Sellers are seeing the appeal of their own websites as Amazon teaches them just how vulnerable they really are.
Photo from Unsplash
By YU Hao
Over 50,000 allegedly fraudulent Chinese sellers have been banned from Amazon over the past two months, casualties of the campaign against fake reviews. Those believed to have paid for five-star reviews have had their accounts suspended and inventories frozen. More than 100 billion yuan (US$15 billion) of sales have been lost.
Some have done nothing wrong. There must be at least a few false positives in such a large sample. For them, the ban is a reminder of just how much they are at the mercy of eccentric billionaires’ whims. Many are already trying to form their own e-commerce sites. JIA Yafei helps independent sellers advertise on Google and Facebook and said business has picked up considerably since Amazon started booting people out.
For some sellers, the appeal of going independent is more than just steering clear of Amazon’s idiosyncrasies. Furrytail, a pet product maker, has stayed away from Amazon since it entered the US market last year. Cat litter boxes and odor eliminators are too niche to gain much attention on Amazon. Furrytail focused on Google from day one.
“Google has a near-monopoly of web traffic. Anyone looking to buy cat litter boxes will search on Google,” Jia said. The company spent 70 percent of its budget on Google ads and SEO.
Clothing brand Mukzin personalizes the shopping experience and builds customer loyalty in ways not possible through an amazon store. It is much easier to find out what customers actually want. In April, Amazon stopped disclosing customer addresses in its fulfillment reports, making it difficult for third-party sellers to use targeted marketing. Independent sellers get their customer insights first hand.
Furrytail advertises large cat towers to suburban families and small beds and scratcher posts to young people in city apartments. But running an independent website, including marketing, sales, and logistics, can be costly and disorienting.
“For beginners, we often recommend starting with marketplaces, or doing a marketplace-independent-site hybrid,” Jia Yafei said. Ads are expensive, so going independent is only worth it if the average order value is US$50 (322.02 yuan) or more.
Jia has worked with many high-volume-low-cost sellers. More often than not, the seller operates multiple websites, each for a different product — one for clothes, another for home products, for example. Turnover is quick, and there is little barrier to switching from one category to another or starting a new one.
They attract buyers by blasting out ads on social media, a model that worked well until recently. Advertisers on Facebook are now subject to more scrutiny; new accounts also face a US$450 daily spending limit on ads. Other platforms also have restrictions on advertisers.
Cross-border e-commerce is changing. Sellers that focus on quality and customer experience will do better. Brands such as Shein and Anker have already shown the worth of going independent. Independent sellers will create a new marketplace with their own ad brokers, marketing agencies, and analytics firms.
“Digital marketing is definitely moving up our clients’ priorities,” Jia said. “Big changes are coming.”