Seller costs have skyrocketed

Logistics costs seem to be getting higher for sellers.

 

UPS, one of the world’s top three logistics giants, recently issued a notice saying: “Effective December 26, its average rate for all air, ground and international services will increase by 5.9%.” In addition, UPS’s peak season surcharge is also coming as usual, UPS said: “There will be a peak surcharge from October 1, 2023 to January 13, 2024.”

 

It is worth mentioning that UPS’s peak season surcharges will be higher this year than in 2022. UPS said it chose to raise prices because it will help it continue to expand and enhance its ability to provide customers with higher quality service. However, for many cross-border sellers who use UPS services, this means that their logistics costs will continue to rise.

 

In fact, in recent years, many markets continue to be affected by high inflation and various uncertainties, the market volatility has intensified, the operating costs of giants have increased, and a number of costs including logistics have ushered in frequent increases, which is the general trend, sellers have no choice. Just like today, when UPS announced the increase in package rates, FedEx, Amazon and other logistics giants are also frequently.

 

According to reports, FedEx has recently announced that it will increase the rate of domestic services and U.S. import and export services by 5.9% from January 1, 2024, while FedEx will also start to impose peak season surcharges from October 2. Amazon, needless to say, issued an early notice of 2023 holiday peak delivery fees.

High cost

During the peak season last year, the cost problem caused by a number of fees that were announced again and again was like a nightmare hanging over the hearts of sellers.

 

“It has risen three times a year! The profit is getting lower and lower, the volume is getting worse and worse, and I am ready to change my career.”

 

“We have no choice but to consider raising commodity prices to offset the upcoming cost increases ahead of the crucial holiday season.”

 

“These practices are making life worse for families who are not rich… Some of the run volume products are not even 0.35 profit, originally said to rise a little, the result of Amazon almost half my life.”

 

As many sellers have joked, many giants, including Amazon, have frequently raised fees, which will lead to soaring costs for sellers, which in turn will seriously erode their profit margins. In this context, sellers want to keep profits, they have to choose to increase the selling price of goods, but at the same time sellers can not escape the brutal competition between peers, increasing the selling price of goods will weaken the competitive advantage.

 

For example, last year in the United States market with the arrival of Halloween, black Five, Christmas and other heavyweight promotion, the growth of seller traffic and single volume is indeed better than the off-season. But at the same time, a number of fees for giants such as Amazon have also ushered in a series of increases. In order to improve storage utilization, Amazon has raised logistics costs several times, which has directly led to increased costs for sellers.

 

However, last year, the US e-commerce market was also affected by high inflation and other factors, and most US consumers have reduced unnecessary spending, and their sensitivity to commodity prices has soared. In order to meet the changing needs of consumers, Amazon, Walmart, Target and other retailers continue to expand the layout of low-priced goods, and those almost at the bottom of the food chain small and medium-sized sellers are afraid to easily raise prices. In this context, the pain and pressure brought about by the rising cost of goods are more obvious.

 

From the perspective of the general trend, the situation of platform cost increase, logistics cost increase and fierce market competition has been irreversible, so in recent years, many sellers have begun to seek new ways, and explore diversified sales channels has gradually become a new trend. However, while actively looking for a way out and expanding the potential market, sellers also need to strive to enhance their competitiveness, constantly optimize products and optimize costs, and the road to gold mining can go further.