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80/20 Of Ecommerce – July 15, 2022

Rumors on Prime Day slump, not true?

Image credits: eStore Factory

This Prime Day, consumers are growing to be practical.They are prioritizing necessities over indulgences, yet they are still spending more than expected.

Purchase data findings show that the average Prime Day 2022 spend per order is $53.14 compared to last year’s $47.14. So far, 42% of orders have been for $20 or less, while 13% have been for $100 or more.

Amazon has geared its attention toward attracting bargain hunters searching for affordable pantry stocks and low-priced electronics. A report from Numerator recorded last Tuesday that there was an increase of 20% in the typical household spending since the previous June sale. The best-seller in the early hours was a Frito-Lay variety pack of snack chips.

Furthermore, the report said that 83% of Prime Day buyers consider inflation as the primary variable affecting their purchasing behavior. 

Yet there is another product category experiencing a profit increase. Branded items generate a big chunk of Amazon’s annual sales and have increased by 30% during Prime Day despite offering lesser discounts. It has outstripped the single-digit growth expectation.

Sellers experienced a sales surge hours after the launching of the event. According to Channel Key e-commerce consulting firm, their clients experience a 12% spike in sales in the first six hours of Prime Day compared to the previous year.

Takeaway: What probably made Amazon Prime Day 2022 a hit? Forbes reported on July 13, Thursday that aside from flooding consumers with organic and paid campaigns on social media, Amazon affiliate program appeared to be effective. Influencers and news outlets alike curate offers and goods in exchange for an affiliate commission on any sales made as a result of their promotion.

E-commerce inflation increased by 0.3% YoY but fell by 1% MoM in June

Image Credits: EcomCrew

According to the Adobe Digital Price Index report, online grocery prices continue to increase despite inflation falling. In June, grocery prices rose by a record 12.4 percent year over year, setting a new high. This gain comes after earlier record-breaking year-over-year increases of 7.6% in February, 9% in March, 10.3% in April, and 11.34% in May.

As a consequence, e-commerce spending appears to be declining more in June ($74.1 billion) as compared to what was recorded in April ($77.8 billion) and May ($78.8 billion).

Adobe Commerce survey released recently revealed that 61% of consumers were waiting for Prime Day sales to avail of promos and deals. Some even plan to make their most significant purchases at this event. They say they would maintain their previous year’s expense limit or would spend more. 

The first day of Amazon Prime Day revealed that inflation and the downward sloping economy will impact the sales this year. Americans spent $4.7 billion less in June than the previous month.

Takeaway: The ecommerce inflation has reshaped Amazon Prime Day, especially consumer behavior. Even though Prime members are willing to spend more than they spent last year, they are still willing to give up a good deal for the reason that the product is not a necessity.

Report: E-commerce sales to exceed $1 trillion this year

Image Credits: Vapulus

FTI Consulting projects that in 2022, online retail sales will reach $1.07 trillion, surpassing its pre-pandemic prediction of 2025, partly due to growth brought on by the pandemic. Online retail sales outside the car and gas industries will reach 22.1 percent by 2022, up from 20.8 percent in 2021 and 15.2 percent in 2019.

The report further says that e-commerce sales will reach $2 trillion by 2030 and account for 31% of total sales by the decade’s end.

According to a 2021 Forester report, even though eCommerce has already established its pillars in the retail industry, physical stores remain significant, and three-fourths of the retail sales in the US will still occur in person. 

A poll of international retail leaders Ipsos for Publicis Sapient and Salesforce found that 44 percent of online-only merchants were not profitable, compared to 20 percent of brick-and-mortar stores that reported the same. Operating an online-only business is still difficult.

Takeaway: Online shopping in this past 2 years was driven by necessity due to Covid-19 restrictions. FTI Consulting said that ecommerce spending in the 2nd half of 2022 will modulate as the pandemic cools down and the inflation rises.

7 Figure Seller Summit Pre-Event Survey – Vote now!

I’m building out the 7 Figure Seller Summit 7 and would love it if you could spend 5 min to fill out this short survey so I can learn about your challenges and goals for the remainder of 2022.  

I would appreciate your honest feedback as this will help us create the best Amazon conference for you!

5 min survey: https://forms.gle/sbn4KZaxz4xpsnjg7

Thank you so much!

7FSS Top 5 Youtube Videos for 1H 2022

Have you checked out our Youtube channel yet? For the first half of the year, we were able to invite awesome guests and experts who have shared a lot of tips and value.

Here is the list of top 5 videos on the 7FSS Youtube channel for this year:

#5 – Amazon Profitability MASTERCLASS: How to Know your Numbers and Turn Around Declining Sales

Gary invited Marc Jepsen from ManageByStats to share how you can know your actual profits so you can SCALE and prevent your sales from decreasing over time. This conversation has helped sellers know their numbers as they run their Amazon business, 

#4 – I interviewed 153 7 Figure Sellers, Here’s what I learned

In this video, Gary discussed one-by-one his key takeaways after he interviewed 153 – 7 figure sellers and ecom experts after hosting the 7 Figure Seller Summit – an online event that was voted favorite amazon conference two years in a row in seller poll.  

#3 – Scaling an Amazon FBA Business from $144K to $1M: Best Practices in Capital, Cashflow, and Funding 

Don Henig from AccrueMe provided valuable training on scaling an Amazon FBA Business from $144K to $1M: Best Practices in Capital, Cashflow, and Funding. Important points such as the biggest mistake made by sellers when scaling, vital factor in financing your growth, and establishing a company vision were tackled.

#2 – “The 3 Pillars of Profitability in Ecommerce” Live Training with Gary Huang

In this live webinar, Gary unraveled the 3 pillars of profitability. Each pillar aims to assist sellers in how to offset high shipping costs, warehouse costs, and rising material costs; have more budget to spend on PPC to beat your competitors; increase your bottom line EBITDA and maximize a potential exit; and maximize business strength in 2022 as the competition increases.

#1 – [Sourcing Masterclass] Negotiating Your Way to Success When Sourcing From India 

This live Masterclass with Margaret Jolly and Meghla Bhardwaj, Co-Founders of India Sourcing Network, shared strategies for negotiating with Indian manufacturers to learn. They also touch down on proven negotiation strategies, negotiating timing, other things to deal with apart from price, cultural sensitivities, and common mistakes to avoid that could cost you time and money.

In case you missed it

Have a great weekend

Gary

80/20 Of Ecommerce – July 8, 2022

Amazon uses influencer relationships to bolster Prime Day sales

Image Credits: Pexels

Amazon has launched its Amazon Influencer Program with the belief that it would fuel the success of its upcoming Prime Day. 

The program would leverage influencers to raise brand awareness and inform consumers about Prime Day deals and promos. Then, Amazon pays popular social media users to promote its goods on sites like Instagram, TikTok, and YouTube.

Recently, they organized some events that invited some influencers and gave them a sneak peek at the Prime Day deals. After reporting $3.8 billion in losses at the end of Q1 2022, Amazon’s Prime Day sales event is becoming more and more crucial.

Takeaway: Will Amazon’s last punch for Prime Day be an effective strategy? The move by Amazon to rely more heavily on influencers for Prime Day comes in this era of creator economy. So, it is up to the consumers to decide on which has more weight— their trust in the content creators or the recession that we are currently facing. 

Retailers, determined to bulls-eye e-commerce growth

Image Credits: Pexels

The pandemic placed e-commerce into the spotlight. The last two years of juggling through the restrictions have pressured retailers to increase their digital capabilities and efforts. 

However, the digital paradigm shift in the retail industry is not enough. Being in the virtual realm will not suffice as there are a lot of other variables such as inventory and inflationary pressures that might erode the business’s profitability. Retailers also fail to find their niche in this everchanging game.

Giant retailers are not an exception. Amazon, Target, and Walmart have been experiencing profit warnings and inventory pain points on their end.

46% of the respondents in the Publicis Sapient/Salesforce survey said that their e-commerce store is less profitable than their physical one, and 37% are hitting below profit target.

To address all these dilemmas, Hilding Anderson, Head of Retail Strategy in Publicis Sapient, emphasized how vital customer service is in their research. Online shopping apps should integrate the ease of use and improvement of CX. In other words, e-commerce should make its decisions for the welfare of its customers. After such, profitability follows.

Takeaway: Putting your products available online to keep up with current demands is one thing, but improving your digital customer experience is another. It encourages first-time buyers to come back — you should not settle for one-time purchases only.

Amazon sellers to ditch mylar stash bags

Image Credits: Innovative Sourcing

In their recent announcement, Amazon is giving their sellers until August 5 to eliminate all single-colored and opaque Mylar bags.

Mylar bags are included in the compliance checklist for drug and controlled substances associated products posted by Amazon’s drugs and drug paraphernalia help page. The page states, “Products must not be primarily used for making, preparing, or using a controlled substance.”

According to the users of this container, Mylar bags are one of the best ways to store and conceal illegal drugs due to their smell-proof nature. 

Amazon’s advice for sellers: “If you use Fulfillment by Amazon (FBA) and have any remaining inventory of Mylar bags that are not clear or single-colored in Amazon fulfillment centers on or after August 5, 2022, these ASINs will be removed from the Amazon store. You must initiate a removal request within 30 days of receiving this notice to have your inventory sent to a location of your choice.”

Takeaway: Amazon Sellers, to know more about this new regulation you can see the full announcement on Amazon Seller Central.

In case you missed it:

Have a great weekend!

-Gary

80/20 Of Ecommerce – July 1, 2022

Amazon Prime Day is losing its sizzle

Image Credits: KSL NewsRadio

Is Amazon Prime Day really losing its hype? As of now, Amazon has not revealed specific details about their Prime Day Amazon sales performance, but according to Insider Intelligence, it is anticipated to increase by 17% YoY to $7.8B.

According to the Wall Street Journal, Amazon Prime Day’s blockbuster is not the same as before. Prime Day’s sales growth is declining as Amazon no longer invests in exclusive product launches and partners with celebrities to host the Prime Day concert. 

However, the truth behind the success of this year’s Prime Day is still unknown. While many speculations say that the event is losing its fire, Amazon discussed with WSJ that it is still a success.

Takeaway: Is Prime Day 2022 a flop? If yes, then the slowed increase in sales for the shopping event may be due to the current problems that retailers face: high inflation, changing consumer patterns, and cost reductions.

Second Prime Day is coming

Image Credits: Envision Horizons

The CNCB announced on their latest news article that the 2nd Prime Day will be on the 4th quarter of this year. Many sellers think the reason for this event is for Amazon to recreate its success during the October Prime Day in 2020.

If you try to take a look at the lightning deals present at the top most of your account, you will notice a blurb indicating to submit the second Fall Prime Day. Amazon’s deadline for deals submission is on July 22nd.

On one hand, sellers and third-party merchants are starting to grow their frustrations due to lack of information. The short notice on the submission of lightning deals even disappoint them.

Takeaway: The event is rumored to happened second week of October. Sellers and merchants have a lot of preparations to do in the two remaining quarters of the year. They should ensure that they have enough inventory, revamped product listings, create competitive deals, and drive traffic not only for the Prime Day 2.0 but also for the subsequent events such as the Black Friday and Cyber Monday.

Sponsored Display product targeting has evolved 

Example of where a Sponsored Display ad placement may be displayed off Amazon Image Credits: Amazon

Amazon will replace the product targeting used in Sponsored Display with contextual targeting. This will enable advertisers to reach more customers both within and outside of the Amazon shop.

There is no need to change anything. Advertisers do not need to alter the items or categories they are targeting to use the new functionality. Sponsored Display will locate the best possibilities to extend advertising reach to websites and mobile apps in addition to stores.

Previously, these campaigns would only appear on the Amazon store’s product pages. Now, Amazon’s machine learning will help their registered sellers drive additional reach and opportunity beyond Amazon while still observing the bidding strategies and objectives.

Takeaway: This change is important for sellers and merchants. It aims to help them reach their audience even more as well as drive awareness regarding their product offering.

[Video Replay] How to Avoid the 3 Common Pitfalls When Selling your Business

The summer of 2021 was the pinnacle of the marketplace before it slowed down. Does this mean the end of selling your Amazon FBA business?

If you are one of the many eCommerce owners who want to sell their businesses today to scale and achieve financial goals, then you should know the right strategies to market your business at a top dollar. We recommend you watch this highly valuable live training about “The 3 Pitfalls you should Avoid When Selling Your Business” Chris Wozniak from Quiet Light gave to our audience

In this 60 min live training, Chris Wozniak, a Certified Mergers & Acquisitions Professional at Quiet Light will walk you through strategies to maximize your exit and learn about:

[2:50] Summer of 2021 was the pinnacle of the marketplace before it slowed down

[3:20] Sellers still want to sell and buyers still want to buy even if we go into recessionary period

[4:35] Businesses netting at $500,000 SDE (seller’s discretionary earnings) and with positive trends can still get a good multiple at 3.5-4x

[07:30] Different levels of addbacks (from health insurance, payroll taxes, to other variables)

[9:35] Raising prices for 3 months without change can retroactively add back to your business

[11:00] The steps you take before you sell

[12:07] Forecast the next 2 to 3 years and firm up tax returns if you desire to sell

[15:40] Why you shouldn’t run your business like you’re going to sell and what you should do [19:20] Pretend like you’re not selling and focus on maintenance, growth, and critical timing

make sure you’re irreplaceable

[24:30] Is it still important to have VA’s running everything or can the business be bought with me running things and I stay on getting a percentage?

[24:45] When buyers get online businesses they are attracted to far less hours owner works weekly

[28:00] Buyers must trust their advisors because they have the responsibility to represent you

[29:10] Advisors have the qualifications, experience, and capacity to represent both buyers and sellers

[39:33] What % profit margin should be my target to sell my business at a decent price? It is currently only around 10% and I would like to get an idea how far off the mark I am for selling.

[40:00] Rule of thumb: The higher your margin, the higher your valuation

[49:10] What is the most important step to sell my business on Amazon FBM?

[49:39] Doing self fulfilling business becomes less attractive to more buyers – having a good 3PL to use that’s cost-efficient can help

[53:30] Learn more about how you can sell your business and its valuation here: https://quietlight.com/advisors/chris-wozniak/

Watch the full replay here.

If you’d like to learn more about what your business valuation could be and what steps to take to prepare for an edit (even if you’re not ready right now) I recommend you book a call with Chris. https://quietlight.com/advisors/chris-wozniak/

Watch my session at SellerFest Online to learn about the Amazon Sourcing Algorithm

Earlier this week, I took part at the Seller Fest Online organized by Orange Klik where I talked about sourcing for Amazon from different destinations and what are the things to know when it comes to sourcing from a specific country. You can watch the replay here.

Seller Fest Online, featuring 30+ Amazon experts, runs until Friday (July 1st) and you can still make it to the rest of the sessions. Learn more about the upcoming live sessions here and get your free access now!” 

7 Figure Seller Summit 7 Aug 22-26, 2022 – Call for Sponsorship 

We are excited to plan the 7 Figure Seller Summit this August, and there are a few sponsorship opportunities that some of you may be interested in.

If you’re purely a seller not interested in sponsoring, pls disregard this email. If you missed the last 7 Figure Seller Summit, the good news is you can get a free pass for a limited time here

If you are interested in sponsoring, or if you know someone who is interested – please fill out this form to learn more: https://bit.ly/3I4SE8Z 

Thanks!

In case you missed it:

Have a great weekend!

-Gary

80/20 Of Ecommerce – June 17, 2022

US Import Volume from China “Drop off a Cliff”

  • US Import demand dropping dramatically 36% YOY… Why?
    • Inventory glut – excess inventory
    • Inflation crunching US consumer purchasing
    • Container volumes from CN to US continue to decline 

Image Credits: FreightWaves

According to FreightWaves, Inc, U.S import demand is dropping dramatically by 36% year on year from June 2022 from 2021 to 2022. This decrease happens due to some leading causes; the first is inventory collide. These retailers have excess inventory. Second, consumers are getting crunched due to inflation. Thirdly, this is causing container volumes from China to drop as well.

So, you see fewer imports into the U.S. The good thing is that this is benefiting the shipping price and that the shipping prices are starting to go down; the Freightos index is around $9,000 per container. However, this may be a sign that the economy is slowing down.

Amazon Prime Day 2022 Dates Announced

Image Credit: About Amazon

Amazon has already released dates for their Amazon Prime Day 2022. This will be a two-day savings event starting July 12 at 3 a.m. EDT until July 13, 2022. Prime Day is launched for Prime members in countries like Austria, Australia, Belgium, Brazil, Canada, China, France, Germany, Italy, Japan, Luxembourg, Mexico, the Netherlands, Portugal, Singapore, Spain, the U.K., the U.S., and for the first time in Poland and Sweden. 

Early bargains begin on June 21, with up to 50% off particular Amazon gadgets, up to 50% off Fire TV, and more from popular brands like De’Longhi, Dove, and SodaStream. From June 21 to July 11, Prime members may win large prizes by supporting local companies.

The new Small Business Badge allows Prime members to find and browse products from small business companies in Amazon’s marketplace. Members will be able to recognize products from small company brands and artisans with the help of this new badge.

Amazon’s global transportation network will offer fast and free delivery of Prime Day orders. 

Takeaway: Prime Day is less than a month away so make sure that you have enough inventory in-stock in your Amazon Fulfillment Centers. Also, do not forget to prepare your marketing campaigns.

Amazon drones are starting to fly for deliveries in California

Image credit: Amazon

Amazon plans to launch its drone delivery later this year in Lockeford, California. Residents will have access to sign up for a free “Prime Air” delivery. 

These drones have the capacity to carry parcels weighing 5 pounds. Air eligible items include beauty, office supplies, tech gear, and household products. 

Amazon claims to have developed a sophisticated technology that allows its drones to recognize and avoid obstacles such as airplanes, people, pets, and other people. According to them, they created their sense-and-avoid system for two critical scenarios: safety in transit and safety approaching the ground.

The drone service will be expanded based on feedback from the California operations.

Takeaway: Amazon’s retail rival Walmart and other major tech firms are already incorporating drone delivery into their logistic operations. Amazon needs to keep up with the competition as the mode of delivery is ramping up Walmart’s delivery service.

Amazon Brand Analytics Removes Features

Image Credits: Tamebay

Brand Analytics is a feature that gives Brand Owners vital information to help them make informed, strategic decisions regarding their product portfolio and marketing/advertising efforts.

Amazon Seller Central said in their news piece that brand analytics is removing two features: item comparison and alternative behavior dashboard. This implementation is effective on June 30th, Thursday. 

According to Amazon, seller feedback and usage data indicated that the dashboards were not as helpful as they thought. As a result, the retail giant has decided to eliminate the said dashboards and brainstorm on the new features in 2023.

Takeaway:  According to seller feedback and usage volume data, these dashboards don’t always provide impactful and actionable insights, so Amazon is looking into adding deeper customer behavior analytics in 2023. It’s reassuring that they’re still working to improve the Amazon Brand Analytics insights they provide.

Join us for a live [Sourcing Masterclass] Negotiating Your Way to Success When Sourcing From India on Wednesday, June 22nd, 2022 at 8 PM EST 

After the 7 Figure Sourcing Summit, I’d like to spotlight India which is the fastest sourcing alternative to China. I’ve invited India Sourcing experts, Meghla Bhardwaj and Margaret Jolly of India Sourcing Network to walk us through negotiating your way to success when sourcing from India. 

In this 60 min live Masterclass, Margaret Jolly and Meghla Bhardwaj, Co-Founders of India Sourcing Network will share strategies for negotiating with Indian manufacturers to learn:

  • Proven negotiation strategies to get you the best price 
  • When to start negotiating 
  • What to negotiate apart from price 
  • Cultural sensitivities when negotiating so you don’t offend them
  • Common mistakes to avoid that could cost you time and money

Join us live on Wednesday, June 22nd, 2022 at 8 PM EST 

Excited to know how to source from India and scale your business? RSVP and submit your questions to Meghla and Marg here.

See you inside!

[REPLAY] Sourcing Experts from China, India, Mexico, Vietnam, Europe, and the US discussed how to source from their countries

Earlier this week, we had two live panels with a dozen sourcing experts to share with you valuable insights and I’d like to share the replay with you in case you missed it live. 

Watch the replay to get all of your sourcing and supply chain questions answered such as:

– Can I source my product from X country?

– How can I find a trustworthy supplier from X country?

– Will it be cheaper than China? 

– What scams will I need to watch out for?

– The #1 negotiation tip that will save you tens of thousands of dollars

– What’s the best online platform you use to source and why? Alibaba vs Global Sources 

– Certification and Testing – this is causing suspensions – what needs to be done? 

– How to differentiate your product even if you don’t have any design skills

– And much more.

In session 1 we covered Sourcing in a Post-Pandemic World. I invited six sourcing experts from China, India, Mexico, Vietnam, Europe and in the US to deep dive into the topic.

Watch the replay here: [Sourcing Masterclass] Sourcing in a Post-Pandemic World

On day two, we had an Advanced Shipping, Quality Control, Negotiations, Product Design, and Advanced Supply Chain strategies on a live Panel as well. So, make sure to check this one out to get the right strategies in your next shipping transaction. 

Watch the replay here: [Sourcing Masterclass] Shipping, Quality Control, Negotiations, Product Design, and Advanced Supply Chain strategies

Watch the replay now and get your sourcing questions answered by the top sourcing experts in the industry.

Day 1 – [Sourcing Masterclass] Sourcing in a Post-Pandemic World

Day 2 – [Sourcing Masterclass] Shipping, Quality Control, Negotiations, Product Design, and Advanced Supply Chain strategies

In case you missed it:

Have a great weekend!

-Gary

80/20 Of Ecommerce – June 3, 2022

China Sourcing Updates

Update 6/3/22

As of Wed. June 1st, 2022 Shanghai has lifted the COVID lockdown according to Reuters.  

Source: Reuters/Aly Song

While the people are starting to resume a normal life and offices are now open, in terms of the supply chain it can be best summed up as “Everything is happening at once” according to Jarrod Ward, a supply chain executive from Yusen Logistics based in Shanghai. 

Further reports from supply chain professionals say that “I think the best way to describe it is that the firehose has been turned on full but the water is being forced through a sieve.  There’s massive back pressure and splatter as everyone is trying to figure out how to make things work while complying with the new reg(ulations).” 

Takeaway: While this is great news it may be a bumpy ride ahead in the near future as the supply chain tries to get back on track.  

The Sourcing Shift Away from China? 

As of mid-2022 China is no longer the only sourcing game in town. 

We have seen a shift away from China in the last 3 years as other sourcing destinations are gaining a share of the sourcing market.  

According to a survey of US and European businesses by QIMA, the top sourcing destination has shifted away from China.  In 2019 China represented 61% but it fell by 14% to 47% in Q1 2022.

Similarly, India’s sourcing market share has risen dramatically from 6% to 10% in the past 3 years.  

The takeaway is we are seeing a shift in the sourcing and supply chain base towards countries like India and Vietnam.  

Another key trend is “Nearshoring” as buyers are shifting their sourcing to nearby destinations such as Mexico for US buyers and Europe for buyers in the EU.  The thinking is that this close proximity will reduce shipping costs, lead times, and lower duties and tariffs. 

A key point to consider is that while buyers are shifting sourcing, they are not completely moving out of China because China is “too big to ignore”.  

No other single country can replace China.  In fact, the big players such as Apple and Nike have been adopting a China +n strategy.  They are outsourcing some products to other countries while keeping the non-movable production in China.  They have been doing this China +n for years.  Shouldn’t you? 

Good news – you probably don’t have a sourcing or supply chain department in your business so I’ve done the work for you.  

Introducing the 7 Figure Sourcing Summit (June 13th – 14th, 2022)

I’m super excited to announce the 7 Figure Sourcing Summit – The A to Z resource for all your Sourcing and Shipping Needs launching online June 13-14, 2022. 

It’s like the 80/20 of sourcing from around the world. 

You won’t find a resource like this anywhere else and you will learn sourcing strategies directly from 7 to 8 Figure Ecommerce sellers and sourcing experts.  

You can get your free pass right now at http://7figuresourcingsummit.com/ 

See you inside!

Amazon Ad’s Prime Day Summit is just around the corner

Image Credits: Amazon.com

Prime Day has signified a peak period for Amazon Sellers. This event also ensures that merchants reach out to customers, increase sales, and simultaneously build their own and Amazon’s businesses.

Amazon has established the Amazon Prime Day Summit. It will be held on June 7th and 8th, from 9:00 a.m. to 12:00 p.m. Pacific Time.

The first step is to create an account on your Seller Central dashboard. This can also help you create or improve a Peak Advertising Campaign and create powerful product description pages. It’s even better if you use the sessions to assist you set up and monitoring practices for your firm’s advertising side.

The summit will also give sellers an overview of numerous reports and a more excellent grasp of applying what they’ve learned to achieve success. There will also be live Q&A sessions to address vendor problems and questions.

Takeaway:

Constant learning is an essential variable to the growth of your business. Stay relevant and innovate, especially in implementing strategies to keep up with the competition. Events similar to this Prime Day Summit can help.

Remote Fulfillment with FBA adjusts its fees

Image Credits: eCOMMERCE BYTES

Businesses that participate in FBA in the United States have been permitted to employ remote fulfillment with FBA since 2018. This is to make their merchandise in the United States available for purchase in Canada and Mexico. Customers have benefited from the program since it has expanded their options and made it easier to sell outside of the United States.

Amazon’s Remote Fulfillment with FBA takes advantage of domestic and foreign marketplaces. Amazon has made considerable efforts to assist its sellers better, nearly doubling the number of fulfillment facilities available. Over 750,000 full-time and part-time jobs were also added. All of this comes with an increasing hourly salary, ranging from $15 to $18.

However, beginning June 30, Amazon will adjust remote fulfillment fees with FBA fulfillment fees. These increases are believed to be comparable to or less than the industry average for fulfillment services. To better comply with the conventional FBA rate structure, they will also incorporate a dimensional weight adjustment in their rate calculation.

Takeaway:

This initiative helped retailers to expand their business. However, we need to go to 2022 remote fulfillment with FBA fee changes to study how the shifting prices of fulfillment, shipping, storage, and customer support can influence our business.

[Video Replay] The Sourcing Algorithm Live Webinar

Did you know that Sourcing can make or break your business?

Gary Huang, founder of the 7 Figure Sourcing Summit and 80/20 Sourcing just provided a valuable discussion 

 In this masterclass, Gary shared the landscape of the supply chain around the world, what are the major changes that you have to know in 2022 and the 80/20 of the different areas of the world you can source from.

In this 60-minute live webinar, you’ll learn:

[2:48] Which of the countries most of you are interested to source from?

[3:20] Where most of you are currently sourcing from?

[4:09] Sourcing is Changing

[6:26] China – Sourcing King

[9:40] Q&A: What platforms should we use for sourcing apart from Alibaba

[11:08] India – Rising Star

[15:32] Mexico – Pura Vida

[19:44] The 9-9-6 work culture in China

[21:00] Vietnam – Big Players

[25:41] Q&A: How to get connected online with Vietnam sellers?

[27:34] USA – The American Dream?

[31:09] Q&A: What is the best country to source for Amazon Middle East and Australia?

[32:05] Sourcing Countries At A Glance

[32:45] Type of products you can get from different countries

[40:05] The 7 Figure Sourcing Summit – The A to Z resource for all your Sourcing and Shipping Needs

Watch the full replay here

In case you missed it:

Have a great weekend!

-Gary

80/20 Of Ecommerce – May 27, 2022

China Sourcing Updates

What we know

  • Port congestion in Shanghai could lead to airfreight congestion
  • Shanghai aims to lower down restrictions on June 1
  • Beijing authorities are strictly monitoring business ad residents

Image credits: Pexels

According to South China Morning Post, Shanghai aims to lower down restrictions on June 1. However, the production backlogs could lead to airfreight congestion in the coming weeks as they decide to loosen the pandemic restrictions. Despite this, the vast majority of shops, restaurants, and enterprises remain closed, and a work-from-home policy remains in effect.

Beijing on the other hand is still the Covid-19 hit capital of the country. As a result, they continue to tighten their zero-CoVid approach imposing consequences and punishments on businesses and residents that will not follow the mandate, Rappler Asia Pacific reported on Wednesday.

Despite the damage it has caused to the world’s second-largest economy and global supply networks, the government continues to focus on the zero-COVID policy. After a series of incidents involving a private logistics company within its control, certain employees of the state-run Beijing postal service were either fired or given a strong warning.

A few employees at a Beijing branch of the state railway corporation disguised their trip history and have been placed under police investigation.

According to the Shanghai local statistics bureau, exports from Shanghai, the world’s biggest container port, tumbled 44% year on year last month, while imports fell 33%, the steepest decrease since at least 2011.

E-commerce retail Q1 2022 report: a blip in the radar?

Image credits: Pexels

According to data provided by the US Department of Commerce on Thursday, US retail e-commerce sales in Q1 2022 totaled roughly $250 billion, up only 2.4 percent from the previous quarter.

According to the DOC, seasonal fluctuations were considered, but not price hikes. When you factor in inflation, the 2.4 percent increase in sales effectively flattens the e-commerce growth curve, which has been sagging since the third quarter of 2021, when e-commerce retail sales fell -0.7 percent from the previous quarter.

Overall retail sales in the United States were predicted to be $1.75 trillion in Q1 2022, up 3.7 percent from Q4 2021. Total retail sales grew 10.5 percent year over year in the first quarter.

As the Covid-19 lockdowns loosen, more customers are opting for brick-and-mortar retail. The e-commerce giant retailers are not an exception to the downward slope in the e-commerce growth curve during the onset of the pandemic. Amazon lost over $4 billion in the first quarter, its first quarterly shortfall since 2015.

Yet, this does not hamper the e-commerce sector from pooling the considerable market share gains. The annual e-commerce sales approach $1T, a double of the past three year’s sales. 

While YOY comparisons of e-commerce retail sales show a strong, mature online sector—DOC reported a 6.6 percent YOY increase in e-commerce retail sales in Q1 2022—the YOY growth rate in 1Q 2021 was an exponential 47 percent.

According to Prologis, e-commerce share will climb more exceeding its pre-pandemic trajectory. This is because of improved online sales technologies and same-day and next-day delivery strategies.

Takeaway: 

This report has two separate trajectories for ecommerce. Is a sign that e-commerce is slowing down or maybe it is just a bullish outlook? Do we really feel the slope going downwards, or this is just a blip in the radar?

Amazon Reportedly Ready to Dump Excess Warehouse Space

Image credits: Pexels

Amazon plans to lease some of its warehouse space to reduce excess capacity. The retail giant acknowledged it overbuilt its warehouses as it sought to meet pandemic demand. The company is finding ways to sublease the surplus of space estimated to be more than 10 million square feet. 

Amazon leased over 100 million square feet and owned 4.4 million square feet of fulfillment, data center, and other categories in North America at the end of 2019.

Depending on the market, other types of space are still being acquired by Amazon, such as Southern California office space, where it recently secured leases for a total of 439,500 square feet in Santa Monica, Irvine, and San Diego.

This big move from Amazon follows the first quarterly loss they incurred in April in which demand declined and affected the company’s warehouse operations. 

Takeaway:

Amazon sees a slowdown in their sales and is subleasing excess warehouse space and it could be a benefit to sellers in fewer inventory restrictions

Join me for a Live Training on Tuesday May 31, 2022 at 8PM Eastern Time about The Sourcing Algorithm

I’ve interviewed over 170 7-figure and 8-figure ecommerce experts and sellers. They said the ONE thing you need to get right is to choose a five-star profitable product.

After product selection, sourcing is the most important part of your ecommerce business. Because if you get it wrong, it can become a huge bottleneck and will bring forth bigger problems in the long run. 

Sourcing products for your eCommerce business is no longer a one-trick pony.

Previously everyone considered China as the first and often ONLY place to source and manufacture products for their ecom and FBA business.

Nowadays with the uncertainties with COVID and lockdowns continuing in China, many people are considering alternatives like India, Mexico, Vietnam, and even the US.  

If you want to source well, there’s a lot that you need to know.

But the ultimate resource you need to learn all of this from doesn’t exist yet. So, I decided to create one based on my over a decade of experience in sourcing and supply chains.

I’ve visited hundreds of factories on the ground in China, partnered with dozens of suppliers, and overseen millions of dollars of purchase orders with suppliers. In addition, I have an extensive network of sourcing and logistics contacts in India, Vietnam, and Mexico.

I’ve created The Sourcing Algorithm – the ultimate resource you need to start sourcing from China, Mexico, Vietnam, India, and the US. 

Join me as I will share this Sourcing Algorithm on a live webinar, Tuesday, May 31, 2022, at 8PM Eastern Time. 

Reserve your spot and send in your questions here: https://forms.gle/7FbSahBQaLXV619t8 

See you inside!

Get your Free Pass to 7FSS6 Evergreen now!

Registration is now open for the 7 Figure Seller Summit 6 Evergreen! Get ready to discover how 7 and 8 Figure Sellers think, overcome challenges, and strategize ahead of the e-commerce game. 

If you missed it the first time, good news! Due to popular demand, we have made 7FSS6 Evergreen. That means you can get a free pass to watch for a limited time right now!

You will learn how to do the following:

  • Develop the MINDSET of a million-dollar business owner and FUNDAMENTALS of creating a 7 Figure eCommerce business
  • Master MARKETING and Building a BRAND and Optimizing PPC to drive external traffic to your listings, build an audience that you can launch to, and rank your products with,
  • Implement strategies to SCALE your e-commerce business, so you’re working ON your business and not IN your business
  • Increase your PROFITABILITY, know your numbers, and cut expenses, so you keep more money in your pocket…
  • EXITS – How to build a business that will be attractive to buyers so you can SELL it

We’re excited to have over 30 outstanding entrepreneurs and experts speaking at this eCommerce online event. Enjoy over 30 hours of masterclasses and expert training! You will have 24 hours to view each session for FREE!

However, we believe that every individual, especially business owners, has a timeline and learning curve. 

Learn more about this 7FSS event and grab your free pass now!

In case you missed it:

Have a great weekend!

-Gary

80/20 Of Ecommerce – May 20, 2022

China Sourcing Updates

What we know

  • Shanghai continues to be in lockdowns for over 6 weeks now
  • Tesla nearly stops production at its Shanghai plant due to a lack of component supplies A lot of companies experienced plunging sales this Q1
  • We are unsure when China can lift the lockdowns

As Shanghai enters its 6th week of lockdowns with no end in sight, the impact on the supply chain has already reached the global scale. Companies all over the world have felt the disruption. 

Automakers, fashion houses, breweries, tech firms, and other 180 companies considered China’s lockdowns key variables affecting their Q1 earnings. 

In fact, even Tesla has been forced to slow production nearly to a stop at its Shanghai plant this week because of a lack of subcomponent availability due to the Covid lockdowns according to a Reuters report.  

We will keep our eye on this as the uncertainty continues. 

Shopify is buying their way into the 2-day shipping game

Image Credits: Shopify News

Shopify recently bought the logistics company Deliverr for $2.1 billion dollars. This move is the largest acquisition Shopify has made in its history. 

The Shopify Fulfillment Network (SFN) and Deliverr have teamed together to simplify supply chains for merchants of all sizes, both on and off Shopify, democratizing access to end-to-end logistics for independent companies.

The company plans to combine Deliverr with its existing fulfillment network. They will also leverage this action to power their Shop Promise guarantee. It is a new service that aims to provide customers with a two-day or next-day delivery. 

Shopify seems to have taken this step to compete with Amazon’s Buy with Prime initiative to cater to third-party merchants searching for a faster and more reliable shipping solution.

Takeaway: 

The Ecommerce war between Amazon and Shopify is intensifying as Shopify is buying its way into the 2-day shipping game to compete against Amazon Prime. 

Walmart’s e-commerce sales were flat in the most recent earning report

Walmart recently released its earnings report on Tuesday. The numbers fell far short of Wall Street projections as rising gasoline prices and greater inventory levels pressure the nation’s largest retailer.

Specifically, according to CNBC, their e-commerce sales increased by only 1% since last year, and 38% based on two-year progress. 

Takeaway:

Is this flatness in e-commerce a temporary blip on the radar from Walmart or a sign of more significant slowdowns ahead?  

[Video Replay] Amazon Business Optimization – Learn How To Scale And Grow The 5 Main Business Functions

Did you know that Optimization can help scale your Amazon business exponentially?

Yoni Mazor from GETIDA just provided a valuable discussion on Amazon Business Optimization – how you can scale and grow your Amazon business with the right optimization strategies. In this masterclass, Yoni shares how you can start to scale your business by optimizing your 5 Main Business Functions.

You’ll learn:

[2:40] Who’s this session for today and why should they watch?
[8:08] Optimization Overview

[8:44] Optimizing the Accounting side of your business

[11:56] Know your profit and loss so you can react in real-time

[16:18] Human Resources – Platforms where you can hire and outsource your operations

[21:30] Hire and invest in people who are smarter than you

[24:50] Logistics – Best practices and platforms to optimize your logistics

[26:51] Air shipping “First Choice Shipping” – Get your products more quickly

[29:26] Shipstation – streamline orders from e-commerce marketplaces across the board

[31:00] Expand your Product Distribution at any given time

[36:05] “I have a manufacturer that I love, how do I know if I’m saving money?” 

[36:50] Operations – Platforms that will help you optimize operations
[37:55] Spott – Insurance policies for selling on Amazon
[41:45] Textme app – get a virtual biz phone number for calls and texting

[49:39] Tools you should consider to scale your business

[52:55] GIMP – like free Photoshop
[58:07] Scaling on amazon is a game of tools

[58:30] Full Amazon Scaling Blueprint List

[59:01] Auditing – The Rules of the Game

[59:47] Why do you need help auditing FBA – Case Study: A Seller that got a 7X multiple during an Exit

Watch the full replay here.

Join the Orange Klik x Dragonflip Barcamp on June 9 -10

Next month, in Portugal, there will be an in-person international Amazon Barcamp event called Orange Klik Barcamp. This could be a good opportunity for you if you are selling over Amazon and you want to network with and surround yourself with like-minded e-commerce sellers in Europe.

This English-speaking Amazon FBA seller is coming up on June 9-10th in Lisbon, Portugal! 🇵🇹 

Organized by Orange Klik and Dragonflip, this Barcamp event will bring together hundreds of like-minded attendees whom you’ll have the chance to network with, address your e-commerce problems, and pitch ideas to fellow sellers.

By attending this “unconference” type of event, you will have a chance to:

✅  Learn from 100+ international sellers in one place

✅  Get only attendee-generated content that solves your biggest issues

✅  Choose the content that you want to learn about the most

✅  Discuss only the most important and hottest topics to help you grow your FBA business

✅  Network, meet new friends and business partners

👉 Limited tickets are available now. First come, first served. https://orangeklik.com/barcamp/ 

Orange Klik will offer a 50€ discount when you register through this link and use my code: 7FSS

Note to be transparent – I’m an affiliate of Orange Klik and I believe that this is going to be a great event.  If you do purchase a ticket I will receive a small commission to help us keep creating the best award-winning content to help you grow your e-commerce business.  And it helps pay for my coffee!  Thanks!

Get your Free Pass to 7FSS6 Evergreen now!

Registration is now open for the 7 Figure Seller Summit 6 Evergreen! Get ready to discover how 7 and 8 Figure Sellers think, overcome challenges, and strategize ahead of the e-commerce game. 

If you missed it the first time, good news! Due to popular demand, we have made 7FSS6 Evergreen. That means you can get a free pass to watch for a limited time right now!

You will learn how to do the following:

  • Develop the MINDSET of a million-dollar business owner and FUNDAMENTALS of creating a 7 Figure eCommerce business
  • Master MARKETING and Building a BRAND and Optimizing PPC to drive external traffic to your listings, build an audience that you can launch to, and rank your products with,
  • Implement strategies to SCALE your e-commerce business, so you’re working ON your business and not IN your business
  • Increase your PROFITABILITY, know your numbers, and cut expenses, so you keep more money in your pocket…
  • EXITS – How to build a business that will be attractive to buyers so you can SELL it

We’re excited to have over 30 outstanding entrepreneurs and experts speaking at this eCommerce online event. Enjoy over 30 hours of masterclasses and expert training! You will have 24 hours to view each session for FREE!

However, we believe that every individual, especially business owners, has a timeline and learning curve. 

Learn more about this 7FSS event and grab your free pass now!

In case you missed it:

Have a great weekend!

-Gary

80/20 Of Ecommerce – May 13, 2022

China Sourcing Updates

What we know

  • China disruption continues to hurt the international supply chain
  • International companies are having hard time restarting operations
  • It is difficult to predict when will this dilemma come to end

Image Credits: Pixabay

As a world manufacturer, China’s disruptions are impacting the global economy and adding another danger to the inflation picture. The government attempts to restore production in Shanghai, where most of the populace has been under lockdown for five weeks. 

However, many international companies claim they are still unable to begin operations. China’s inflation report will be scrutinized as food and other product shortages, exacerbated by lockdowns, drive up prices. Consumer price rise is expected to go up, but factory-gate inflation is expected to stay high. 

On the global scale, businesses like Tesla Inc. and Apple Inc. are still experiencing disruptions in their supply chain. “Global port congestion is intensifying and spreading, according to RBC’s Head of Digital Intelligence Strategy, Michael Tran, and colleague, Jack Evans,  admitting it was difficult to predict when things would ease.

Takeaway:

As Amazon sellers, we must be aware that some macro concerns like this may impact our companies. During these times, we must be hands-on with our business. We can only plan, plot, and design strategies to decrease the impact because we are the ones who are experiencing it.

Two Amazon employees tied to Staten Island Union Effort dismissed by Amazon

Image Credits: Amine M’Siouri from Pexels

Amazon fired two employees who are members of an organizing effort at a Staten Island warehouse. This warehouse is where the workers voted to participate in a union last month. The said employees are Mat Cusick and Tristan Dutchin.

Both of them worked in a new organization founded by current and former Amazon employees, the Amazon Labor Union, to organize workers at its Staten Island warehouses. Amazon informed Dutchin that he had fallen short of the company’s productivity targets, which call for staff to choose hundreds of shipments every hour. Thus, they fired him last Saturday after his shift despite his manager’s recent compliment on his improved performance.

On the other hand, Cusick was dismissed last week after using “Covid care leave,” which lets staff care for sick family members with Covid-19. On May 4, Cusick received a letter from Amazon stating he was fired due to job abandonment. The HR department approved his leave until April 29, for the record.

Takeaway:

It’s certainly unethical and against the law to dismiss union organizers, but the consequences are so minor that they may pay off for the company. It’s also challenging to prove that a person was rejected for union participation rather than not showing up on time or failing to execute their job efficiently.

2022 Ecommerce Fulfillment Trends that Every Seller Should Know

Image Credits: Stock

According to a WD Partners poll, e-commerce is now the preferred mode of purchasing for 68 percent of customers, up 52 percent in 2020. By 2024, e-commerce sales will account for 20% of overall retail sales.

There’s no disputing that online shopping will continue to grow. However, there are still a lot of e-commerce aspects that need improvement. Most of the issues were exposed due to the Covid-19 pandemic.

The first one on the list is shipping. With the rise of e-commerce, order volumes, rising rates, and capacity congruently balloon. The most prevalent fulfillment issues were delivery expectations (45 percent) and transportation capacity (36 percent).

Additionally, labor shortages also became a problem that affected the operations in fulfillment centers. Warehouse space also had low vacancies. Inventory management has become one of the top issues of companies. Technology limitations were also brought to the table.

Despite these challenges, specific preventive and strategic solutions are implemented to offer flexibility, scalability, and multiple fulfillment sources. Companies are starting to attract workers, increase demand for space, make technological investments, and enhance inventory management practices.

Takeaway:

As e-commerce is starting to establish its roots in the business industry, it is customary to see specific issues. However, as an Amazon Seller, you need to continuously innovate and keep up with the times, especially technology and various managerial practices, to cope with challenges in the area.

Changes to the Buyer-Initiated Order Cancellation Process

Image Credits: iStock

The response from Seller Central has been received. Many sellers expressed a need for a better way to manage buyer cancellation requests without searching the buyer central messaging platform for them. They can quickly go overlooked when several at once, resulting in product returns and refunds.

Since May 10, 2022, this has been in effect. If you utilize seller central, notifications and cancellations that were previously communicated via buyer-seller communications are now displayed on the manage orders page for each buyer-initiated cancellation.

If you use order reports to process orders, you can enable the buyer requested cancel field to see cancellation requests in your order reports. As for the changes, if you use APIs, you can view the buyer cancellation request through your own systems by using the list order items API.

Once you import, you can continue to cancel orders through API feeds on seller central or with a file upload. You will still continue to receive email notifications for all buyer-initiated order cancellation requests.

Join us for a Live Training on Thursday, May 19, 2022 at 8PM Eastern Time with Yoni Mazor of GETIDA

Founder of JC Penney and renowned businessman James Cash Penney once said, “Growth is never by mere chance; it is the result of forces working together.”

Scaling your business is not an overnight thing that you can sleep on and magically wake up to a 7 Figure business. To grow your business you have to get the right balance between calculated strategies and pure hard work. There are no shortcuts in scaling!

However, you can always optimize your business operations to make the scaling easier and more achievable. With proven and tested strategies, Yoni Mazor of GETIDA will help us learn all of these in a live training.

You’ll learn:

  • How to optimize your  Amazon Accounting, HR, logistics, operations, and tools.
  • A detailed plan on how you can scale your amazon business
  • Real Case Study of how a seller grew a 7x multiple during an exit
  • The rules of the game in Auditing

Join us live on Thursday, 19th May at 8PM ET for a live training on Amazon Business Optimization – How Sellers Can Learn To Scale And Grow their 5 Main Business Functions.

RSVP here and send in your questions for Yoni:

See you inside!

PPC Mastery Summit on May 17-19, 2022

Paid advertising is one of the absolute best ways to grow your business and increase

your sales… if done right. If not done well, it can be a drain on your business.

Let’s face it, advertising is only getting more competitive as costs continue to rise. That

is why it is so important to will learn actionable, proven strategies and tactics of how you

can more effectively grow your sales on and off Amazon (at lower costs).

That is why I am excited to invite you at the upcoming PPC Mastery Summit, May 17-19,

2022 put on by Maximizing Ecommerce.

With over 20 amazing and caliber speakers who are going to cover a wide range of topics on paid advertising (on and off Amazon), you would need to fly to a conference, stay in a

hotel, and pay for overpriced hotel meals.

For about the cost of a fancy drink at Starbucks, you can grab a ticket to walk away with

actionable strategies and tactics you can implement to increase your sales, decrease

your ad costs, and ultimately keep more money in your pocket (aka higher profits).

If you are serious about running more profitable campaigns, I highly recommend you

click here to grab your ticket to the summit. 

Are you ready to take your PPC ads to the next level?

Get your Free Pass to 7FSS6 Evergreen now!

Registration is now open for the 7 Figure Seller Summit 6 Evergreen! Get ready to discover how 7 and 8 Figure Sellers think, overcome challenges, and strategize ahead of the e-commerce game. 

If you missed it the first time, good news! Due to popular demand, we have made 7FSS6 Evergreen. That means you can get a free pass to watch for a limited time right now!

You will learn how to do the following:

  • Develop the MINDSET of a million-dollar business owner and FUNDAMENTALS of creating a 7 Figure eCommerce business
  • Master MARKETING and Building a BRAND and Optimizing PPC to drive external traffic to your listings, build an audience that you can launch to, and rank your products with,
  • Implement strategies to SCALE your e-commerce business, so you’re working ON your business and not IN your business
  • Increase your PROFITABILITY, know your numbers, and cut expenses, so you keep more money in your pocket…
  • EXITS – How to build a business that will be attractive to buyers so you can SELL it

We’re excited to have over 30 outstanding entrepreneurs and experts speaking at this eCommerce online event. Enjoy over 30 hours of masterclasses and expert training! You will have 24 hours to view each session for FREE!

However, we believe that every individual, especially business owners, has a timeline and learning curve. 

Learn more about this 7FSS event and grab your free pass now!

Have a great weekend!

-Gary

The 80/20 Of Ecommerce – May 6, 2022

China Sourcing Update 5/06/22 

What we know

  • There are no recent changes in policies and rules implemented in China.
  • Shanghai is still on lockdown, and our sources on the ground estimate that this will go on for another 2 months.
  • Beijing is also under restrictions, and many areas are strictly monitored to prevent worsening the Covid situation.
  • The Covid lockdown in China is still affecting logistics, deliveries, and trucking, and nothing has improved yet.

According to Fitch Ratings, near-term profitability constraints are developing for Chinese enterprises in various industries. Domestic and international consumer demand is being hampered, while a slew of travel restrictions is hindering supply chains inside China to halt the spread of Covid-19 cases.

Given weakening consumer confidence and the impact of lockdowns, China’s retail sales growth is expected to slow to the mid-single digits in 2022. Tourism, leisure, and luxury items, which benefit from discretionary expenditure, are expected to underperform basics.

This may put downward pressure on the ratings of more liable companies in these discretionary industries. Furthermore, gentler consumer demand in developed markets will increase demand pressures for Chinese corporations. This event is due to tighter monetary policy, normalization of demand patterns following the pandemic’s increase in goods purchases, and high inflation.

Image Credits: zhang kaiyv from Pexels

Lockdowns and supply chain disruption to accelerate Apple’s move away from China, with India a likely beneficiary, analysts say

Image Credits: Nana Dua from Pexels

According to analysts, there is an excellent chance that Apple will shift its operations away from China. It has been weeks since Shanghai and other nearby provinces have been experiencing strict lockdowns. 

As a result, the disruption to transport and production in Apple’s value chain has caused losses. There are two main reasons why Apple is directly affected by the events in China:

First, China is Apple’s assembly center. The components of devices from South Korea and Taiwan are assembled in the country’s factory. Second, the country itself is the second-largest market on the list for Apple devices. 

According to Luca Maestri, the chief financial officer of Apple, if the lockdown persists, the company’s revenue will decrease to $8 billion in June.

More than half of Apple’s 192 suppliers with internal manufacturing sites, including Foxconn, Pegatron, Quanta, Wistron, and Compal, have lockdown-hit Shanghai and Jiangsu production facilities.

Furthermore, two Foxconn factories in Shenzhen were forced to shut down for several days in March due to a local lockdown. And the most significant iPhone assembly compound in Zhengzhou has been short on labor due to Covid-19 restrictions, which have made it difficult for migrant workers from other areas to reach the Foxconn factory there.

Ming-Chi Kuo, an analyst at TF Securities, said that China had already been losing Apple’s trust even before the pandemic, yet the onset of the Covid-19 accelerated the process. 

Other possibilities include India, where land and labor are far less expensive than in the U.S. Due to the closure of China’s roadways and ports, iPhone production in India increased by 50% year over year in the first quarter of 2022. 

According to Indian media sources, this was facilitated by Apple’s choice to build the iPhone 13 in a Foxconn facility near Chennai, India.

Amazon serves as a cushion for profitless e-commerce companies

Image Credits: Karolina Grabowska from Pexels

Amazon’s first-quarter report has reflected the apparent status of the e-commerce industry. Both items sold by Amazon and its third-party sellers on their marketplace were experiencing a flatlining demand compared to the past year. 

Currently, the demand is inversely proportional to cost. Amazon’s shipping expenses increased by 14% per the year leading its operational revenue to be slashed in half. Amazon’s massive network of warehouses, distribution centers, trucks, and planes cannot keep up with the escalating supply-chain expenses.

Amazon is a giant, and as it slows down its expansion to better meet demand, it can wring out costs and enhance efficiency. Other e-commerce businesses without the same advantages are in for a challenging ride.

Companies that do not sell on Amazon must pay the increased expenses of shipping items to customers. Their business strategies revolve around convenience, which is becoming increasingly expensive.

Amazon aggregator Thrasio begins layoffs, names new CEO

Image Credits: Thrasio

Thrasio, the largest aggregator of Amazon businesses, scooping up and merging third-party Amazon vendors, will be laying off a portion of its team members on May 13th. 

That announcement comes as Thrasio announces a leadership change: Greg Greeley, a former president of Airbnb and a longtime Amazon executive, will join the company’s board of directors and take over as CEO in August.

Carlos Cashman, one of the company’s co-founders, will continue to serve on the board of directors of Thrasio.

The layoffs and new CEO appointments are the latest in a string of ups and downs for Thrasio in the past six months, highlighting some of the challenges of the aggregator business model. The layoffs are not a joke, unfortunately. The business verified the rumors. Their supervisors will tell workers over the next two days (Tuesday and Wednesday).

The message stated that the corporation “took the decision to reduce the size of the Thrasio team,” although it did not specify how many workers would be affected. It received roughly $3.4 billion in investment from investors to expand its company and acquire hundreds of businesses. 

It was buying firms at a rate of 1.5 per week and had several hundred brands in its portfolio when it raised its $1 billion round last October.

Takeaway: Thrasio has been expanding very quickly and now they’re starting to slow down their growth. If you are considering an exit, it may make sense to adjust your expectations.

Join the Orange Klik x Dragonflip Barcamp on June 9 -10

Next month, in Portugal, there will be an in-person international Amazon Barcamp event called Orange Klik Barcamp. This could be a good opportunity for you if you are selling over Amazon and you want to network with and surround yourself with like-minded e-commerce sellers in Europe.

This English-speaking Amazon FBA seller is coming up on June 9-10th in Lisbon, Portugal! 🇵🇹 

Organized by Orange Klik and Dragonflip, this Barcamp event will bring together hundreds of like-minded attendees whom you’ll have the chance to network with, address your e-commerce problems, and pitch ideas to fellow sellers.

By attending this “unconference” type of event, you will have a chance to:

✅  Learn from 100+ international sellers in one place

✅  Get only attendee-generated content that solves your biggest issues

✅  Choose the content that you want to learn about the most

✅  Discuss only the most important and hottest topics to help you grow your FBA business

✅  Network, meet new friends and business partners

👉 Limited tickets are available now. First come, first served. https://orangeklik.com/barcamp/ 

Orange Klik will offer a 50€ discount when you register through this link and use my code: 7FSS

Note to be transparent – I’m an affiliate of Orange Klik and I believe that this is going to be a great event.  If you do purchase a ticket I will receive a small commission to help us keep creating the best award-winning content to help you grow your e-commerce business.  And it helps pay for my coffee!  Thanks!

Get your Free Pass to 7FSS6 Evergreen now!

Registration is now open for the 7 Figure Seller Summit 6 Evergreen! Get ready to discover how 7 and 8 Figure Sellers think, overcome challenges, and strategize ahead of the e-commerce game. 

If you missed it the first time, good news! Due to popular demand, we have made 7FSS6 Evergreen. That means you can get a free pass to watch for a limited time right now!

You will learn how to do the following:

  • Develop the MINDSET of a million-dollar business owner and FUNDAMENTALS of creating a 7 Figure eCommerce business
  • Master MARKETING and Building a BRAND and Optimizing PPC to drive external traffic to your listings, build an audience that you can launch to, and rank your products with,
  • Implement strategies to SCALE your e-commerce business, so you’re working ON your business and not IN your business
  • Increase your PROFITABILITY, know your numbers, and cut expenses, so you keep more money in your pocket…
  • EXITS – How to build a business that will be attractive to buyers so you can SELL it

We’re excited to have over 30 outstanding entrepreneurs and experts speaking at this eCommerce online event. Enjoy over 30 hours of masterclasses and expert training! You will have 24 hours to view each session for FREE!

However, we believe that every individual, especially business owners, has a timeline and learning curve. 

Learn more about this 7FSS event and grab your free pass now!

In case you missed it:

Have a great weekend!

-Gary

80/20 Of Ecommerce – April 29, 2022

China Sourcing Update 4/29/22 

What we know

  • Manufacturing and export hubs in China are on the verge of halting their operations.
  • The Covid lockdown in China is pushing the logistics chaos
  • Region to region entrance requirements are negatively affecting truckers

Image Credits: iStock

As we have shared in the past weeks, Shanghai is the hotspot of China’s current Covid-19 outbreak. Because of this, nearby regions like Wenzhou impose strict entrance policies. 

Truck drivers must show several health declaration forms to prove that they are Covid-free. It is also essential that they have not been in virus hot spots in the past two weeks. On-site Covid tests are also required.

However, even though drivers meet all the criteria, authorities are still eager to isolate them for a minimum of two weeks within the quarantine center. Passing all the requirements is perceived as useless as some local officials would still push the isolation. As a result, these decisions hampered the transport of foods.

As the lockdown continues its fourth week, the logistic services become non-operational, especially in the Yangtze River Delta. Manufactured goods are piling up in warehouses due to trucking delays. Manufacturers also expect to pause their operations as they, too, experience delays in receiving raw materials.

Some people suspect that lockdowns may be lifted in the first week of May. Trucking and shipping companies will then cope with their backlogs and lulls in production. Kentaro Yoshida, general manager of Yasuda Logistics, said it would be in July that international logistics return to its regular operation. “The current scenario at the Shanghai port is like rubbing salt into the wound,” he continued, referring to Shanghai’s troubles as atop already crippled international logistics systems and supply networks.

Falling sales and rising costs hurt Amazon’s profitability

Image Credits: Financial Times

Due to a drop in online sales and rising costs, Amazon has recorded its slowest sales growth in Q1. Their aggressive decision to scale amid the Covid-19 pandemic caused them to face overstaffing and capacity excess.

Additionally, this downward sloping performance was expected due to issues in logistics, supply chain, inflation, and increasing staffing costs. The unceasing war between Russia and Ukraine also became a challenge.

In the first quarter, operating income of $3.7 billion fell short of analysts’ forecasts of $5.3 billion, compared to $8.9 billion the previous year. Amazon’s online retail sector saw sales of $51.1 billion in January-March, down from $52.9 billion the last year.

Amazon forecasts a similar modest revenue increase of between 3% and 7% for the current quarter. On Thursday, April 28th, during after-hours trading, results show that the company decreases its shares. 

Key Takeaway:

As an Amazon Seller, we should understand that some macro issues may affect us and our businesses. We need to be hands-on with our company during these times. Since we are at the receiving end of all the impact, the least we can do is the plan, strategize, and devise ways to lessen the impact.

Amazon opens up Prime delivery service to other retailers

Image Credits: iStock

Amazon opens its Buy with Prime delivery service to other online merchants. This service allows third-party merchants to leverage Amazon’s massive shipping and logistics network to fulfill orders on their websites while also appealing to Amazon’s 200 million+ Prime subscribers.

However, sellers cannot use Buy with Prime for free. Prices may vary depending on payment processing, fulfillment, storage, and other costs. The e-commerce giant hopes to expand the service later on to merchants using rival platforms such as BigCommerce and Shopify.

The service will only be available to Amazon FBA sellers for the time being. Only those sellers who receive an invitation can join this service. 

Merchants have to pay for their products to be held in Amazon’s warehouses. They can leverage the company’s supply chain and delivery operations using this service. Shortly, this will be extended to other merchants, even those who aren’t Amazon sellers.

According to Bob O’Donnell, founder, and chief analyst at Technalysis Research, Buy with Prime has the potential to expand into a profitable service for Amazon despite being undersized at first. 

Key Takeaway:

Because their goods are already kept in Amazon fulfillment centers, merchants utilizing FBA may add Buy with Prime to their online store in minutes. It will provide a new approach for e-commerce merchants to expand their businesses. Amazon perceives that sellers can strengthen their customer relationships with this service’s fast and convenient shipping processes.

[Video Replay] How to know your numbers and turn around declining sales for Amazon Sellers

Do you know your numbers? What is your actual ecom business profit?

Marc Jepsen from ManageByStats just provided valuable discussion to help you know your numbers if you are running an Amazon business. He shared in this masterclass the 4 Vital Signs Of Your Amazon FBA Business To Boost Your Profitability And Prevent A Heart Attack. 

In this training, I invited Marc Jepsen from ManageByStats for you to know How to know your numbers and turn around declining sales for Amazon Sellers.

You’ll learn:

[10:54] You need to know the 4 vital Key Performance Indicators

[11:30] If your sales go down, what do you do?

[12:20] KPI: Sessions – How many times your listing is being seen

[13:00] KPI: Conversions – Measures the Average Number of Units Sold per Session

[15:03] KPI: Profit – What is left after deducting direct overhead costs, COGS, Amazon fees, Ad costs and Tax

[16:56] KPI: Average Reviews – One of the most important points of your Amazon Listing

[18:35] Q&A: What if I don’t have reviews? Do I have to launch below the average cost in the market? 

[21:35] What do you do when sales go down? – Using KPIs to evaluate your numbers

[25:26] Q&A: Do we need to enter any information manually or does it connect to Amazon and uploads all of this information?

[31:00] PPC Units and Organic units 

[39:00] Q&A: Is this Best for FBA or FBM?

Watch full replay here.

Get your Free Pass to 7FSS6 Evergreen now!

Registration is now open for the 7 Figure Seller Summit 6 Evergreen! Get ready to discover how 7 and 8 Figure Sellers think, overcome challenges, and strategize ahead of the e-commerce game. 

If you missed it the first time, good news! Due to popular demand, we have made 7FSS6 Evergreen. That means you can get a free pass to watch for a limited time right now!

You will learn how to do the following:

  • Develop the MINDSET of a million-dollar business owner and FUNDAMENTALS of creating a 7 Figure eCommerce business
  • Master MARKETING and Building a BRAND and Optimizing PPC to drive external traffic to your listings, build an audience that you can launch to, and rank your products with,
  • Implement strategies to SCALE your e-commerce business, so you’re working ON your business and not IN your business
  • Increase your PROFITABILITY, know your numbers, and cut expenses, so you keep more money in your pocket…
  • EXITS – How to build a business that will be attractive to buyers so you can SELL it

We’re excited to have over 30 outstanding entrepreneurs and experts speaking at this eCommerce online event. Enjoy over 30 hours of masterclasses and expert training! You will have 24 hours to view each session for FREE!

However, we believe that every individual, especially business owners, has a timeline and learning curve. 

Learn more about this 7FSS event and grab your free pass now!

In case you missed it:

Have a great weekend!

-Gary

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