This question has been perplexing in my mind since the first day I became Amazon.
Every year, there are rumors in the market that Amazon has passed its dividend period. Amazon is getting more and more difficult. It can’t do it now. It has no future. It’s all pits when it comes in, all of which are cutting leeks.
Indeed, I don’t deny Amazon’s difficulties,
Why has it become difficult?
This application of economic principles is the theory of supply and demand, which is a pair of invisible hands in the market to continuously adjust the relationship between supply and demand.
A few years ago, when Amazon first started, there were customers but no sellers. Whoever was on this platform would be able to sell orders. There were more customers and fewer sellers. Then as the competition intensified, fba started to surpass. If the goods are distributed and shipped, the competition will intensify, the money will be made with the resources, and the competition will be the boutique model, differentiated selection, exclusive mold creation, and then the patent war will begin.
Why is there competition?
That is, the demand in the theory of supply and demand remains unchanged, the supply increases, and competition arises.
With the development of Amazon in the past few years, it has step by step to send itself to the first place in the market share. While the number of customers is limited, the number of sellers is increasing wildly.
Finally, this year Amazon sellers began to roll in and began to lie flat.
Is it only Amazon in the roll?
The whole of China is in volume,
What is involution
Refers to a phenomenon in which peers are competing for more limited resources, leading to a decline in the individual’s “benefit-to-effort ratio”.
It can be seen as “inflation” of hard work.
What is lying flat
It means that no matter what the other party’s reaction is, there will be no waves in your heart, and there will be no reaction or resistance to it, indicating a submissive mentality.
Raw materials in all walks of life have skyrocketed, and production costs have continued to increase. There are so many factories in the south that cannot recruit people, and labor costs are also increasing. China’s manufacturing industry is also constantly shifting to other countries with low population costs.
Add in the cost of living, education, housing, and pension costs for everyone.
People will be very tired and difficult. What you pay is not proportional to what you get, and even the ratio of profit to effort decreases.
Then roll it up,
Then lie down.
then what should we do?
Housing prices are rising, adjustments are made, education costs are high, and training institutions are cut. Everything is preventing lying flat, and we are constantly innovating.
We will start to approach Germany and Japan.
Continuously innovate, continuously increase technology, continuously control product quality, and strive for perfection.
You can only go this way if you want to stand out
The excellence and strict quality requirements of developed countries are the result of involution.
In today’s constant involution, can Amazon still do it?
Let’s answer the first question first
1. Why do we want Amazon?
I think the purpose of not having a seller is that I want to have fun,
I believe that everyone’s purpose of doing Amazon is to make money. Maybe there are many ways to make money in your life. This is just one of them, but Amazon may be the only channel for many people at present.
Is it still possible to do it now?
I think it can be done,
In the current environment, Amazon is constantly rectifying evaluations, multiple stores, associations, and infringements.
Constantly purifying the environment, sweeping away all black technology players, and even sealing so many big sellers this time,
Then you ask me if I have been blocked,
To be honest, I have also been sealed off two stores.
But it is indeed a violation,
Now we are all operating in pure white hats and abide by the law. There are still millions of profits every month.
The more the rumors and the more the public retreat, the more opportunities there are.
Just like stocks, when Tencent and Moutai both hit new highs last year, everyone went crazy. Now the stocks of Tencent and Moutai are nearly cut in half. Tencent’s PE has gone from a peak of 50 to today’s 20, but everyone is discouraged.
Just like buying a house, regulation and the epidemic have caused house prices in a second-tier city to go sideways for several years. I bought a set in December 2020. At that time, it was more than 17,000, and the down payment was still instalment. By May 2021, the number of newly opened communities has reached 22,000. The down payment installment is cancelled, and the purchase of a house requires a capital verification and ranking. Everyone rushed in, queuing up to grab a room. Winding up immediately after opening. It’s really unimaginable, but it can be understood that normal people have the psychology of chasing ups and downs.
Now that the epidemic situation is being controlled, whether it is the guide price of second-hand housing or the increase in loan interest rates, real estate will enter sideways again, and some real estate will be discounted. There will be opportunities before this year.
In the future, I have the opportunity to write the house selection logic for buying a house.
All the black technology is eliminated, and players who cross the border are out of the game, just like rectification and education, private transfers to public offices, and citizen recruitment. Everything is to let everyone return to the same starting line.
When everyone is at the same starting line, what is fighting is real power, and what is fighting is capital, strength, cognition, and technology.
You are doing innovation, others are doing infringement, you are doing white hats, others are hacking technology, you are trying to communicate with customers, and others are doing small cards. Can’t beat the speed of these people forever, are they still on the same starting line?
2. What is the wish of Amazon sellers?
My wish is to be able to earn money steadily for a long time,
Amazon has always been a high-risk industry.
After registering a store, a second review or kyc review is required. This level is difficult for many people.
Then the products were selected and shipped, and Amazon sellers supported a group of software sellers and freight forwarders.
After all FBAs are issued, it will be as small as tens of thousands, as many as tens of millions, and hundreds of millions. It also feeds collection agencies and loan companies.
In the operation, they encountered infringements, spoofs, related titles, etc., and supported the service provider.
Price competition, slow sales of goods, and support for third parties outside the station.
Our wish is that the account can be safe and risk-free, the goods can be quickly turned over, can have a stable link to the hot money, and can make money in a long and stable manner.
Then how can we make money stably and long-term?
In fact, operating Amazon is also a kind of business activity, which is inseparable from the essence of business
3. What is the nature and future of business?
The essence of business is transaction, and the value of an enterprise in business is to create value and deliver value.
The role of the Internet is to symmetrical information, resulting in a reduction in traffic costs and acquiring more customers with the same needs.
To break through in business, you need to study customers, crowds, preferences, usage scenarios, and pain points.
Solve pain points, or create new categories and new usage scenarios to create value.
Improving production efficiency, reducing production costs, and lowering prices also create value for customers.
The other is the transfer of value, the transfer of information, and the transfer of goods belong to the transfer value.
For example, the development of express delivery, the efficiency of JD’s self-built logistics, and the development of the Internet are all about transmitting information value and eliminating information asymmetry.
Another example is the current big fire, a lot of food, Meituan Optimum, and so on.
Selling on Amazon increases the value of information transmission. If we don’t sell on the Internet and go offline, it will be difficult for us to enter markets around the world and connect with so many target customers. The cost of establishing offline channels is also unimaginable for our small sellers.
We use overseas warehouses or FBA shipments to quickly and efficiently transfer the value of logistics that has been resolved.
The only thing we have to do is to create value.
In the current reality, companies have limited opportunities to reduce costs with mature standard products. Our opportunity is to discover user needs, improve existing styles, or find small target groups with the same needs to meet the long tail. theory.
In short, it is to find a long-tail demand and make it into a hot style, that is, a long-tail hot style, which is the real future.
So how can we make use of the long-tail explosions to achieve a winner-takes-all result?
1. Find enough long tail sub-categories or usage scenarios.
For example, hangers include adults, children, babies, men, women, household, travel, suspension, and multifunctional. One product cannot satisfy all people
For example, desk lamps have bedsides, desks, conference rooms, pianos, children, adults, and elderly people. Don’t think about making them a national explosion. Stronger than Huawei, iphones have many models, many sizes and colors, and many price ranges to meet different target groups.
Find your long-tail target group and make a hit.
2. In this long-tailed market demand, find the most common pain points.
We are going to find the pain points and solve them, and we must also achieve the best in the market, such as cigar lighters, which are facing the people who smoke cigars, the firepower, and whether the cigar needles are matched or not.
3. Improve the motivation of social sharing.
Involving product packaging and product design
There is a theory, that is, the wow theory. After receiving the product, the customer will involuntarily wow and be pleasantly surprised.
For example, the product design of Huaxizi. It’s really amazing. Customers will involuntarily share and spread socially.
There is also a theory called the Veblen effect,
That is, customers have the psychology of showing off, why do you add a small tail when you post to Moments or Weibo, iphone13
Why do people buy luxury goods, this kind of product whose display value is greater than its use value.
This psychology is not possessed by the rich, but also by the poor. This word is called attire.
I remember that there is a product called World Map, but it comes with a small flag on the map. You can place flags on the countries and cities you have been to to show off that you have been to many places and show yourself. Sense of superiority.
4. Where is the way out for Amazon sellers?
When we understand the above theory, we will know where our Amazon sellers are.
Come on, get dry goods
Article 1: Price war
This should be the easiest one, everyone can feel it, and will use it.
The price war I’m talking about is not a price war that loses money, but a win by volume.
There is a scale of volume and price in business logic, whether small profits but quick turnover or small quantities and high profits. We have to locate this well.
There is also a theory in the business world that profit = your cost-the opponent’s cost
Why do you say that?
Product selling price-the difference in product cost is just the cost of the industry. Or the opportunity cost of the industry.
When your cost is greater than that of your competitors, and others cut prices, we will lose money.
How much lower our costs are than our competitors, this is our profit in the face of price wars. We dare to drop, others dare not to drop. We can knock others out.
In short, it is through the continuous expansion of sales and the introduction of more efficient management and production processes to achieve the effect of reducing product costs. How much we are lower than our competitors, this is our profit.
Article 2: Innovation
In any business world, products have a day of aging and withdrawal. Amazon is no exception.
Such as Nokia, bb machine, Xiaobawang, such as home-grinding knives and scissors, aluminum cast basins and pots, etc.
For example, SMS to WeChat is free
For example, the rice cooker that can only steam rice up to now has more functions such as steaming rice, cooking porridge, heating rice, keeping warm, and timing.
From ordinary ovens to flauntable ovens with cameras and apps
A product will always be replaced by a new product, it’s just how long this iteration cycle is. High-tech electronic products have the fastest iteration cycle, and household products are relatively slow.
This is the well-known innovation curve model. When a product enters a hot product, we must develop the second hot product quickly and in time. To prevent the impact on us when the first explosion decays, and quickly incubate the second explosion when the first explosion explodes. Only in this way can we ensure the long-term continuity of our sales and profits.
There is actually a very dangerous behavior in a shop with only one hot style.
Article 3. Diversity
In the first article, we talked about improving product production efficiency and reducing product costs. The sales on Amazon alone cannot guarantee the maximum sales of our products.
We need to develop more sales channels, such as Wal-Mart, Shopee, eBay and other e-commerce platforms.
You can also open alibaba and other international stations to find B2B wholesale customers and increase the order volume
1688 can also be opened, and sales can increase through domestic channels and domestic Amazon sellers.
At this time, our output and sales volume may be the largest of all competitors, and the price is also the lowest.
In this way, our profits can be guaranteed and the life cycle will be longer.
Just like 2–3 years later in Amazon, the sellers of the same model as me died, and I was still there.
Article 4, branding
This is a difficult road, at least for most Amazon sellers.
You want to ask me if I have successfully branded,
I’m honest, no.
I am also one of the ordinary small sellers on Amazon.
In the past two years, the DTC brand has risen against the trend, all of which are explosive manufacturing machines.
In the United States, the DTC brand means to directly sell products to users through self-built Internet sales channels, and there is no middleman to make the difference.
And a further meaning is: the core of this type of brand is to be able to use consumer data for analysis, and provide consumers with an experience beyond expectations through a series of methods.
In addition, such brands will do everything possible to reduce unnecessary expenditures, especially in the media budget, in order to achieve the best product experience.
Then we first analyze how to form a brand
In business theory, there is a concept called a brand container. A brand is a container, just like a container filled with consumers from understanding to trust and preference. .
One that cannot be remembered by consumers or trusted by consumers can only be called a trademark or code name. It cannot be called a brand.
Just like Taobao once produced many Taobao brands, they all disappeared in the end.
Brands that rely on a single channel are definitely fake brands.
With so many top sellers on Amazon, the products are sold on Amazon. They can’t be found on other platforms, and no information can be found on the Internet. Not to mention authoritative media, offline supermarkets, and wholesale channels.
Consumers choose you only because of your position, not your brand reputation or popularity.
How to build a brand?
Share some theories with you
The first is positioning, the niche needs of market segments
If the subdivision of table lamps used on pianos is definitely a relatively niche market in the field of table lamps, then I will make a dedicated table lamp for pianos to meet a sub-market, and focus on strengthening the scene in promotion and marketing, except for this. It can be said that he is the leader in piano table lamp sales and so on.
Second, taste, representing the value of consumers
Compared with other competitors, it is more tasteful, such as higher-end and better packaging, and it will definitely not be low-end when put together with a product with a high customer unit price such as a piano. It’s best to have the value of showing off.
Third, quality, quality and service are value for money
It means that the quality is good, or there is good after-sales service and promise. Give customers a feeling of trust in the brand.
Pay attention here
Value for money does not mean the comparison of product value and price
In addition to use value, product value also has psychological value.
For example, the lv bag, the product use value is the same as the use value of the 20 yuan bag on the street, and they are all stuffed.
But lv has a strong psychological value, such as the self-confidence, taste and show-off mentality of holding an lv bag.
In addition to the product level,
First, the unique selling point
The category just now is the positioning of the product, and the marketing selling point at this time is refined.
For example, for cold medicine, I take white tablets during the day and black tablets at night
Like Jane, father’s love
Such as melatonin, gifts
Such as kGebao, good head and good voice
For example, oppo, charge for 5 minutes, talk for 2 hours
Second, brand storytelling
Attracting consumers through content marketing and brand stories can also be said to be established.
The advantage of this is to narrow the distance with consumers, the brand is not superior
Like Tesla and Musk, Xiaopeng Motors and Xiaopeng.
The founder of a company is the spokesperson of the company and its products, allowing consumers to see and feel the vitality and value of the company.
Example: The core of the well-known Casper brand is that the transportation of mattresses around the world is wasteful and inefficient. In addition, if you don’t like the mattress during the first 100 days of sleep, Casper will come to pick you up.
Then the Casper brand is designed to solve the transportation problem, and is not satisfied, you don’t need to mail it, someone will pick it up.
Third, the refined operation experience exceeds expectations
Do not go offline channels, directly face consumers, use the now developed social media channels to directly interact with consumers,
To feel the needs of each consumer, continue to iterate their products and deliver. Give customers respectful and exceed-expected shopping experience, use experience, sharing experience, etc.
The feature of Casper is that it can be compressed into a carton, which is very convenient for transportation.
There are also many DTC brands that attach great importance to the user’s full-link experience, including: official website content design, purchase experience, express service, after-sales service, unpacking experience, usage methods, social media sharing…
Fourth, make good use of social media
According to the unique selling point of the product and the experience beyond expectations, social media promotion should be carried out. Topics should be created, and fans should be used to share creative content and detonate social media traffic.
Many founders will continue to produce and produce content from their own perspectives to create personal IP. In addition, brands are also good at letting users join in creating content, which becomes a tipping point. Share real user experience, product experience, unboxing experience, etc.
The last is
At present, the main sales channels of the new brand are online, such as official websites, independent stations, or third-party platforms, to quickly acquire customers and generate sales, and reduce production costs through large quantities of individual demand orders.
Then open an offline experience store to complement the online experience.
The above is my thinking and cognition of the way out for Amazon sellers. Maybe you agree, maybe you don’t agree. We can discuss with each other, and I believe that talking can make both sides progress together.