In 2026, the cross-border e-commerce industry is undergoing profound changes, and gross profit falling below 5% has become a dilemma faced by many sellers.
In the past, people thought that the bigger the cross-border e-commerce business was, the more profitable it would be. But the truth today is that the bigger the scale, the faster it dies; more than 100 million in revenue is not as good as millions in profit.
Recently, I have had in-depth discussions with more than a dozen cross-border sellers and found that whether they are 5-year veterans of Amazon or newbies who have just joined TikTok Shop, they all complain that the gross profit is as thin as paper, and all they earn is hard-earned money, and even the busier they are, the more they lose.
As a leading cross-border seller, Aoji’s profits fell by 70.2% in the first quarter of 2026; 72% of sellers’ gross profits fell below 5%, and after deducting various costs, they basically did nothing or even paid back; some sellers had hundreds of millions in water on their books, but their net profits at the end of the year were not as good as those of small studios.
The golden age of cross-border e-commerce has long ended. The barbaric growth model of making money by relying on information gaps and selling goods will come to an end in 2026.
The end point of the industry is no longer “bigger”, but “more refined, more stable and more profitable”.
The systematic collapse of gross profit margins is the main problem facing the current industry.
2015-2020 is the “profit-making period” of cross-border e-commerce, making money easily by relying on the dividends of information differences.
But starting in 2023, the situation has changed.
In 2026, gross profit will usher in a systematic collapse, mainly affected by three major blows: First, the information gap has completely disappeared, and the price war has reached no bottom line. The unit price of customers in the European and American markets continues to decline, new sellers continue to pour in, and profits are infinitely diluted; second, costs have skyrocketed, with advertising costs, compliance costs, logistics and raw material costs increasing, constantly eating into profits; third, platform rules have tightened, and the distribution model has been comprehensively suppressed. Large scale has concentrated risks, and financial risks have become more prominent.
In 2026, the watershed for cross-border e-commerce has arrived.
90% of sellers who rely on scale expansion and low prices are being eliminated; sellers who build brands and engage in refined operations have tripled their profit margins and increased their orders by five times.
Industry data shows that the gross profit of 72% of sellers has fallen below 5%, 80% of platform traffic is tilted towards brand sellers, and 90% of European and American consumers only recognize brands but not low prices.
The real end point of cross-border e-commerce is not to be “bigger”, but to establish an “irreplaceable moat”.
It is necessary to move from “selling goods” to “building a brand” and get rid of low-price involution; from “dependence on the public domain” to “precipitation in the private domain” to grasp the initiative of users; from “extensive expansion” to “refined operation” to maximize profits.
For cross-border sellers in 2026, the guideline to break the situation is to give up the obsession of “getting bigger” and do three things well: first, cut off ineffective scale and focus on vertical categories; second, stick to product differentiation and refuse low-price intrusion; third, put compliance first and build its own channels.
Cross-border e-commerce has developed for more than ten years, and times have completely changed.
In 2026, don’t be obsessed with “making it bigger”. Scale is not the goal, making money is; expansion is not the end, stability is.
In an era when gross profits are getting thinner and thinner, we should be less impetuous and more settled; less expansion and more deep cultivation.
Small but precise, precise but profitable, is the ultimate answer to cross-border e-commerce.
