product suitable for this regional market? How and how often should the goods be transported?” Cross-border new entry, how to operate must be confused. At the beginning, we didn’t ask for the right operators. Some problems occurred: the selection of products was inappropriate and we couldn’t sell them. There was a stagnation of goods in the logistics. We experienced a trial and error process of paying tuition. Now I finally learned to master the operation logic in actual combat, and it is on the right track.
There is a shortage of talents for cross-border e-commerce operations. Foreign trade factories want to try cross-border e-commerce business but suffer from zero experience and do not understand operation. You can start learning from Amazon!
Amazon has a very complete basic operation tutorial. As long as the right employees are arranged to follow the tutorials provided by Amazon, you can try to do it completely. It is not so difficult to enter the industry.
The official introductions and help pages of Amazon Seller University and Amazon’s various auxiliary services can help us become self-taught. Amazon provides sellers with a heavy product and light operation environment. As long as you make good selections, Amazon provides powerful operation assistance. It is still very easy for sellers to operate, and Amazon’s supporting services can help operations. For example, how to write Listing, how to advertise, how to plan logistics, Amazon will teach.
In a special period, the traditional foreign trade transformation cross-border e-commerce is obviously a good choice for the traditional foreign trade industry, especially in terms of anti-risk capabilities, profitability, and cash flow health.
One more sales channel and one more point of pressure resistance. Looking at the general trend, the traditional foreign trade will still face a lot of competition and pressure in the future. The United States, Europe, Japan… are encouraging the supply chain to return to the local market for self-production and sales, forming a closed loop. Foreign trade orders must be reduced. In terms of microclimate, foreign trade orders will fluctuate due to various factors such as the epidemic situation, but cross-border e-commerce is C-end orders, with stable rhythm and stable quantity, and can also be reflected in time if there are problems. You can directly adjust the output without the sudden fluctuation of orders. Sudden stop is a good way to control risks. Increasing cross-border e-commerce business can strive to make up or even exceed the original traditional trade sales.
The first is that profits have doubled. Previously, traditional foreign trade could achieve a gross profit of 15%-20%, and now cross-border e-commerce can roughly rise to 40%. Another biggest benefit is to make the cash flow healthier: we pay back the money once every two weeks, and the money can be recovered quickly after the goods are sold out. Compared with the traditional foreign trade, the payment cycle is very high in two or three months, or even three or four months. Advantage.
Traditional enterprises have their own supply chains, and they are familiar with foreign trade business. They have advantages in both cost and product development.
Integration of industry and trade, cost is dominant. The integration of production and sales, the same function, the same product, my cost is definitely lower than the foreign trade dealers who purchased from me, which is a great advantage in competition. For example, one of my products competed with Amazon’s similar models on Amazon. Selling at a price 20% lower than that of my competitors also maintained a healthy profit. If the competition required, I could even set the price Set lower. This made me realize that cost competitiveness is the first competitiveness of foreign trade factories to participate in cross-border e-commerce business. This advantage can be used well to provide great help to market development and consumers.
Advantages of product development. My entrepreneurial partner has been doing clothing design, and at the same time he loves yoga, so we have our own advantages and confidence in the product development and design of yoga clothing, plus my factory has some professional copycat personnel to quickly implement the design -Sampling-The whole process of production, which allows us to launch exclusive products with differentiated characteristics based on market feedback.
Traditional foreign trade needs to be a cross-border e-commerce, not just moving products to sell online, from product development to brand building, first practice internal skills to prepare.
I think we must maintain and strengthen product development capabilities. There are indeed many foreign trade counterparts who directly sell some customer styles when they cross-border, but this effect is not very good. To transform, you can’t just sell what you have, but also depend on what is needed in the market. If the product is developed exclusively by itself, then it has an important competitiveness. The traditional foreign trade factory of OEM origin has its own product development capabilities, and is good at implementing the specific needs of customers. Now it is just replacing the order requirements with Amazon consumer reviews, upgrading and innovative design of products based on consumer feedback, and then superimposing foreign trade The factory’s flexible production capacity can be more successfully grasped.
From the start of cross-border e-commerce, we must insist on building our own brand. There are too many benefits of brand, brand premium, rising consumer trust, sales growth… But the brand is not something that can be done, it has a deep connotation, including a series of combination punches such as quality and product promotion. Do a lot of things, so you must have brand awareness at the beginning and build your brand consistently. Taking ourselves as an example, we have been a brand among our peers for three to four years earlier, so we are now close to a state of small harvest, pricing has a brand premium, and sales also receive brand benefits.
Traditional foreign trade is struggling, the industry is eager to transform online, and cross-border e-commerce is the direction of transformation that is generally optimistic. While there are not many entrants, there is still a chance to take advantage of the quick action. Moreover, compared with the fierce competition of domestic e-commerce, cross-border e-commerce operations are easier and more profitable.
The factories I contacted may be more traditional. What they think is to transfer part of their sales to cross-border e-commerce companies like us to sell for them. But I think that if you really want to transform online, it is easier to do cross-border e-commerce than domestic e-commerce. China’s local e-commerce has been settled for a long time, market operations and operations are mature, and competition is fierce. For those who do traditional foreign trade, suddenly entering the domestic e-commerce will be particularly difficult, but cross-border e-commerce will generally be easier, because cross-border e-commerce still has a large market, and they are used to dealing with overseas products. It is also more suitable for overseas consumers.
Now is a good window period, the Red Sea has not yet formed, and there is still a chance to become a first-entrant. We all know that the foreign trade industry is indeed very difficult, but the first thing that everyone thinks about is the transfer of domestic orders. Everyone knows that e-commerce is a good way out, but this is a new field, especially cross-border e-commerce. Foreign traders are completely foreign. Anyone who is capable and willing to invest time and effort to try, at any time, seize the present is a good time.
More than 90% of the foreign trade around me is thinking about transformation, and wants to transfer his offline business online, and then to be his own brand. Cross-border e-commerce is the most concerned way. In fact, there are many familiar colleagues who want to talk to us. Cooperation, let us teach them Amazon operations. To be honest, my feeling is that overseas sites are easy to make profits, and domestic e-commerce profit margins are small. The tooling shoes we make are priced on Amazon at an average of $100 or even $200. The same products are sold in China, but the sales volume is very low, because at present the generally acceptable price for domestic consumption is about one or two hundred yuan, or even fifty or sixty dollars, so to make profits or cross-border e-commerce.
The traditional cross-border transformation of foreign trade and the integration of industry and trade can allow China’s manufacturing power to directly face the global C-end consumers, get out of the crisis of order interruption, obtain a healthier profit margin and cash flow, and stabilize the situation in the current turmoil. The three first-hand sellers shared their experiences and gains. Are you excited about this transformation bonus? If you are also a foreign trader who is in danger, you may wish to try the cross-border e-commerce road. As long as you have the courage to take the first step and wait for you, it may be a beautiful Jedi counterattack.
(Source: Amazon Global Opening)
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