Is the asset-light model suitable for Amazon?

According to this definition, Amazon in the past few years was indeed a light asset model. Some sellers only needed a set of information, a computer, and one person to set up a store. The investment was not high, the return on funds was fast ( one cycle was 14 days), and the profit was considerable.

However, for some old sellers, Amazon, especially FBA, is a typical heavy asset model, because FBA requires investment in various links, among which advertising fees, payment and freight are more important. Of course, there are some other fees, such as return fees, promotion fees, etc. Especially under the policy of Amazon's continuous tightening of storage capacity this year, due to the good sales performance last year, many sellers have shipped a large number of goods this year, but Amazon's storage capacity policy has been tightened, and the overall market growth this year is not as good as last year, so many sellers' goods are pressed in the inventory, but in order to cope with the storage capacity restriction policy, sellers have to sacrifice profits as a premise to increase the store's dynamic sales in order to obtain more storage capacity, and then form a virtuous circle. But in this state, many sellers' costs have risen sharply, and the promotions are relatively large, so the profits are getting lower and lower, and the funds are getting tighter and tighter.

However, some small and medium-sized sellers operate within the controllable scope of funds according to their actual conditions, do not expand blindly, select products scientifically, and continue to carry out refined operations in certain sub-categories, and still achieve good results. This can also be regarded as a light asset model.

Another way is to use the overseas warehouse distribution model. There are generally two types of overseas warehouse distribution models: one is seller inventory distribution; the other is overseas warehouse independent distribution.

Seller inventory distribution is the seller shipping goods to the US overseas warehouse. If the inventory is piled up due to unsale of products, the overseas warehouse will help the seller distribute the goods to other sellers, thereby reducing the probability of unsaleable inventory and helping the seller increase sales faster.

The second type is self-distribution by overseas warehouses. That is, overseas warehouses find their own sources of goods, prepare their own goods, put them on their own systems, and let other sellers sell them. It is similar to domestic self-delivery ( FBM), except that the warehouse is transferred overseas. However, this type of overseas warehouse distribution does not require self-preparation of goods, nor does it have to worry about unsalable goods. Shipping and transportation are all handled by overseas warehouses, and most of the seller's energy can be invested in operations. Although this has achieved the so-called light asset model, this distribution model also has great disadvantages, such as uncontrollable supply chain, uncertain product quality, and troublesome after-sales processing.

In general, sellers should choose a business model that suits them according to their actual situation. Don't blindly follow the trend. For some sellers with insufficient funds, they can still achieve good results by taking steady steps and not blindly expanding. In today's situation of changes in various policy controls and uncertainties in the economic field, everyone needs to fear risks and act within their means.

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