In the industry, many sellers ridicule themselves: doing cross-border e-commerce is tantamount to cultivation, not only must have a strong (can stay up all night) body, but also have a firm (resistance) belief, in the road of thorns, in addition to hair In addition to the stable topping and maternal singles, many sellers are also in a state of capital chain: there is no money to stock up in the peak season, and the money is used to withdraw the perfect exchange rate. However, in terms of funds, the problems of sellers can be far more than These ones.
For the financial problems that sellers may encounter in their operations, I interviewed Steven Xu, head of business development at Payoneer China, who is familiar with the industry environment. After each article of science, Steven also provided some feasible solutions for the sellers.
1. Worried that the collection account is not safe
Funds are focused on payment. Steven said that in terms of receiving accounts, sellers are most concerned about two issues: security and cost.
In terms of security, the Amazon seller’s doubts are: my payment account and Amazon account are bound, if the Amazon account is blocked, the money in the payment account can not be raised? Steven replied: This is a misunderstanding of many sellers, and this will not happen. The reason is simple. Amazon is an independent company. Regardless of which collection tool the seller uses, these companies and Amazon operate independently of each other. When the seller’s money goes from Amazon to the payment company’s account, the funds exist. In the account of the payment company, there is no relationship with the seller’s account on the platform.
In terms of cost, exchange rate fluctuations and formalities are all costs that affect sellers’ payments. How to better use their resources to save some fees is a concern of many sellers.
2, the cash withdrawal cost is high and there is a sink loss
The withdrawal cost is an inevitable expenditure. If the seller withdraws 1 million US dollars, the handling fee may cost 4,000 US dollars. In the case of a floating exchange rate, there may be a loss. However, the seller can reduce the cash withdrawal cost and the exchange loss through the operation of the funds in the collection account. Steven believes that this goal can be achieved through the closed-loop operation of the account. Simply put, all the payable costs are paid and then cashed out. Including the following three aspects:
Pay the service provider fee with the account funds. If the seller’s overseas marketers, purchasers, and logistics providers have a collection account corresponding to the seller, the seller can pay the fee to the other party through the intra-site transfer. For example, Payoneer, a similar function is called closed-loop payment, which is completely free. The sum of logistics, procurement, marketing and other costs accounted for about 60% of the seller’s total revenue, and then the platform commission was reduced. The seller’s cash withdrawal cost has been reduced by more than half, which also removes some of the exchange risk.
Pay VAT with account funds. The European VAT has been fully developed and this tax has become a cost item that cannot be ignored. The seller can directly pay the taxes and fees to the 6 national tax bureaus through the collection account, and save the withdrawal fee without the intermediate fee.
Currency conversion. When the amount of the required currency is insufficient, the seller may consider performing currency conversion within the account. Take the British VAT tax as an example. The seller may have more euros and less pounds. At this time, you can use the collection tool to convert the currency. The dollar, euro, and pound are the mainstream exchange currency, which can improve the seller’s capital turnover. Rate can also avoid some exchange rate risks.
3. Low capital turnover rate
First, the main factor determining the turnover rate is the seller’s logistics model. For example, due to the need to purchase goods from suppliers in advance and send them to overseas warehouses, the overseas bank sellers’ capital turnover is relatively slow, and may be 2-4 times a year. When the capital pressure is high, the sellers can do more. Straight hair or on behalf of the company, the capital turnover is naturally shortened, but the drawbacks are also obvious. Compared with the arrival of overseas warehouses in two or three days, this time-consuming mode affects the customer experience. This requires the seller to balance the “sales and customer experience” and “funding pressure”.
The second is the attitude of dealing with the tail goods. Under normal circumstances, sellers need to deal with sluggish inventory decisively, to promote or deal with special companies, especially in overseas warehouses, storage costs continue to accumulate with the backlog of goods. It depends on whether the seller wants to sell the goods back as soon as possible, or whether they are willing to sacrifice the profit and wait a second time.
4, the exchange rate is high and low, do not know when to withdraw
In the past three months, the exchange rate of the US dollar against the RMB has risen from the 6.2 era to the 6.7 era, and then has fallen back to the current 6.6 stage, and the seller’s heart has also fluctuated. From the highest point to the lowest point, the seller may lose more than 4,000 yuan for 10,000 knives, and the bicycle will change to a motorcycle. If the time is missed, the car may become a motorcycle. For the seller, does the exchange rate change really have such a big impact?
Overall, Steven said that the rise in the exchange rate is a good thing for sellers, boosting product competitiveness and increasing returns. However, due to the seller’s part of the cost, such as advertising costs and warehousing logistics costs, are paid in US dollars, so the exchange rate rise will also bring the corresponding cost increase. Sellers can weigh themselves according to the sales volume of their products, then decide whether to promote the promotion and promotion, and choose a reasonable logistics method to optimize costs.
In fact, because of the capital turnover needs, small and medium sellers generally do not store too much foreign exchange in the account, only a few large sellers who are not short of money can wait for the appropriate withdrawal time according to the exchange rate changes.
5, the biggest pain point: no money to stock up in the peak season
The peak season is a bumper harvest season for many sellers. During this period, the sales volume of products is much higher than usual. Accordingly, the demand for funds of sellers at this stage may be twice or more than usual, and the short-term funds are inevitable. The seller needs to find support.
Large sellers who sell or list new three boards can obtain financial support through banks; while sellers with insufficient capacity can hardly get money from banks. The main financing channel is the intermediate finance company. In the process, sellers need to provide sales receipts. Logistics data and other due diligence.
In addition, sellers can also make full use of financial support from cross-border e-commerce platforms and payment companies, such as Payoneer’s Wish prepayment service and Amazon prepayment service.
In addition to the financial problems facing her, another topic that sellers are paying attention to recently is the “Amazon Global Collection” service. For the addition of Amazon’s official collection, Steven is very optimistic: “We welcome more participants to come in and force the service providers to update their products. It is a good thing to make the service better, and it can make the industry iterate faster. ”