Why do you say that cross-border e-commerce is a loss-making business? Why do you lose money?

Not everyone can make money in e-commerce. After all, starting a business is difficult. It is also difficult to run a business and operate. Especially in recent years, the epidemic has caused many industries to be in a state of continuous loss. Why do you say that cross-border e-commerce is a dead loss?

A big reason why many cross-border sellers fail is that their product ideas are wrong, not because of problems with their own capabilities and operations.

Before starting a project, it is easy to deviate from the direction and care about issues that are already far away. Many problems are not the most important problems that you need to solve first.

From a business perspective, no matter what business you do, there will be gains and losses, which is normal and logical. Who can guarantee that they will make money? If it is easy to make money, who would be willing to work?

Why do e-commerce companies lose money?

1. Low profit and low traffic

In fact, according to most data, those who suffer losses are always small and medium-sized novice sellers.

With the rise of online e-commerce platforms, profits are no longer high, and profits are often concentrated in the hands of the largest e-commerce companies. Large sellers quickly enter the market to seize the market, and the market is gradually saturated, which makes the purchase costs and profits of small sellers higher and higher, and the traffic is decreasing.

Why are popular products becoming increasingly difficult to sell? Manufacturers use hot topics to hype up prices, making the purchase price higher and higher, and the high costs mean lower profits.

Without price advantage, product advantage, brand advantage, or time advantage, it will be difficult to survive in such a large market.

2. Labor and inventory are key

Labor costs. Normally, an e-commerce company needs more than just the boss. Unless your store business is so bad that there are only a few orders a day, otherwise, it needs to have the most basic customer service staff, packaging and shipping staff, and other related staff.

The second thing is inventory. If you don’t have your own production base, it will be difficult to make a profit relying on inventory.

Normally, the inventory should be at least tens of thousands, or even hundreds of thousands or millions of goods. If you find that you can't sell them in the middle or late stages, these goods will be a heavy burden on your hands.

3. After-sales capabilities

It's simple. The quality of after-sales service in business is the key to whether customers are willing to come back.

Whether it is an offline physical store or e-commerce, it is essential to choose a good courier, update logistics, intervene in customer service and other services.

In general, cross-border e-commerce is a huge loss because some merchants fail to build up their stores and lose a lot of money, so they say that cross-border e-commerce is a huge loss.