Today, while planning a new direction, I'd like to share a few thoughts. The main question is how to evaluate whether a category is worth pursuing.
We can divide the evaluation criteria into three categories, which roughly correspond to the different stages of our Amazon journey and the product development methods we applied.
First Stage:
I entered the cross-border e-commerce industry in 2016, so let's set 2015-2018 as the first stage (though this timeline might differ from others' views). This was the era of rapid, unchecked growth. If there are old sellers here, they might remember that doing Amazon was almost like picking up money, with some products having gross margins as high as 300%. I recall that launching a product could take from a week to a month, though not all launches were successful. If a product failed, we moved on to the next one. Initially, we developed products based on whatever resources we had or by copying profitable products from friends or other sellers. The most notable example was the karaoke microphones. By 2017, we no longer just followed others but started conducting product research to determine projects. We primarily considered market size, competition level, and profit before proceeding. (Anyone else had bosses who set criteria like over 30% profit margin and more than 50 daily sales? Raise your hand!)
Second Stage:
From 2018-2019, many sellers made substantial profits, with some even buying houses in Shenzhen Bay. I call this the development stage. Companies were expanding, and you could hear stories of Amazon success everywhere in Shenzhen. Even downstream service providers started advertising in the metro. How did they make their money? Through various tricks, gift cards, fake orders, etc. In 2017, I remember one of our top products had its main image changed by a vendor central (VC) account, followed by constant follow selling. Sellers from that era probably encountered similar experiences. These events set the stage for the second phase of Amazon. If others could change main images and follow sell, why not create more accounts and boost a bit? So, we started expanding and playing tricks, though some companies stuck to pure white-hat practices, focusing on meticulous work. Due to different company scales and budgets, some sellers didn’t blindly boost sales. For example, in the US marketplace, some companies only boosted 10-20 orders, some 30-50, and some reserved 2000 items and boosted 500. At this stage, product development considerations included market size, competition level, profit, and whether the product fit us. Could we handle the competition's boosted orders? Could our company manage large items and high unit prices? Could we match a link that got a thousand reviews a month?
Third Stage:
From 2021 onwards, we can consider this the third stage, with a special period from 2020-2021 due to the pandemic, which led to a peak in cross-border e-commerce. Most products saw significant growth, with some sellers getting lost in this wave. This continued until May 2021, when a public company collapsed, and big sellers faced frequent suspensions from June to August. This served as a wake-up call for all Amazon sellers. After unsuccessful appeals, many sellers started new accounts, repackaging and clearing out inventory, or even clearing inventory across platforms. Thus began what I call the sedimentation stage. After these events, we learned a lesson: don't put all your eggs in one basket. Many sellers began diversifying with independent sites, Shopee, and other platforms. By 2021, those who entered the industry before 2020 had accumulated some experience. Sellers started adjusting their business directions and streamlining their SKUs. At this point, product development considerations included whether the category could be sustained. We often see forum posts asking what else to do if Amazon isn't an option anymore. I used to wonder the same thing until recently, when I realized that if we can become experts in an industry, we can fulfill the same needs on different platforms in different ways. So, in the third sedimentation stage, we focus more on whether the industry can last three, five, ten years, or even longer.
Recently, I've been learning things beyond Amazon. Regardless of your experience level in this industry, this might be relevant. Some people may have made money due to the times or opportunities. Money is just an IOU from the world. As long as you provide value to society, you will get a return, sooner or later.
