Amazon's big seller fabricated 4.4 billion in inventory? The balance of tens of millions was frozen and cannot be recovered

Yesterday, Cross-border Communication issued an announcement stating that its subsidiary Global Easy Buy falsely disposed of inventory worth RMB 4.424 billion in 2020! Among them, the falsely increased operating costs were RMB 1.779 billion, and the falsely written-off inventory was RMB 2.645 billion!

First, Cross-border Communication formally responded to the news sent by Shenzhen Stock Exchange in the middle of the year, confirming that the situation was true and saying that it was to digest the inflated inventory. In terms of the unknown receivables that Shenzhen Stock Exchange was concerned about, Cross-border Communication said that about 36.25 million yuan of accounts receivable belonged to sales commissions and fees that had been deducted by overseas payment platforms, most of which were deductions from the Amazon platform. The remaining approximately 46.41 million yuan was affected by the event of Amazon sealing up Chinese sellers' accounts. After a large number of the company's store accounts were sealed, the funds in the accounts were frozen and expected to be unrecoverable.

This is just the data from last year. At that time, there was no such exaggerated wave of store closures as in the middle of this year. Cross-border Link had at least 40 million yuan frozen, which could not be recovered by appeal. If it were put this year, this number would be unbearable to look at.

However, the Shenzhen Stock Exchange is no pushover. After Cross-Border Link released an announcement last week, it quickly sent a letter of concern, questioning the fictitious 4.424 billion inventory and requiring Cross-Border Link to provide detailed information on the specific years and corresponding amounts of each false conversion into 4.424 billion inventory, and that full impairment provisions should be made in the corresponding years.

As for the situation that the balance was forced to be turned into bad debt due to the account being blocked, the Shenzhen Stock Exchange did not raise any questions. It seems that at least there is no problem with the amount of money frozen after the store was blocked. Last year, Cross-Border Link did experience a thrilling account being blocked and a large amount of funds being frozen. Although some of the funds were recovered through appeals, there is still more than 40 million yuan that cannot be recovered and has been written off as bad debts.

The intensity of store closures last year was far less exaggerated than this year, and most of the closures were due to store closures involving epidemic prevention products.

In the middle of this year, Amazon launched a large-scale store closure, which turned the industry upside down. Amazon closed a large number of stores of Aoji, Tongtuo and other major sellers. Hundreds of stores were affected and closed down, and only in the past two months have some stores been saved. So what happened to the stores that could not be saved? What about the store funds that have not been withdrawn?

First of all, there are stores. Amazon has sent rejection emails to many stores. Generally, if the balance is not much, there is no value in saving such stores. However, the amount of money to be withdrawn from some major stores with big sales is very scary. If they cannot get it back, it will cause the same situation as this time's Cross-border Communication incident, which will affect the normal operation of the company.

The major sellers whose stores were closed have jointly sued Amazon in order to recover their losses. Smartly, these suing sellers did not raise any objections to the closure of their stores. Instead, they started from the perspective of Amazon freezing the store balance and filed a class action lawsuit against Amazon, demanding that Amazon stop all misappropriation and abuse of sellers' funds and return the illegally and improperly withheld funds to the sellers.

Although this is a very troublesome and time-consuming process, it is also a helpless move after official feedback and complaints have been ineffective. However, there are not many successful precedents in this situation. I suggest that the affected sellers who have not yet restored their stores can wait for the results of the joint lawsuit by Aoqi and other big sellers.