Cross Border E-commerce Sellers Are Busy With Rushing Goods, But The Industry Has Quietly Undergone Changes

Cross border e-commerce sellers are busy with rushing goods, but the industry has quietly undergone changes

 

Goods preparation, packaging, container arrangement, inspection, container loading... This is the daily scene of kapoklog Logistics Logistics Freight Forwarders' "warehouse explosion" in the last week.

 

The container may contain goods that were previously affected by the so-called 'equivalent tariffs', new orders received by foreign trade companies from the United States, and another replenishment by cross-border e-commerce sellers.

 

 

Temu's fully managed model has not been revived

 

In May, all fully managed products were taken down, and traffic instead focused on our semi managed merchants. The goods in the overseas warehouse for two months were sold out in two weeks. "Zhang Sheng's store mainly deals with home furnishings, daily necessities, and other categories, and he frankly stated that the impact on the store was limited.

 

Previously, he had prepared sufficient response plans, such as switching from full custody mode to semi custody mode before the cancellation of T86 policy, and sending two months of stock to overseas warehouses in advance.

 

In the semi custodial mode, he needs to complete the entire logistics service process of warehouse management, shipment fulfillment, inventory maintenance, and end of pipe delivery, and put the inventory products from overseas warehouses on Temu for sale.

 

On April 29th, he shared a screenshot on his social media account of achieving the status of a "star seller".

 

The screenshot shows that 'star seller' refers to a seller who has ranked among the top in their main product categories within the past 30 days. Seller ranking takes into account multiple factors, including the sales and review ratings of the website in the current shopping country/region. According to these standards, the top 5% of sellers will display the "Star Seller" tag.

 

Therefore, he began to be busy with shipping (sending goods to overseas warehouses), and stated that the store operation would return to the normal state of "real-time monitoring of platform hot products, analysis of hot products, and timely replenishment" in the future.

 

Zhang Sheng's store operations have returned to normal, but the landscape of the cross-border e-commerce industry has quietly changed.

 

Since 2016, the T86 policy has promoted the rapid rise of cross-border e-commerce platforms by increasing the tax-free limit for low value packages. Platforms such as Temu and Shein, which promote fully managed low-priced direct shipping models, have enabled many factories and sellers with zero foreign trade experience to quickly enter overseas markets. Unlike semi custodial sellers who follow up on the entire logistics process, fully custodial sellers only need to be responsible for stocking up goods to the platform's domestic warehouse, while the rest of international logistics, final delivery, etc. are handled by cross-border e-commerce platforms.

 

Therefore, when the T86 policy is cancelled, the low-priced distribution model represented by Temu, Shein full hosting, and Amazon FBM self shipping will be directly affected. To stabilize the market, Temu is busy promoting the Y2 model. As an extension of the semi palletized model, the Y2 model launched at the end of April can be seen as a "transitional" solution provided by sellers who have not yet established overseas warehouses but have the ability to ship small packages. Shein has also launched a self operated POP model in the United States.

 

However, in Zhang Sheng's view, the return of full hosting is still in the stage of "big talk, little rain", and the full hosting model for US sites has not yet been restored. Some Shein sellers have also stated that their store operations are still stuck in a "quagmire".

 

Many cross-border e-commerce professionals see Meike, which focuses on the Latin American market, as the next battlefield for expanding sales.

 

The trend of market diversification is accelerating. Cross border e-commerce companies are also attracting traffic through independent websites and establishing brand private domain traffic, expanding sales channels, and reducing dependence on a single platform, "said Lin Long'an, President of the Greater Bay Area Import and Export Business Association, in a recent interview with reporters.

 

Amazon FBA sellers ship smoothly

 

After the impact on Amazon FBM self shipping sellers, the market had predicted market demand for sellers who rely on Amazon Logistics (FBA) or undertake transfers.

 

But Guo Sheng, who specializes in 3C products on Amazon, did not wait for a "surge in orders". The sellers in my Amazon seller group have hardly felt any changes in sales. On the contrary, he found that the sales off-season in April, combined with a decrease in buyer confidence, led to a slight decline in store sales in the recent period.

 

However, compared to self shipping sellers, Amazon FBA sellers are generally less affected. Currently, most Amazon Chinese sellers choose to ship through the dual clearance and tax inclusive channel, and we are accustomed to preparing for three to four months before the peak season arrives, "said Guo Sheng, who is shipping to Amazon warehouses for a small promotion in July.

 

In addition, sellers of light and small commodities have relatively little impact, and the lower "first leg" fees give sellers more flexible pricing space. The industry is accustomed to the process of transporting goods from the shipping location to overseas warehouses (such as Amazon FBA warehouses, overseas warehouses, etc.), which is called the "first leg". Currently, the ratio of the "first leg" cost of Guo Sheng's products to the value of the goods is 1:10.

 

Despite the short-term increase in logistics and customs clearance costs, although the cost per order of Guo Sheng's store has also increased by a few points, the store's operation has not been actually affected.

 

After the Qingming Festival holiday, shipping companies represented by Meisen Express increased their prices by about 80% during the peak period. In this situation, we and most sellers chose to postpone shipments and adopt a wait-and-see attitude. He shared that shipping prices have increased by 10% -20% in the short term compared to before, and the impact is also within an acceptable range.

This also shows that products with high added value are more resilient. Lin Long'an stated that many companies are increasing their investment in product research and development to enhance the technological and brand advantages of their products.

 

The freight situation will gradually return to normal

 

Traditional foreign trade enterprises and cross-border e-commerce sellers are rushing to replenish goods during the "90 day window period", and the emergence of the "rush to ship" has led to a shortage of transportation capacity.

 

Jaydon, the business director of Kapoklog Logistics Co., Ltd. in Shenzhen, told reporters that the company's inquiry volume rebounded, the turnover of new customers increased significantly, and the customer's enthusiasm for delivery increased significantly. The company's US line business accounts for over 80%, with cross-border e-commerce as the main customer base. Kapoklog Logistics is optimistic about the cross-border export market environment. American customers are gradually increasing their shipment volume, and their confidence in American exports is growing.

 

 

After foreign trade companies received "shipment reminders" from customers, although the freight volume on the market skyrocketed by 300%, Guo Sheng reported that there was no situation where Amazon freight forwarders could not book containers.

 

Both Guo Sheng and Zhang Sheng are optimistic about the subsequent recovery of transportation capacity, stating that "transportation capacity will increase in the future, after all, China US freight is too mature, there are many flights, and it is not the peak season now. Transportation capacity will gradually return to normal.

 

Recently, many Amazon FBA sellers have also reported shipping restrictions. Jaydon stated that he is currently shipping normally. "The platform may refuse to ship goods with severe unsold items to the warehouse, and occasionally adjust storage capacity, which is a normal phenomenon and not closely related to tariff policy adjustments.

 

Overseas warehouses have become a must-have for more cross-border e-commerce companies. According to Zhang Sheng's feedback, the cost of booking overseas warehouses has not increased. "Anyway, the plates in the warehouse are there, so it doesn't have a significant impact.

 

Overall, cross-border e-commerce sellers have returned to a normal pace of operation. Kapoklog Logistics suggested that cross-border e-commerce enterprises optimize their logistics models, such as selecting full container transportation or using overseas warehouses to stock up goods, so as to reduce their dependence on direct mail packets; At the same time, we will increase our efforts to expand into diverse markets and enhance the added value of our products.