Before I start writing, there is some news I want to share with everyone. Today, I am planning to replace the Doraemon avatar that I have been using for many years with a self-portrait made from my own real photo. I hope everyone won't get lost.
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How to face frustration#
If you knew me six years ago, at that time I made some achievements and looked down on all the operations in the market. Only my theory was right. I used to say to my boss, "If you think he's good, then let him come."
During the epidemic, my grandfather accidentally fell and passed away, and I was isolated and unable to see him for the last time. Amazon has also been declining year after year, and I started to become disillusioned and cynical. But when I realized that I couldn't change the outcome, I started reading books, studying history, continuing my education, cultivating interests, and even exploring the meaning of life through faith.
These experiences have made me more tolerant, peaceful, and even content. My friends often tease me and ask if I have considered becoming a monk. To be honest, I did have that thought, but later I realized that my cultivation was not enough, and I couldn't let go of my attachments.
Life is ultimately empty. Instead of leaving quietly, it's better to make a big fuss. All the lows and highs are just small episodes on the path of cultivation. Don't worry too much as long as you are still alive, everything else is trivial.
Fighting against the heavens brings endless joy. Enjoy this process.
Stuck in a quagmire#
Since the end of last year, the CPC (Cost Per Click) of Amazon has been rising, and the Amazon business unit I am in charge of has been hovering on the brink of loss. Until this year, with factors such as logistics costs, inventory allocation fees, and exchange rate declines, after the launch of a new product in May, the profit finally couldn't hold up and we have been experiencing continuous losses for three months.
From optimism in the first month, to confusion in the second month, to helplessness in the third month, in order to quickly turn things around, I started to analyze every link and advertisement in the operation. Starting from July, I set hard targets for the operation, restricting their replenishment permissions and advertising budgets. It wasn't until August that we managed to stop the downward trend, but it will still take some time to completely turn the losses into profits.
Through this experience, I realized a truth: don't let employees have too much freedom, and don't expect them to think too much. Instead, continue to improve the SOP (Standard Operating Procedures) and turn everyone into a brick, following the routine step by step.
It further reflects the dividend of the times. No matter how bad you do, it won't be too bad. With the company's resources, no matter how casual you are, you can still achieve good results.
In addition, I have a few pieces of advice for everyone, which I have emphasized several times:
About clearance: If the selling price is already at cost or in a loss, don't advertise it anymore, otherwise the losses will be greater. Choosing to clear inventory in bulk can still bring in some returns.
About launching new products: It is a paradox to lose money in the early stage of launching new products. If it doesn't make money after going online, don't continue.
About replenishment: It's better to be out of stock than to overstock.
About advertising: Don't advertise products with CPC exceeding 10% of the selling price.
About selling price: The cost given by the platform should be transferred to the consumers.
As the saying goes, the path that suits you is the most correct path. Don't blindly follow the trend.
Dealing with the future#
In the second half of the year, there will be peak season delivery fees, peak season warehousing fees, and continued depreciation of the exchange rate, as well as a bunch of new additional costs such as rising logistics costs. I can't afford it anymore.
So last month, I hired a product selection and development team, started to expand into other categories, withdrew from internal competition, cleared inventory, and then started raising prices.
No longer pursuing GMV (Gross Merchandise Volume), only focusing on net profit revenue.
Don't put all the pressure on entrepreneurship, for example, only invest 50% of your own cash and use 70% of the profits for reinvestment, and keep 30% as savings.
My new journey#
Next,
I will bid farewell to the training industry, but I will continue to provide free tutorials.
I will delve deeper into the study of history.
I will continue to insist on building a small and beautiful "brand" company.
I will also contribute some love within my capabilities without relying on others.
I will work with a group of like-minded people to build G26 and become someone with an annual net income of 5 million RMB.
At this moment, I am stronger than before.