When your Amazon business is at its peak, it's natural to want to continue expanding internationally, and doing so looks like a huge opportunity. But at the same time it comes with huge risks and challenges, and you have to be prepared to face them head on. Before diving into the challenges of Amazon’s new country marketplace, take a look at how you can lay the groundwork to start selling your products internationally.
The first step is to research the market you are considering.
1. How to choose the right international market for your product
There are seven factors to consider when evaluating a new Amazon country marketplace:
a. Language barriers
The challenge here is obvious. Considering adding Finland as a market? Finnish is one of the most difficult languages for non-native speakers in the world to learn. How much time do you want to spend learning Finnish before introducing the product? This may be an extreme example. But the point remains: the language barrier is a considerable challenge. If you are not fluent in the local language, you must have someone on your team who is proficient and make whatever point you express easily accessible to consumers in your target market.
b. Exchange rate fluctuations
You will face this problem when doing any multi-country business. Let's take Australia as an example. The current exchange rate is 1 Australian dollar to 4.7 yuan. If you have 47,000 people to start an Amazon business there, that's AU$ 10,000 . But the exchange rate is not static. What will you do when the exchange rate changes to 1 Australian dollar to 4 yuan? What will happen to you when the exchange rate becomes 1 Australian dollar to 5.4 yuan? This is a question that needs to be considered in advance.
c. Customer Acquisition Cost (CAC)
Customer acquisition cost CAC is critical to the long-term planning of any Amazon business. Can you reasonably benchmark the CAC you want in the new Amazon country? What is the level of CAC in this country that aligns with your business goals? This all requires careful accounting, as it is closely related to your ultimate business profit.
d. Market size and growth potential
The first step in estimating the size of the market is knowing who your target customers are and how big those people are in the country, which determines the ceiling of your business. Then you need to understand who are your direct competitors in this market, and how much market share these competitors have currently occupied, so that you can assess your entry opportunities and growth potential in this market.
e. The urgency of your product needs
This is self-explanatory. How urgent are potential consumers for the products you sell on the new Amazon National Marketplace? Does your product fill a gap? Or solve a puzzle? Or, is it a luxury item? The answers to this series of questions determine how likely your product is to be out of the loop.
f. The "evergreen" nature of the product
When entering a new Amazon country marketplace, it's critical to consider how "evergreen" your product is. It is more difficult to expand by selling short-term products. Unless you have money to burn, it's hard to navigate a current short-term product into a new market and blow it up right away. Even so, the risks outweigh the potential rewards. So choose evergreen products as much as possible.
g. Sales time
All of these factors can affect when a product is available for sale. The more difficult each obstacle is, the longer it will take you to enter the market. If the time line is stretched too long, there may be unexpected changes in the market that exceed your expectations. When the situation changes too much, it may be the best solution to step on the brakes and re-examine, after all, the risk of blindly launching sales will be greater. But if everything is under control and you're on schedule, go full speed ahead. Once you've assessed the opportunities, it's crucial to consider how you'll face the challenges unique to the new Amazon country marketplace.
2. When considering expansion, there are the following challenges to consider
a. Organizational readiness – The culture of the team committed to expansion is important, how much have they changed from their previous jobs? What is the impact of these changes? Either positive or negative. A team committed to expansion must have a strong willfulness, and need this willful indomitable solution to various difficulties, because the difficulties encountered in expanding a business will be much greater than those encountered in stabilizing a business.
b. Rebuild the brand image – Building a brand image can be a daunting task for any new business. It requires a deep understanding of your customer preferences and what makes them choose you. Building a brand image in the new Amazon country marketplace is a unique challenge. While the tasks may be similar to those in the main market, the nuances make it more subtle than in the main market. Cultural and linguistic nuances can affect how things play out.
c. Understand the difference in demand – When a product is selling rapidly in a major market, it may be subconsciously assumed that the same applies in a new market, but this is not the case. Sometimes potential customers in new countries will not be interested in your product. Either because your product doesn't make sense to them, or because it doesn't fit their lifestyle. Other times, needs are related to preferences. Preferences may include color, material, look and feel, environmental influences, and the like. Preferences vary based on the demographics of the new market: age and gender, ethnicity, average annual income and education level. Weather and climate factors are also important if your product is seasonal. Your launch timing needs to take this into account so that you don't launch at the wrong time and cause sales to slump.
d. Pricing – In the new Amazon Country marketplace, pricing faces many challenges. Customer response to pricing levels may vary depending on your primary market, and this response may be due to differences in government pricing and tax structures for products. Some of these reactions may be localized. In some countries , local regulations and requirements may vary significantly. These differences can give you a lot of headaches when you first evaluate the market. With these factors in mind, you can set a reasonable initial pricing for your product. Like anything else, this may change over time and may be adjusted, but it is a necessary part of the process.
e. Fraud risk – As you expand into more international markets, you will need to process new currencies and increase payment and collection processing capabilities, however you will also encounter more fraud risks. In some countries where hackers and criminals are high, they can find unique ways to steal sensitive financial and proprietary information, and are constantly finding new ways to deceive those who do business honestly. It's scary, but take it as a reminder. You need to put in place proper systems and security mechanisms to ensure 100% security of financial and proprietary data.
f. Compatibility and Restrictions – It is important to consider product compatibility and geographic restrictions to prevent product incompatibility with target markets. Different regions may have restrictions that you can't anticipate without in-depth research. The most common problems relate to live product risks. If your product uses electricity, you need to make sure the components are compatible with your new market. The consumer safety brand logo is also a good "safety proof" for your product. In EU countries, this is usually the CE mark. Make sure the city and federal government have no restrictions on the type of your product so you don't invest a lot of resources and effort and discover that you simply can't sell your product in your target market.
g. Dimensional and Consistency Standards – Dimensional consistency is important. Typically, you will use the metric system, which is the global standard. Of course, imperial measurements are sometimes selected, but it depends on the target market. This is especially important if you sell clothing, shoes, etc. It is necessary to clearly state the dimensions and provide a dimension drawing for the customer's reference. If the size is incorrect and customers are unhappy, return rates can skyrocket and seller ratings can drop. While you want to build repeat customers by offering a high-quality product, if the product is of good quality but has a poor upper body experience, customers will still not buy it.
h. International Shipping and Shipping – As you explore new country markets, shipping and shipping conditions unique to each country are something to be aware of and understand. This process can be complex and includes:
1. Precautions for trade compliance;
2. Customs precautions;
3. The freight that fluctuates greatly;
4. Tax-related matters needing attention;
In order to minimize troubles, it is an effective way to cooperate with specialized international logistics companies. These specialized international logistics companies know more about the policy situation of the destination country than you, which can free you to focus on the business itself.
i. Be ready to build infrastructure for increased sales – as you enter more markets, you will see increased sales. This is a good situation, but at the same time there are many difficulties. Order fulfillment is the most obvious. It is critical to consider the efficiency of your logistics distribution system and the warehouse space you need to meet demand in new markets. The most efficient way is to find and work with a good local 3PL company, especially when entering new markets with unique regulations and requirements. It can be well worth letting a local 3PL handle the distribution and inventory management for you.
j. Localized Customer Support – Customers shopping online are becoming more sophisticated and the expectation for customized localized customer support has become standard. You must be ready to provide localized customer support to your customers. This support must be in the local language and culturally appropriate. Some elements include local phone numbers, email support, and even live chat. Give your customers options so they can get in touch with you if they have a problem. If a customer does have a problem, the infrastructure must be in place to make them feel heard and understood, and to reassure your customer that their problem is resolved while building trust in your brand. The establishment of brand trust is a key factor for the long-term development of the business. Even if you have prepared excellent products, business structures and logistics systems, if you do not pay attention to brand building, the long-term development of the business will be hindered.
Expanding into new Amazon country marketplaces is not for the unadventurous seller, as any exploration of business expansion has two sides: success and failure. To improve your odds of success requires doing in-depth market research to make sure the opportunities you have are worth the challenge. These expansion decisions will also become easier to make with the survey data. And it's all about making the business grow even bigger, and as long as it scales well, the final payoff will tell you it's worth it.