Have you considered expanding into international markets on Amazon?
One of the benefits of the platform is that you have the opportunity to do so, perhaps growing your business beyond what you might expect by staying local. Amazon has ramped up its efforts to assist sellers with moving into international markets, possibly because the majority of sellers tend to stick with their own home country.
There’s often a perception that selling offshore is hard, and certainly, there are a few things you need to take into account first. What should you know about and consider before making the move to selling internationally? Let’s take a look:
Amazon’s international offers
First of all, there are a couple of different avenues offered by Amazon through which you can reach buyers overseas.
For current FBA sellers, there’s a simple way to reach international customers who might browse for products on Amazon.com – by taking advantage of FBA Export in your settings.
Amazon offers this at no extra charge to FBA sellers. Why? Because they charge international buyers for the extra shipping fees as well as customs fees and import taxes. The rates will of course vary depending on the location of the buyer. For some, this might mean that shipping and fees are prohibitively expensive, so they’ll probably only shop for something they absolutely can’t get anywhere more convenient for them.
Just like your regular FBA sales, international customers can contact Amazon Customer Service for questions or issues relating to their order. Amazon deals with returns or queries as they usually would for FBA sales.
Another thing that sellers should be aware of here is that products must be “exportable” to be eligible for inclusion in this program. There are various rules and regulations that can make exporting certain products difficult, so Amazon lets sellers know which of their products will be eligible. (See the image below to find them).
Amazon Global Selling
The Amazon Global Selling options take some reading over. As with anything where you’re venturing into international territory, the rules and regulations can be complex. Not only that, as they point out, you really need to consider whether you’re offering the right products to the right market. You’re not going to do well selling Blu-ray players operating on 110 – 120 volts with two-prong power cords in the European market, for example.
To begin with the basics of Amazon Global Selling, there are currently 11 possible marketplaces that Amazon operates in worldwide. These represent some of the most active ecommerce markets in the world. To sell in these marketplaces, you need to open separate seller accounts (for example, an Amazon.jp account for Japan), although Amazon also has some unified options.
(Note: At the time of writing this article, Amazon has not updated their Global Selling pages to include Amazon Australia, which launched in November 2017. The current word is that selling in the Australian marketplace is invitation-only, and sellers can express interest by filling out this form).
With an Amazon European Marketplaces account, you can sell from one account to all of Amazon’s European markets. These include The U.K, France, Germany, Italy and Spain (Amazon.co.uk, Amazon.fr, Amazon.de, Amazon.it and Amazon.es). The fee to operate this account is £25 per month, with a VAT (Value Added Tax) fee charged on top of that. You can also opt for an Amazon UK account only if you prefer.
A European Marketplaces account allows you to create listings across all 5 marketplaces without having to switch between accounts and duplicate the listing.
There is also an option to cover the U.S., Canada, and Mexico together with a North America Unified Account. While this provides you with a single interface to control what you sell and where, you do need to create a listing in each marketplace in order to sell there, meaning that unlike the European account, you will duplicate your work. The fees you pay for this account correspond with the marketplace in which you first registered to sell, however as you sell items, the fees on those are based on the marketplace in which they are sold. To set up a Unified Account, you’ll need a bank account based in just one of either the U.S., Canada, or Mexico.
What to consider…
While Amazon makes it as simple as a few button clicks to start selling in international markets, in reality, there are more considerations you need to make to determine if selling internationally is the right move for you. Here are just a few key points.
The requirement to sell in any international market is that you must be able to provide service in the local language. For example, if you’re selling on Amazon.jp, your customer support must be provided in Japanese.
If you’re not proficient in the local language of the marketplace you want to enter, besides hiring a native speaker to help you, your other option is to use Amazon FBA locally. This means that Amazon provides customer support in the local language.
You’re not completely off the hook though, there’s still the matter of your product listings needing to be in the local language too. You can try a translator tool to get that done, but there’s a good chance you’ll end up with the same problem you see when something has been badly translated into English. To ensure that your listing is professional for the international market, we’d suggest using a service where actual people do the translating, such as Gengo.
Consider what you’re going to do with questions or reviews in the international marketplace too – it will probably pay to have an accurate translator.
You could choose to fulfill orders yourself, in which case here are some things to consider:
- As you reside outside of the international country, you’ll be shipping each order internationally and will be the “exporter of record.”
- There is always a real risk of shipping or customs delays on international orders, meaning possible poor reviews.
- The buyer will possibly have to pay import duties to the carrier, which can result in a poor experience for them overall.
- International shipping can be expensive and you’ll also be responsible for customs duties and taxes.
In each Amazon marketplace, you also have the option to use FBA. If you do so, here are some considerations:
- You will be exporting bulk amounts of goods into an FBA warehouse in the international marketplace. You’ll have to pay for shipping, taxes, and duties, but shipping will be more economical overall for large numbers of sales, rather than sending lots of individual packages overseas.
- You’ll have to be skilled at managing inventory across different locations and marketplaces, whereas you might have a closer eye over it if you take the FBM route. (Note: Forecastly also supports these international marketplaces: Amazon.co.uk, Amazon.com.mx, and Amazon.ca).
- Using FBA in the international marketplace can reduce any surprises for customers when it comes to shipping costs or duties. They won’t be paying as much for shipping which may help your sales and make FBA a more attractive option. Prime members in the international market will enjoy the free shipping that comes with FBA.
Reviews and reputation
You start afresh in each new marketplace that you enter into. This means that the reviews and ratings you earned for the product on one marketplace don’t transfer to the next. You’ll have to work to boost your rankings and reviews in the new marketplace, just as you did for the current one.
Each new market represents a new set of laws when it comes to taxes and you’re going to have to figure out how to become compliant. For example, VAT (Value Added Tax) may apply to sales in the European marketplaces, while other countries have similar taxes, such as GST (Goods and Services Tax).
You’ll have to examine the specific laws that apply to the marketplaces you wish to enter. In some cases, even if you are selling to an international customer from your Amazon.com account, it’s possible that the laws of their country expect a tax to be paid. Usually, there are minimums involved before taxes apply, so make sure you’ve done your homework.
Amazon does provide some general tax information for each country in the marketplace in their Global Selling Guide, however you’ll have to do some digging into the details.
For U.S-based sellers, you also need to consider the tax implications for your business at home. The U.S. government considers international income to be taxable in most cases, so you need to ensure that you’re compliant. Your best bet is probably going to be to consult with an accountant or tax lawyer familiar with international business.
When you’re entering a foreign market, besides the tax requirements, there may be other legal aspects you need to consider. For example, you might need to register a business entity in the specific country.
It’s not just about following the rules and paying the right taxes though, doing business in international markets involves understanding the nuances of different business cultures. You can’t just automatically do what you’d usually do in your home country.
Cultural considerations aren’t just about the language being spoken, but how they might impact communication with customers and international suppliers. For example, perhaps you wouldn’t use the same marketing strategies and messaging in Japan that you do in the U.S.
Overall, you’re going to have to figure out how you need to adapt your approach and strategies to suit each market you enter.
If you’re ready to expand into international markets, Amazon provides you with a great vehicle for doing so. Primarily, you get to leverage the reach and reputation of the Amazon brand without having to spend a whole lot on upfront costs to enter a new market.
Will selling internationally be a wise move for you? It’s really going to be up to the individual to assess the requirements of these international markets and the position of their own business to discover whether it will be a worthwhile move.
Do your homework on the markets you are interested in and decide whether there is room for your products. Read through Amazon’s Global Selling Guide, but also be sure to consult with professionals where necessary.