Seller introduction
■ Main products: slippers
■ Operating sites: Amazon US site, European site
■ Business record:
● Twenty years ago, a small traditional foreign trade slipper enterprise successfully transformed into a cross-border upstart, selling 5,000 pairs in the first quarter!
● The Amazon business accounts for more than half of the 2-year turnover, and the product gross margin is 15% higher than the original OEM business!

The past 30 years ago were an era of rapid development in China's foreign trade, and a golden age for many foundries. The spring breeze of reform and opening-up caused Chinese manufacturing to blossom from a small wave, and eventually set off a huge wave of “Made in China.” Like China's tens of millions of traditional contract processing foreign trade enterprises, Dongxin Company, where general manager Zhang Feng is located, also got involved in the foreign trade business at this time, started a B2B OEM business for slippers products, mainly in the European and American markets, and obtained its first pot of gold.

The opportunity
As an old foreign trader, he faces the international situation and business policy adjustments every year. Mr. Zhang is used to adjusting products and prices in stages to adapt to cyclical international policy fluctuations, but starting in 2015, the traditional foreign trade industry, which he thought would continue to grow, began to weaken and shrink, and the gradual decline in gross profit visible to the naked eye in foreign trade orders made him gradually become anxious. At first, he hoped for an improvement in the industry, but what he waited for was continuous price pressure from customers, and competition intensified. Until 2018, when several ultra-low gross profit orders left the factory with no net profit after deducting operating costs, the factory and team were under unprecedented pressure to survive. At this point, Mr. Zhang deeply felt that the entire OEM foreign trade export had entered the “marginal profit” era. The risks and difficulties of operation were often not directly proportional to the company's revenue. The situation in the traditional foreign trade industry would become more and more difficult. Enterprises must make strategic changes and find new tracks. At this point, he noticed the path of cross-border e-commerce.

Now it's really not easy to think back to taking the first step in the transformation to cross-border e-commerce. From coming into contact with the concept of cross-border e-commerce at the end of 2018 until its final launch in 2019, Mr. Zhang also had an ideological struggle for nearly a year.

Zhang Feng said, “We don't have as strong capital as big companies, Fengji's talent and team choices, and support from various resources; we have to explore everything ourselves. "

For a foundry that has been focusing on traditional foreign trade for more than ten years, it has changed from a familiar circuit to a new business model, not understanding e-commerce platform rules, international market trends, unintelligible suitable entry platforms, and lacking corresponding talents and teams. Facing these current difficulties, Mr. Zhang did not have any struggles or hesitation at the time, but he understood one thing in his heart. This is a path that must be followed.

At the beginning, the boss personally brought it!
When it comes to cross-border matters, Mr. Zhang insisted on doing it himself in the early stages of the transformation. Mr. Zhang has seen that many owners of traditional businesses around him have a mentality. They want to become treasurers by digging up people or operating on behalf of others. He thinks that as long as I find the right person and license them all, I can do a good job in this business, but most of the subsequent development is not ideal. Mr. Zhang's philosophy is: Cross-border business is the boss's business, and we must go forward with ourselves!Because the e-commerce industry is changing so fast, what kind of talent should be used? If the boss doesn't personally participate in the business to understand the business, it is difficult to tell who the real talent is, so make good use of the talent. On the other hand, traditional transformation companies have a relatively fixed business structure and resources. If cross-border e-commerce wants to do well, what they need is overall resource collaboration. Only when the boss does it himself will employees pay attention to cross-border e-commerce, and the entire company's resources can be mobilized, and success is possible. As a result, in the early days, Mr. Zhang let go of his previous traditional foreign trade mentality and let go from scratch. He soon grasped a series of knowledge and general business conditions of cross-border e-commerce. By combining the logistics and factory resources of his original foreign trade team, plus key operating personnel recruited from abroad, he soon formed a 3-4 person cross-border business commando team. Precisely because he is the boss and knows the direction the company wants to develop in the future, Mr. Zhang did not hesitate to choose Amazon as his starting point for cross-border after establishing his own brand based on high-quality products to obtain bargaining power and higher premium space.

Through Mr. Zhang's personal participation in R&D selection and overall promotion, he received resource support from the entire company. This cross-border advance team quickly completed a series of actions such as product selection, Amazon entry, and listing sales, and rushed to sell the first batch of products at the end of 2019, and achieved surprising results. Due to rapid progress, timely delivery, and getting on with the season, the average number of sunrise orders in the first season was around 300, and they soon sold out all of their first batch of 5,000 slippers. This gave them great confidence and encouragement. As a result, the team continued to develop and mature through continuous review and continuous run-in. After two years, Amazon's turnover has accounted for more than half of the company's overall sales, and this share is still expanding. The most gratifying thing is that the product's gross margin is more than 15% higher than the current B2B OEM business, which makes Mr. Zhang feel even more that he is on the right path!

Control quality, focus on R&D, and avoid infringement!
Control the quality!
For traditional factories, Mr. Zhang's previous production line allowed a defective rate of about 3%, because this was within the acceptable range for foreign trade dealers. The difference in cross-border business is that the product will directly reach the end user, and the user's feedback on any defective product is likely to leave a review on your link, which is a blow to every link.
Therefore, Mr. Zhang said that his requirement for a defective product rate on the production line is 0%. Strict quality control has also enabled Dongxin to win good reviews from consumers through high-quality products and maintain a stable number of orders.
Focus on research and development!
For Zhang Feng, now that he has decided to cultivate the brand, he must adhere to high standards in product development. Having worked in a factory for more than ten years, he knows very well that the cost can vary several times when the raw materials are different. For small and medium-sized foreign trade enterprises, in order to grab orders, press each other's prices, and finally cut corners on raw materials to reduce costs in order to compete at low prices.
Avoid infringement!
At the same time, for Chinese proxy processing companies, they don't have a strong sense of design patents, and it is easy to fall into the plagiarism situation, and when it comes to copyright supervision, the penalties in Europe and the US are very strict. Mr. Zhang's team initially had a certain degree of similarity and was sued by the other party. Although it was later adjusted and settled, it also brought great excitement to the team.

According to Zhang Feng, cutting corners and competing at low prices is not a long-term path for small and medium-sized enterprises. What he wants to do is a small but beautiful business. Through cross-border e-commerce and Amazon, he needs to control the premium space with quality and brand. Zhang Feng uses a design team that combines foreign style design with domestic fabric design. He is very careful in design and development, conducts real-time research on foreign consumers' preferences in fabrics and colors, and continuously improves the style. He insisted on choosing quality fabrics. Even if the cost was sometimes higher, he was unwilling to choose relatively poor materials in order to earn more money. This enabled their products to gain natural traffic and a fixed customer base, reduced the return rate, and gradually increased the repurchase rate, which helped the team build confidence when preparing the goods.

Run fast and seize the cycle!
For small and medium-sized enterprises, the amount of capital is not as strong as that of large enterprises. This is an unavoidable reality, so in terms of preparation methods and cycles, Dongxin has found its own set of methods.
1. Amazon FBA requirements need to be kept in mind. The packaging size of cross-border products is very important to reduce logistics costs. Unlike traditional foreign trade packaging, the difference in cross-border packaging is a millimeter, and each product may cost a few US dollars more in shipping.
2 For new models, flexible integration, small order fast run, the factory is divided into large cargo lines (traditional B2B and mature cross-border products) and small batch lines for new cross-border products. The two are operated by a flexible combination of the two. New products are tested in small batches first, and then large orders are continued after the link is stable.
3 For some highly seasonal slippers, you must schedule production plans 2-3 quarters in advance. For example, winter slippers must be shipped one quarter (September) before the peak season of Black Five Network. It is important to pay attention to Amazon's storage time and store ratings. At the same time, use FBA and overseas cooperation to control sales rates.
Remembering the development of the past few years from a traditional foreign trade factory to cross-border e-commerce, Mr. Zhang was very impressed. Perhaps the hardships, hard work, and training were invaluable memories for him and his team members in his life, but he is very thankful that he made the right choice.

Zhang Feng said, “Small and medium-sized enterprises have less financial resources than large enterprises; it's not scary. If you have confidence in your products, not with the mentality of making quick money, but are developing in the direction of building brand depth, then the cross-border e-commerce market and Amazon must be your new racetrack choice!"