At a time when most companies are using broad categories to conquer the market, Wormhole e-commerce “reverses” its approach. First, it starts to work hard on IT, and secondly, it accelerates the contraction of categories, so that the company's energy is more focused on superior categories.

Lay out IT on a large scale to prepare for cost reduction and efficiency
The founder's IT science and technology male attributes made Wormhole e-commerce attach great importance to IT at the beginning of its establishment. At the same time, they also forwardly realized that the quality of future IT systems will determine the success or failure of the cross-border e-commerce business. Therefore, in the second year of its establishment, Wormhole e-commerce began to deploy IT on a large scale, develop its own ERP full-process management system, connect back-office operations with supply chain, procurement, sales, and storage, user systems, etc., and carry out monitoring and analysis to save manpower and overall efficiency.
By 2024, the IT system development of Wormhole e-commerce is quite mature. Eight years of practical experience in cross-border e-commerce have brought their IT strategies closer to the business, and can improve business efficiency and labor efficiency in terms of product selection, advertising automation, and execution automation. For example, in the development of product selection systems, Wormhole e-commerce has been able to implement various functions such as market analysis, analysis and testing categories, monitoring keyword rankings, BSR rankings, competitor rankings, and general monitoring, providing a solid foundation for digital operations.

Qiu Linfeng R&D Center Department Manager
“When it comes to designing new products and maintaining old products, we tend to use digital operations. For example, when inventory reaches a certain level, our prices can be adjusted automatically based on market prices and gross profit prices. Alternatively, if the average daily sales volume has decreased over the past seven days, the system may automatically adjust the price from $15 to $14. In terms of product selection, the system automatically grabs data to analyze particularly fast improving products in this category and analyze customer preferences. Abbottt, Premiere Creative’s creative director.

Shrink categories and make cross-border business more refined
At the end of 2019, when the overseas e-commerce business was in a golden period of development, and many sellers entered the market one after another and expanded their categories, Wormhole e-commerce made an important decision — to shrink the category. Seemingly contrary to others, Wormhole actually selects categories, deepens categories, and expands categories based on US market capacity and customer needs. They think they can never make enough money, but the money they can invest is limited. They must consider the efficiency of the use of capital, the explosive product model, and maximize the absolute value of a single SKU to become the market leader in order to develop better.
Focusing on the concept of “family life,” Wormhole e-commerce positioned major categories of household goods, and at the same time created a product line based on selected categories such as indoor home, bedroom home, and furniture for lifestyle scenarios, and eventually formed five major advantageous categories of home, stationery, party, DIY, and kitchen. After the pandemic, the performance of these categories all increased simultaneously at a higher growth rate than the general market.

In addition to shrinking categories and expanding IT on an unusual path, Wormhole e-commerce is also bucking the trend in terms of complex supply chain management and emerging from its own new characteristics!

Casting machines, packaged production lines
Cooperate as an “investor”: wormhole packaging production lines, investment machines, investment training, suppliers provide site, labor, and technology. Under such a “two-way movement”, Wormhole e-commerce products and supply chains are guaranteed to be more stable, more time-efficient, and of higher quality.
● Investment machine: Wormhole e-commerce is deeply tied to the factory in Hebei. In order to meet the needs of customers in the US market for party and home lifestyle products, Wormhole E-Commerce invested in 80 machines in the factory to ensure the supply of products while sharing the factory's cost pressure.
● Investment training: After the machine is put into operation, how to effectively manage the increase in workers is also a problem. Therefore, Wormhole e-commerce will send a quality inspection team to the factory to provide training, such as how to ship in line with Amazon's specifications, how to label, how to pack boxes, how to arrange on-site equipment, how to make wiring safer, etc. In order to ensure product quality, Wormhole e-commerce will install cameras on production lines, remote monitoring, and regular inspections.
● Contract industry belt: With the expansion of business volume, one factory was far from being able to meet Wormhole's supply needs, so Wormhole began experimenting with another model, cooperating deeply with the industrial belt to integrate and transform the resources of many factories in the industrial belt, so that the product quality was more in line with Amazon's specifications and could better meet customer needs in the US market.

Expanding the layout and recruiting talents
With the development of the business, Wormhole e-commerce began to set up warehouses in Changzhou and set up branches in Nanjing, Shenzhen, Hangzhou, and Yiwu to attract people with knowledge of cross-border e-commerce. At the same time, the talent structure of Wormhole e-commerce is also constantly being adjusted. After the product R&D center was established in 2023, the demand for product structural engineers, design, and various R&D talents increased dramatically.
For example, plastic products generally have the problem of “material odor”. Wormhole e-commerce cooperates with Changzhou University to conduct scientific research, adjust the plastic formula, change the taste problem, and upgrade the product from the raw material side. In order to reduce storage and logistics costs, Wormhole e-commerce has also been studying the structure, packaging, process and materials of household products, and continuously improving product packaging in accordance with warehousing and FBA packaging rules. This requires the introduction of a large number of professionals.

Close to the supply chain and deeply cultivate the product line
In terms of quick product selection, Wormhole e-commerce also has an outstanding record. Wormhole e-commerce has also set up a branch in Yiwu. As soon as there is demand, you can immediately find a supplier, which is very efficient. Miu Shanshan, project manager at the operation center, said, “Front-end customers need some kind of new product or accessory, and we can find it right away. Abbottt, Premiere Creative’s creative director.
There are many SKUs for home lifestyle products and party supplies, and combinations are ever-changing. In order to further increase growth in 2023, while deepening existing categories, Wormhole e-commerce drastically introduced new products. The number of SKUs increased by more than 2 times. The number of SKUs increased by more than 2 times. The difficulty of product development and supply chain coordination is imaginable. However, the efficiency of Wormhole e-commerce is astonishingly fast. Being close to the supply chain and having your own proofing workshop is the secret. Take balloons as an example. For the new product development process of an average enterprise, it takes about 2-3 days from market analysis to plan output; then, the back-end finds a supplier to produce the product, then designs and packages it takes 7-12 days; then determines the sample and factory and then discusses the price; and finally, it takes 7-15 days to go through the process and upgrade. For Wormhole e-commerce, the plan can be made in half a day, and project personnel can go to the company's own sample room to finalize requirements such as size and packaging design; then they can complete the packaging design and production in the company's own proofing workshop, and finally deliver the new product — the whole process only takes 2 days!

Doing cross-border e-commerce requires careful calculation to control and optimize the costs of products, logistics and warehousing, overseas marketing, etc. What are the secrets of wormhole e-commerce?

The first seller on the Amazon market to use vacuum to ship household products
Miu Shanshan Operation Center Project Manager
“Home and lifestyle products are low customer unit price products, and warehousing and logistics costs account for a high proportion of the cost structure. Our team has been studying how to improve packaging and reduce size to reduce costs and increase efficiency. We have tried many things. In the end, the vacuum pumping method was successful. Abbottt, Premiere Creative’s creative director.

How to pump vacuum more smoothly and how to pump more efficiently is a major problem. To this end, Wormhole e-commerce is also building its own factory in Changzhou to better control the process of vacuuming product packaging. Facts have proven that after vacuuming, the volume of household products was reduced by about 1/2, which not only saved logistics costs, but also reduced packaging costs by $2/piece.

Embed AI into homegrown systems
The popularity of generative AI has brought great opportunities to the Wormhole e-commerce workflow. Wormhole e-commerce embeds AI functions into the company's IT system to enable AI copywriting assistance, AI operation, AI design, etc., to help operators write product-related copywriting (title, description, etc.), product design (bibliography, etc.), auxiliary correction, and summary product evaluations, etc., greatly reducing operating costs and improving labor efficiency.
AI is also a big help when it comes to automating the execution of systems. For example, the replenishment process is actually a process connecting operation and the supply chain. Starting from the plan, the system will first calculate how many products will be replenished for each product this week, trigger a replacement order process, and then push the process down to the purchaser on the supply chain side. After determining how many days delivery will take through the inquiry period, the process is pushed to the operator for confirmation. The entire process is automated, which can avoid more wasted labor costs.

Since its establishment, Wormhole e-commerce has been working hard on the C-side and is deeply involved in Amazon's US site.
In the process of going overseas, Wormhole e-commerce also received support from an exclusive consultant for Amazon Seller Growth Service, who regularly summarizes data, compares Wormhole E-commerce's own operating data with the market, and provides more constructive suggestions for operation optimization. The exclusive consultants of Amazon Seller Growth Service assist Wormhole e-commerce's operation team and IT team to optimize and better reflect Amazon's underlying logic such as product selection and inventory management through the IT system, thereby improving the overall level of operation management.

Miu Shanshan Operation Center Project Manager
“The exclusive consultant for Seller Growth Service will remind us to avoid risks in advance. We have established a regular communication mechanism between us, and the exclusive consultant for Seller Growth Services will give us many operational suggestions. For example, we launched a lot of new products last year, and we are very worried that sales estimates will not be accurate during the promotion period, and there will be backlogs and outages. Our dedicated Seller Growth Service consultants will assist our operators in inventory planning. Not only did we get a 10x + increase in sales during Prime Day, but our inventory estimates didn't deviate by more than 3%. Abbottt, Premiere Creative’s creative director.

In the future, Wormhole e-commerce will follow the brand line, create advanced gameplay in terms of category focus, off-site drainage, and brand tools, and launch an impact on 10 billion dollars. The first stage is to achieve sufficient volume to obtain a certain market share and category exposure. The second stage is to use Amazon's weight on brands and make good use of exclusive tools for brand sellers to improve internal brand operation skills in data analysis, image presentation, user operation, etc., and improve operational efficiency, depth, and repurchase rate.

Impact of 2 billion in 2024
In 2024, the cross-border e-commerce industry will continue to maintain a rapid growth trend, but it is also facing the challenges of continuous decline in channels and prices, fierce competition in delivery timelines, and the rapid rise of emerging markets. Deepening the website, focusing on boutique categories, and building brand advantages is essential for sellers. With its natural “backbone,” Wormhole e-commerce has embarked on a path of development and achieved annual sales of more than 1 billion dollars in the US market. Currently, they are attracting a wide range of talents, continuously optimizing processes, and innovating advanced e-commerce styles. They look forward to working with Amazon to hit the 2 billion target in 2024 and become a 10 billion cross-border e-commerce company in 2028.