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Amazon enters, and what?

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A few weeks ago, many people were startled to read the news that a Vietnamese broom was being sold for 20 USD on Amazon, 10 times the price commonly seen in markets. Before that, there was news that fresh banana leaves cost half a million a leaf on Amazon.

And these news reports do not forget to take a look at this world’s largest online marketplace to quote some Vietnamese specialties, which are 6-10 times higher than domestic prices, such as coffee filter (10 Dollar), High Gold Star ($ 8.5) …

Seeing such a potentially terrible interest rate, try asking no one who does not intend to open a store on Amazon to get rich and until the weekend before a Vietnam e-commerce event with the participation of itself. Amazon, let’s ask who doesn’t care. Believe first, news later is a coincidence or not, who knows.

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Before this event, many people mistakenly thought Amazon was entering Vietnam, meaning that Vietnamese people can now go to the website of this famous online retailer, buy goods and wait freely for home goods. In fact, this time Amazon came in to show Vietnamese manufacturers and retailers how to open online stores on Amazon, such as selling specialties such as brooms, coffee filters, Sao Vang or a dozen. thousands of other unique products of Vietnam for the world market, especially for the market of several million overseas Vietnamese. Even though Amazon is the retail giant, half of all merchandise sold (about $ 132 billion a year) is made by third-party retailers, using only Amazon’s infrastructure as wholesale markets; Amazon collects a fee to rent the booth.

Suppose we search for Vietnamese coffee, we find Trung Nguyen coffee products but sold by Kah-Mart and operated by Amazon; or Phu Quoc fish sauce sold by a strange place. If the familiar Vietnamese brands are sold by the owner on Amazon, the huge sales benefit is that the brand promotion benefits are equally great.

Currently, documents on how to sell on Amazon are everywhere on the Internet, just research, research, opening a store on Amazon is not difficult. The problem is the risks to note and the State’s behavior in the face of this trend.

Perhaps at first, the State should not think about trying to collect taxes or manage this form of sales right away. The more people who go to Amazon to sell goods, Vietnam sees it as increasing exports. Previously, large manufacturers had to rely on intermediaries to penetrate markets in other countries, but now they have direct sales channels. Small manufacturers who had not previously expected to bring their products to the world can now set higher expectations at lower costs. The shipping can be delivered to Amazon using the FBA (fulfilled by Amazon) method, which means delivery to Amazon first, when someone buys, Amazon will sell according to their distribution channel, collect money, Amazon deduct the cost then pay to the seller later. In fact, when the Vietnamese selling community on Amazon was large to a certain extent, the domestic market was also an attractive channel because Amazon was also a wholesale market like Lazada or Adayroi …

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It is the following scenario that causes the fear of tax revenue loss on Amazon purchases to become more and more massive. I feared that at that time there would also be arguments like Amazon only manages the market, does not sell goods so there is no obligation to pay taxes, then Amazon ships from its warehouse so it is responsible for paying taxes … Amazon is also a hot topic in many countries, for example, in the US, Amazon only pays tax on goods sold by themselves, while third party products, they tell the states to keep claiming from sellers. President Donald Trump calls Amazon a “tax-free monopoly,” also because Amazon boss Jeff Bezos is also the owner of the Washington Post often strongly criticizes Trump.

The taxation of big companies like Amazon, Facebook, Google, and Apple has been agreed to find the best method together by 110 countries, which will probably be done before 2020 with a new tax, temporarily called “digital tax”. While waiting there to nurture the environment for domestic people to sell to the world through Amazon, it will be a hundred times more profitable than the expected tax.

Don’t think about selling brooms to get rich. Just think of Amazon as one more channel to sell, not put all your eggs in an Amazon basket.

However, thinking also needs to warn about the risks that Amazon sellers may face to avoid such a situation as borrowing money from banks to buy cars running Uber or Grab, now the debt is still repaid. Amazon is a giant, so “crossing the river is forced”, if you want to sell goods on it, you must ask (especially the items that people often sell such as clothes, shoes, bags), the money to wait and compete will be very intense.

The biggest risk is that after investing money to maintain a large store on Amazon, signed many contracts to buy raw materials, materials, and organize a large-scale production, one day, Amazon suddenly announced. ban your door. At that time, you will hold a bunch of unsold goods and just cry. According to many retailers on Amazon, the reasons for Amazon to lock their accounts are varied and very easy to happen. For example, a competitor hires a “negative feedback” service on your product or only needs out of 10,000 products sold, about 10 products are reported as damaged, the user is not satisfied, said to have If you get tricked, the chance of Amazon making a hand is very high.

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From there, another risk arises: sellers on Amazon must strictly adhere to a return policy if a buyer is not satisfied. If the error is not caused by Amazon, the seller must bear the cost of receiving the item, refunding the customer. Since then, the abuse has arisen, users just order, finish trial and then return the product, ask for money. Not all buyers are the same, but only a few cases, if the seller is angry, the reaction will easily be locked out of the account.

The marketplace in the world is complicated; The marketplace in the virtual world is more complex with spells such as copying products, creating fake demand, buying and paying in bulk …

So, do not think about selling brooms to get rich. Just think of Amazon as one more channel to sell, not put all your eggs in an Amazon basket and if you have a good strategy, it will be a very effective channel.

Nguyen Vu
* Source: Saigon Economic Times

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