At a certain point, each seller starts to question when whether it’s the right time for them to expand to a new Amazon locale. Entering a new market sounds exciting and presents huge growth opportunities but there are a few things you need to consider beforehand to minimize risks and ensure a successful launch.
There are some key considerations to address before taking the plunge, so you’ll need to do a bit (a lot) of research and preparation before you kick off international expansion. 4 vital questions you’ll need to answer to are:
- What is the size of opportunity and demand in the target market? You’ll need to understand the competitive landscape and assess its saturation levels. You’ll also need to check competitor offerings and pricing for gaps in the market and how pricing will affect sales.
- Do you (or someone on the team) have a solid understanding of the tax and legal regulations? These not only differ from country to country but also from category to category. Making sure you comply with all requirements will help you avoid any problems and suspensions post-launch. Some of the regulations include country-specific tax laws & consumer protection, health, safety and environmental legislation, custom regulations & intellectual property laws. Ensuring your brand complies with all requirements and regulations on international marketplaces is probably one of the most crucial factors in your expansion efforts in the long run.
- Who will take care of order fulfilment in the target market? How will products get into the country and who will take care of the fulfilment to the customer? Check which fulfilment methods would be the most efficient and suitable for your business to ensure timely deliveries to customers but also keep margins high.
- What is the most logical market to target? It’s great to build ambitious goals and expand to as many locales as possible but it’s always recommended to start with a more narrow scope. You can never underestimate a focused effort and specific PPC strategy during the launch phases. If you try to expand too quickly without the proper resources, you might find yourself missing your goals.
If new market expansion is on the to-do list for 2023, we’ve made a quick Amazon Expansion Ultimate Checklist for you to have handy to help answer the questions above.
✅ Apply for Brand Registry
Brand Registry helps to protect your registered trademarks on Amazon and gives more advanced options for content creation including A+ Content, sponsored brands, and a brand store to boost your brand presence in the marketplace. Each of the markets you want to be selling in should be brand registered. To apply for Brand Registry you would need to have a trademark registered in each locale and be able to prove that you are a brand owner. Without Brand Registry you will be restricted in ways to promote your business on Amazon.
✅ Register for EORI and VAT
If you’re looking to sell in Europe, you’ll want to register for EORI (Economic Operator Registration and Identification) as it is required for customs declarations. VAT registration in is also required to distribute your goods. You will have to be VAT-registered for each of the marketplaces you will be selling in as VAT rates differ from country to country. Not complying with VAT regulations might cause serious penalties and raise law cases. As always, check with tax professionals to see what would be required for your specific business.
✅ Choose a Payment Method
There are a few ways to receive money for the sales you make in a new marketplace.
Amazon accepts payment in several currencies and pays you in your local currency. When you register to sell in a new marketplace, there are several ways you can set up your account. You can use a local bank account in the marketplace where you sell or you can use the Amazon Currency Converter for Sellers (ACCS) to receive payment from your bank in your local currency. ACCS funds are deposited into your bank account every 14 days, and Amazon owns the bank transfer fee.
✅ Calculate All the Costs and Adjust Pricing as Needed
International expansion and marketing investments to a new market might take a chunk of your overall business budget so it is always worth understanding what expenses you might incur. Transport and fulfilment costs across the EU might be higher than in the UK due to Brexit, so count them in on top of regular Amazon fees. Custom duties and different VAT rates will also need to be taken into account. Slight differences in fees across different markets will affect your bottom line, so make sure you have a full understanding of your margin. Your pricing strategy will need to balance your total costs with the competitive landscape.
✅ Select Your Fulfilment Option
As with your initial market, there are a few ways to fulfil your products: FBM (fulfilled by Merchant, or Seller Fulfilled) or FBA (fulfilled by Amazon). Across the EU there are 3 FBA options available: European Fulfilment Network EFN, Pan-European FBA, or Multi-Country Inventory. With any of the FBA options, you will get a Prime badge and customers will be able to get their orders within Amazon’s shipping window, which is positive for customer experience, as well as less stress on your shoulders as Amazon will do the logistics for you. With FBM, you will be in charge of sending inventory to a new market and/or delivering products to a customer door. Learn more about multiple FBA solutions across the EU here.
✅ Language Barriers – Localisation Not Translation
Localisation is another aspect of international expansion that you just have to get right. It goes beyond simply translating your product detail pages. Localisation ensures an accurate translation of your listing, images, and video content that takes into account the nuances of the local language. Similarly, the main SEO and PPC keywords will also need to be localised – search habits can vary greatly by country, so you’ll need to do separate keyword research.
Product packaging including ingredients & directions to use is also required in a local language. Make sure you either have in-house capabilities to comply with language requirements or consider working with a 3rd party preferably with experience working with Amazon.
✅ Consider Global Listings
Creating global listings might be a shortcut to save time on creating a new account and listing products from scratch. With what is called a Unified Account, you will be able to use the same sign-in details and access sales, orders, inventory, reports, and any brand-specific data, across all countries. The benefits of a Unified Account include creating listings from a source marketplace instantly in a new marketplace, synchronising prices in both the source and new markets, and adjusting prices to reflect currency conversion fluctuations, among others. You can learn more about Building International Listings here.
✅ Optimize Your Content
It is not just about the legal bit. With your entry into a new market, you’re introducing your brand to a new set of people. Make sure your product offerings are to a high standard. Amazon customers are picky and Amazon algorithms encourage quality content. Make sure you optimise product listings with high volume relevant keywords, upload high-resolution images and video, and have informative and engaging A+ content and a brand store to share your brand story and latest marketing offers. A solid pre-launch strategy should include strong advertising and promotional plans to boost launch and get traction from day 1.
Ready to Go?
If you prepare for the expansion properly, it will enable you to get ahead of the risks and avoid unpleasant surprises on the go. It will also help you build a suitable launch strategy and gain international brand recognition reaching relevant customers.
If you are ready for international expansion but still don’t know where to start or you’re not quite sure which market houses the biggest opportunities for your category, get in touch. We can help you uncover the size of the prize in each Amazon market or get your listings set up for international success.
