How-to: How to successfully use Amazon to expand internationally!
E-Commerce has become more than ever a “place” of world trade: sellers and buyers can now be as much direct neighbors as they could be in opposite cities across the globe. As a seller, this international sales potential is enormous, but it can still prove to be complex and risky.
Indeed, it is often emphasized how difficult selling abroad can be; in contrast, this article shows how merchants can use Amazon as an easy international expansion catalyst. Here are a few reasons why this is the case:
Myth #1: International shipping is expensive and complex to set up
If you are reading these lines, you are very likely already selling products online, at least within your own country, and therefore have local contracts with carriers that you are already familiar with.
Have you ever asked these business partners if they can ship internationally? Some of them probably can, but of course, this incurs higher costs and longer transport times.
What if you could have regional warehouses in each destination country to reduce this customer-critical transport time? That may sound very expensive, but that is exactly what Amazon offers to merchants with the Pan EU solution.
This program allows you to send your products in bulk to any Amazon warehouse and then – depending on which country you are selling in – Amazon automatically takes care of distributing your products so that they can be shipped from the same country where the purchase was made!
For you, this means: no local logistical effort, competitive costs, and a great customer experience. Additionally, your products are eligible for the “Amazon Prime” loyalty program (150 million users as of 2020) when using FBA and also have a higher likelihood of winning the very popular Buy Box.
Myth #2: In cross-border trade, you need to translate all your products
Selling in the international arena requires that the content of your website be adapted to multiple foreign languages.
If your catalog includes only a few products, the workload is quite manageable, but if the total number of your active SKUs includes several hundred products, this can become a significant time investment. Amazon can help you get started with selling abroad – even though there are of course many other online translation services available.
With the Amazon feature Set up international listing creation, you can instruct the e-commerce giant to transfer the product detail pages of your home country marketplace to some other European marketplaces.
For all existing products, Amazon will automatically link your listings, synchronize the price, and translate!
In summary: With a few clicks, you can push products from your home marketplace to other countries without having to painstakingly translate the product page itself! Such a tool is a great way to test a few new countries with low setup costs.
Myth #3: Monitoring exchange rates is mandatory when selling outside the Eurozone
Adjustments for different marketplaces are, however, continuously necessary. Depending on the home and destination country, you may also need to convert prices into the local currency of the destination country.
The most common case for a European seller is selling in the United Kingdom in British Pounds (GBP).
Even if the EUR/GBP exchange rate shows only slight fluctuations, you could experience an unpleasant surprise depending on how your profit margin looks if you do not pay careful attention to the exchange rate.
Here again, Amazon can take on this task for you using the international listing creation .
Once you have defined some pricing rules (e.g., increasing prices by X percent) between your home marketplace and the international marketplaces, Amazon automatically converts the prices into the foreign currency and adjusts them as needed.
This automatic currency conversion can also be disabled if you prefer to define the prices yourself. In this case, you will need to define separate price values for each of your internationally sold products and possibly hire an e-commerce feed manager for better efficiency.
Myth #4: Inventory must be synchronized more frequently when selling in new countries
Among the KPIs closely monitored by Amazon, the cancellation rate before order fulfillment is at the top of the list. Selling internationally on new marketplaces can significantly increase the complexity of inventory management: the more sales channels you manage, the more important the synchronization rate becomes.
Amazon seems to be aware of this problem and offers various solutions to address it: The first solution is to use Amazon FBA, as mentioned above in #1. Inventory management is then handled by Amazon, and you no longer have to worry about it.
The second solution – if you prefer to ship the goods yourself – is to use the same SKU for a product in all countries. Amazon then automatically synchronizes the inventories.
In fact, it is important to know that SKU inventories are shared across all Amazon countries within a zone, such as the EU or America. In other words, every time a product is sold in one country, its inventory decreases in all active countries as well.
Myth #5: International business is possible in Europe, but unreachable in America
Crossing the Atlantic sounds exciting from a tourist’s perspective, but it is very complex to handle from an e-commerce perspective.
Many additional barriers arise on this journey outside of Europe: shipping duration, import tax, customs, customer returns.
These new barriers can – once again – be overcome thanks to the Amazon marketplaces.
Even if this may not be apparent at first glance: EU and US seller accounts can be synchronized with each other. Additionally, you can then benefit from the same features as if you were using “FBA” within an EU account.
All you have to do is:
1) Create your US seller account,
2) Link your existing EU seller account with the newly created US account,
3) Set up the international listing creation feature to synchronize your EU products with existing ASINs in the US,
4) Send your goods to an Amazon US warehouse.
The icing on the cake: thanks to this “Atlantic bridge,” you are not limited to the USA, but can also operate in Mexico and Canada.
Myth #6: Anyone wanting to sell abroad must hire bilingual employees
Internationality is usually associated with foreign languages, especially in Europe, where 24 different languages are officially recognized by EU institutions.
While English is usually spoken with foreign suppliers, local languages are often the only ones used when dealing with end consumers. Fortunately, one of the biggest advantages of e-commerce is that communication can usually take place via email or similar means. Written communication is very easy thanks to modern translation solutions like DeepL or Google Translate.
Also, keep in mind that when using Amazon FBA, most of the customer support is handled directly by Amazon in the local language.
Myth #7: International returns are complicated
E-commerce brings many advantages for both sellers and buyers, but when orders have defects, management can become very complex, especially with large products.
When you add the variable “international” to customer service, management can become a real nightmare if you are not well prepared.
Unless you have reached a significant size and can hire multilingual customer service employees, a “plug-and-play” solution is again to use the Amazon Pan-EU program, which takes care of both customer service and the return of orders.
Myth #8: For every new country, everything must be started from scratch
Opening a business in a new country comes with many barriers for newcomers that need to be overcome. These barriers collectively represent significant opportunity costs that could prevent some new countries from being considered at all.
As we have already seen, thanks to Amazon, most of these barriers are overcome through the combination of FBA and BIL: you can then calmly decide to expand into new Amazon marketplaces and spare yourself most of the difficulties.
If you are now feeling a bit more confident about your international e-commerce expansion and know that Amazon can significantly help you with most operational steps (products, prices, logistics, customer service), you may still need to check two final aspects: first, the administrative and tax declarations that need to be made, including the very current VAT Directive 2017/2455, and second, how to manage products, prices, and inventory for your home Amazon account, which can then be used as a source for international expansion.
Image credits in the order of the images: © Brian Jackson – stock.adobe.com / @ tampatra – stock.adobe.com / @motortion – stock.adobe.com
