Is it true that cross-border e-commerce can lead to huge losses? Why do you lose money?

Starting a business is not always smooth sailing. You will encounter many difficulties and setbacks along the way. The question is how you solve it and whether you can overcome the obstacles and find a way out. Is it true that cross-border e-commerce is a dead loss?

Not all

Why does cross-border e-commerce lose money?

There are two main factors that affect cross-border e-commerce's losses: cost advantage and product characteristics. Cross-border e-commerce has chosen relatively low-cost products from the beginning, so its product cost advantage is prominent.

For example, many people abroad believe that Chinese people know how to enjoy life the most and that we do not need too many material enjoyments, so we spend a lot of money on buying foreign goods, which creates a great cost advantage.

Most of the products exported by China are marked with prices for domestic sales instead of export. Since the sales prices abroad are much cheaper than those in China, an imbalance may occur in the international market. This imbalance may cause the prices of Chinese products in the international market to be lower than those abroad.

Therefore, cost advantage is one of the important competitive means of cross-border e-commerce, which helps Chinese companies gain huge competitive advantages. However, this advantage is relative and is subject to many conditions.

However, since cross-border e-commerce is unregulated, trade barriers no longer exist, and it is facing increasing competitive pressure, so its advantages no longer exist.

Today I want to discuss with you the three factors that affect cross-border e-commerce losses. First, the competitive environment faced by cross-border e-commerce. Cross-border e-commerce has an obvious low-price competitive advantage, and behind the low-price competition is more intense competition. In the face of low-price competition, Chinese cross-border e-commerce is difficult to challenge international brands in Europe and the United States, and it is inevitable that they will lose money if they lose in the low-price competition.

The second factor is political. Due to the differences in culture, religion, and legal systems, countries have different attitudes towards cross-border e-commerce. Countries also have different regulations on cross-border e-commerce. Taxing cross-border e-commerce will dampen the enthusiasm of e-commerce companies, thus affecting the development of cross-border e-commerce.

The third factor is the operational factor. If a cross-border e-commerce company fails to achieve its operational goals, it will not be profitable no matter how much it invests or how much traffic it has. Most cross-border e-commerce companies now make losses before they make profits, which means that in the process of cross-border e-commerce operations, they only pay costs but do not gain anything, so they cannot make profits.

In general, it is not always true that cross-border e-commerce makes a lot of money. There are also many businesses that make a lot of money in cross-border e-commerce. There are many factors that lead to losing money, all of which are introduced in the article.