International expansion isn’t something you leave to chance. The first step is always the hardest, so we’ve prepared a list of things to look into before you make up your mind about which Amazon venue to expand to first.
Read more to find out how and where to start your international expansion.
We believe there are 5 aspects you should take into account before you expand internationally on Amazon. Factor them all in, acknowledge the importance and urgency they deserve in your particular case, and you’re nearly there.
Assess Inventories
When it comes to expansion on Amazon, it’s best to start with one venue at a time, unless you have promising sales estimates for several. The new venue’s inventory size will obviously also affect the level of sales you can expect.
Sellers expanding to Europe sometimes send their merchandise off to several European contractors to store locally, but the bulk of the sales may come from entirely different venues. So, the costs you put into storing excess inventory abroad and breaking bulk to cover multi-channel sales could turn out to be in vain.
What’s more, don’t be misled into thinking that Amazon UK or Canada will be better for you simply because they have the largest catalogs. It’s not just inventory size, but also profitability that matters, so find a software tool for instant profitability comparison across all venues.
Sort Out Taxes and Prices
Just as you need to be aware of the CST and VAT imposed on you from one state to the next, you should try to obtain a realistic estimate of the taxes, duties and custom fees you can expect to pay on your sales abroad. Also, consider the effort and resources you’d need to put into your tax registration and into filing your tax returns in each case.
Then, set your prices. As a rule, it should be much simpler to decide where to expand once you’ve had price calculation samples from experts. So don’t commit to a venue before you receive a pricing sample for most of your inventory. Also, make sure these prices take all your costs into account, and avoid sending stock to FBA before you’ve double-checked the calculations.
Check Your Product
How appealing the product is to the locals is likely to be the deciding factor for how well it sells. So, after running a profitability comparison between your favorite venues, look into each product’s sales rank. Then decide which part of your inventory is likely to sell in each country, and how easy it would be for you to focus on sourcing those particular items.
Address Language Issues
Before you stick that pushpin in a new country on your map, be sure to find a trustworthy representative who can watch over your account, and speak to Amazon on your behalf. There’s no use putting all your resources into this if you haven’t found the perfect account manager yet.
Providing customer support in the local language is non-negotiable. So, consider having in-house linguists to meet Amazon’s 24-hour reply requirements. How soon you can find native or proficient speakers will determine which venue you can branch out to first.
Also, consider product and condition descriptions. If you don’t want to lose out to local competitors, try to translate and formulate your new catalog page entries in such a way that they relate to this new market. So, your first choice of venue should be the one where your translated catalog pages can have maximum visibility and reach.
If you’re not able to handle the translations yourself, a native or fluent speaker should be able to help. Otherwise, you could rely on a third party translation service provider, especially if you’re adding new products to the catalog on a regular basis.
Luckily, Amazon can help you overcome the language barrier temporarily, if you use an Amazon European Marketplaces account. The Seller Central Language Switcher translates the text displayed on your online account pages into English. Then there’s the Build International Listings tool, which makes your product available on your European venues of choice.
Insider Tips
Try to carry out some research into any specific demands this market may have for your products. Take Lang Law, for instance. It prevents you from selling a book in France for anything under 95% of the publisher’s price, and also from trying to offset the price by offering free shipping. Due diligence involves looking into legal, social and cultural aspects, among others.
Our experience tells us that the 5 factors above will play a role in your international expansion. Specialists can help you tackle them one by one, but there are companies out there able to deal with all five of them at the same time. Whichever road you choose to take, don’t forget to share your journey with us. We’re here to learn!
Melanie takes an active interest in all things Amazon. She keeps an eye on the latest developments, and keeps Amazon sellers up to speed