Is Your Amazon Business Ready to Go Global?
by Catie Grasso, on July 12, 2018
In this guest post, Catie Grasso of Feedvisor explains the opportunities associated with expanding your Amazon business internationally.
Global cross-border eCommerce sales are expected to spike up to a whopping $1.18 trillion in 2021. Amazon’s VP of International Marketplaces and Retail Eric Broussard stated that over a quarter of the global revenue generated by sellers on Amazon in 2017 came from cross-border sales and it will be no surprise if that number increases this year.
Both of these impressive statistics illustrate that more and more sellers are beginning to see the value in diversifying their Amazon business overseas. Results from Feedvisor’s State of the Amazon Marketplace 2018 report revealed that nearly 37% of surveyed merchants are currently selling outside of the U.S. and an additional 26% have plans to expand outside of the U.S. in 2018.
When Amazon sellers have fortified their local presence, many take the next step to expand their business abroad in an effort to increase product or brand visibility and conversions. Currently Amazon has 13 marketplaces around the world: the United States, Canada, Mexico, Brazil, the UK, Denmark, France, Italy, Spain, Japan, China, India and Australia. Sellers can take advantage of any of them through Amazon Global Selling.
With over 175 fulfillment centers worldwide, it is clear that Amazon’s geographical footprint is vast and will continue to expand. Before you choose what products you are going to sell abroad, it is important to understand that global selling models are not one-size-fits-all but rather need to be customized based on your individual business makeup and the marketplace that you are interested in entering.
- Do some research to determine which marketplaces make sense for your business. Understand the opportunity, potential demand and local customer preferences. You can also identify any potential gaps that your products can fill.
- Understand international fulfillment requirements, such as import/export regulations, and determine if Fulfillment By Amazon, Fulfillment By Merchant or Seller Fulfilled Prime will be the right fulfillment method for this aspect of your business.
- Familiarize yourself with international VAT rates. VAT, or Value Added Tax, is a tax that VAT-registered merchants add to the price of the goods they sell and pass on to the national tax authorities when filing their tax returns. In order to avoid unforeseen issues down the road, it’s important for sellers to quantify their VAT costs prior to engaging in FBA abroad, in order to make sure that they can price competitively in the markets where VAT compliance is required. The main factors that determine if you are required to register for VAT are your business’s country of establishment, the location of your inventory and your sales level.
The Benefits of Expanding Overseas
When diversifying where you sell your Amazon products, your product reach and discoverability will increase dramatically. According to Feedvisor’s Amazon User Study 2018, 85 percent of Prime shoppers visit Amazon at least once a week and nearly 50% make a purchase at least once a week. FBA grants sellers access to these Prime users, Amazon’s most loyal customers around the world. Sellers can navigate low sales periods in their "home country" by taking advantage of peak seasons in other countries.
Next, when you sell on Amazon you get to experience the consumer trust that is associated with the Amazon brand name without having to provide the upfront, fixed costs of building recognition of a store and items on their own in a new sales environment. Known for their intricate and efficient fulfillment and delivery logistics, sellers will be able to leverage Amazon’s brand overseas when tapping into a new customer market. Additionally, Amazon has a currency converter tool for sellers that allows them to receive the proceeds of their earnings into their local bank account if that account is located in a different country or region from the marketplace on which they are selling.
Lastly, with FBA, sellers can take advantage of Amazon’s customer support in the language of that specific marketplace, at no additional cost. For FBA non-fulfillment related questions and for sellers utilizing FBM or SFP, it will be important to establish a multilingual customer support strategy in order to cater to new customers who speak different languages, have different cultural norms, and live in different time zones. At the end of the day, determining if your business is ready to go global will come down to your product categories, the marketplace(s) you decide to enter, your inventory position and pricing strategy.