Amazon global selling – Pros and cons of international Amazon marketplaces

The growth of e-commerce has been very much a global story over the last 10 to 15 years. The acceleration of that trend under  Covid has also been very much an international trend. Amazon has had a particularly huge part in that. 

However many ecommerce business owners are conflicted. Should I sell in Amazon international marketplaces? How do I evaluate such a complex opportunity? 

Today we go through a simple 10-step process to evaluate whether Amazon international marketplaces might be right for your business. And if so, how to choose where to expand globally first.

What you’ll learn

  • How your long-term plans affect your amazon Global decisions
  • What you might do instead of Amazon global expansion
  • Why it’s so important to add just one new channel at a time
  • The 4 or 5 main barriers to entry
  • Who not How and how this applies to Amazon international selling in particular
  • What to do to test your thesis
  • The most important step of all…a decision that is often neglected!

Resources To Check Out

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[00:00:00] Michael: If you try and sell an overly complex business relative to the opportunity in that case, in that case, the profit or the value of the business, then you’ll struggle. So you’ve got to weigh that up.
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[00:01:11] Michael: The growth of e-commerce has been very much a global story over the last 10 to 15 years. And the acceleration of that trend under COVID has also been a very global thing as well. Amazon’s obviously been a huge part of that as everyone knows, but Mo many, if not most e-commerce businesses end up stuck selling in one or two possible marketplaces and they could be depending on their business missing out on great opportunity, not just for more sales, but applause, more profits.
[00:01:36] So today we’re going to explore whether you should be considering expanding internationally with your business. And if that is the case, how to go about that process to add profits and ultimately make your business more valuable.
[00:01:46] Jason: Love it, man. What a topic I’m excited
[00:01:49] Michael: about? This one, they truly global in scope
[00:01:53] Jason: is big.
[00:01:54] I’m excited about this one because we have the honor of having several communities that we help, run mastermind groups, for, Selling. And also, you know, we work one-on-one with people who have large, large, large, Amazon accounts in the U S primarily, but then sometimes do struggle with the question of going global and whether it’s the right move or not.
[00:02:14] And, so I think of them as I think about this, and I’m eager for them to hear this, this episode and learn about this whole issue of going global, how best to achieve it. You’re going to, I’ve already seen the outline. You’ve got tons of tips and ideas here, and really great information that we’re going to share in this conversation.
[00:02:31] So why don’t you just frame it for us? Like how big do you think this opportunity is? What, what’s your take. The opportunity for us sellers, I guess I’m thinking of us, you know, Amazon sellers to go global. I mean, maybe your context is, EU sellers to go global, but let’s just talk about the scope and the opportunity
[00:02:49] Michael: here.
[00:02:49] Well, I mean, it really depends on your individual business. The first thing I would say, but I’ve got a couple of stories. I mean, one of the clients we have who’s based in the UK, so it is a bit of an EU sort of European focused. I simply sort of politely bullied him for the first three months. It was mentioned for the mastermind in about autumn 2017.
[00:03:05] And they were already doing, I don’t know, it was 3 million us, 4 million us a year and persuaded them to go into Germany, which was for them at that particular point. This is not the advice I would give now, but at that particular point in time, with the relationship between the UK and he was a very easy move.
[00:03:20] And when he left the masterminds and he moved on to eight figures a bit bigger than we can serve at the moment, he said to me, well, thanks to you. We probably made in us dollar terms about three quarter of a million in profits alone, just from that move. So, you know, that was a sweet move. So I’m not saying it’s always as easy as that, but it can really just be a whole chunk, more sales and profits that you built onto an existing business.
[00:03:42] So
[00:03:43] Jason: it’s interesting. I, yeah, I guess as you explain it that way, the other thing that I do have experience with is sometimes we’ll have Amazon sellers or frequently have Amazon sellers come to Kyle and I, and they come to us with the desire to be omni-channel and to move from, just Amazon, us, amazon.com selling to either selling on Shopify or a Walmart or, you know, expanding and other sales channels and their primary.
[00:04:10] Motivation is fear. I guess you could say in a way, I mean, it all boils down to either greed or fear sometimes, you know how that is, but, but I think sometimes they think to themselves, oh, I’m in the U S Amazon, you know, amazon.com and I’m just, you know, doing great, but they could shut me down or something could go wrong or this could get derailed somehow.
[00:04:30] You know, the, I don’t know what I don’t know, but I know that this is great and I don’t want it to stop. So one mitigation of that fear or concern is to go omni-channel and I guess I’d be interested in your take. Do you see multiple Amazon, markets as, as an omni-channel strategy or would you, I mean, in a way it’s sort of a, a sub omni-channel approach where you’re going to be, omni-channel all inside the Amazon ecosystem, but the open, your thoughts on that, and whether you see this as a safety, and risk mitigate.
[00:04:57] Michael: Well, I definitely have some thoughts on that. Yes. I remember you used to have a Russian Canada teacher. I used to say, if you got any advice and you to go whole, whole, whole, we have sake about this and basically yeah. As you know me, well, broadly speaking, I mean, let’s, let’s deal with the Amazon risk thing specifically.
[00:05:14] Cause there were multiple other things that I’ve got in our outline that we’ll cover in terms of risks, diversification, but one of the things that you’re not going to do, frankly, if you expand to Amazon UK, for example, even if you use a different email address, they’re not stupid people, they know you’re linked.
[00:05:28] And if you mess up your U S Amazon account and you break the policies or you have a suspension of a certain reasons that it could be putting your UK or European Amazon accounts at risk. So the answers to the risk thing and the Amazon risk, I suspension risk, you know, I guess you probably will need to have off Amazon channels if that’s really your reason for doing it.
[00:05:46] And a very valid reason it is too. So I guess international expansion via Amazon. Doesn’t particularly in my mind mitigate that risk enough. I mean, somewhat, I do know people who’ve had, for example, Italian, U S sorry, Italian, Amazon account suspended whilst the rest of the accounts will find including us so that it does mitigate it to a.
[00:06:07] Jason: So the de-risking not so much. So then we shift to the reward instead of the opportunity. So this is more about reward than it is about risk mitigation.
[00:06:16] Michael: Well, a nuance to that I’m saying specifically the Amazon risk isn’t decreased, but there were multiple risks that you need to think about. If you only have one currency, you sell it.
[00:06:24] And then it seems like there’s no problem until China and the U S decide that they’re going to completely decouple their currencies. And suddenly your supplier costs relative to the U S market shoots up, then there’s currency risk example, and there are different risks we can evaluate. So in that case, it is a definitely a hedge against those risks.
[00:06:40] So it does, it does
[00:06:42] Jason: help. Yeah. Okay. So now let’s frame this for people who sell in different types of, business models. So obviously you you’re, a trainer in the private label field. But we also have people who are doing arbitrage, and Replens, selling strategy. We have people in our community who are holding.
[00:07:00] Sellers who just simply by, you know, through wholesale accounts and then resell on Amazon, is this opportunity to go global. Do you think limited just to private label or how would you see those other business
[00:07:10] Michael: models? Absolutely not limited. I’m an, I’m not an expert in, in those business models. But I am, for example, a couple of examples.
[00:07:16] I’m setting up my own retail arbitrage business, partly just so I can see, I believe that it’s an opportunity that makes a lot more sense for a big percentage of the listeners and people that have following me. And I want to be able to advise them from a point of view of experience and I’m going to go straight for the U S because I have no particular interest in being exposed to more of the UK governments, you know, government, policies and, and particular challenges we have in the UK.
[00:07:38] So for me, the U S looks like a more attractive opportunity, particularly for retail arbitrage, because it’s a big country, so that the ability to get. The goods you want in your local shops is lower. And therefore there’s more of an opportunity to get on Amazon than it would have been the UK, for example.
[00:07:53] So it comes down to specific sometimes. So that’s one example. Another example, if you are UK based, for example, you might want to contact some US-based wholesalers. Not well people, not wholesalers, but sell at wholesale because, they may be delighted to use you as an expansion channel internationally.
[00:08:09] But equally, if you already have relationships with, you know, some wholesalers and you can be their international expansion channel and take care of that for them, a lot of them will be very, very interested in that conversation. It may be an aspiration they’ve had for a long time, but they’ve never got round to it for the same reasons you do, which is you perceive it as hassle.
[00:08:25] But if you can focus on the Amazon hassle, that’s a lot more specific. And then going into. Rabbit in the headlights moment, we have no idea, you know, so if you can solve a problem for people, you can always make one. Yeah. I love
[00:08:38] Jason: that. I guess the other, person that comes to mind is, our friend Barrington, Macintosh who sells from the Caribbean into the U S market because people in the Caribbean, Nate, people who are from the Caribbean who live in like the foods of the Caribbean, of course, the re the regional foods.
[00:08:53] And so he has a great business just simply, buying those types of items, sending them into the amazon.com you know, S marketplace and they, the Caribbean, you know, natives love to purchase that stuff when, if they live in Minnesota or Seattle or wherever, and it makes it easy and convenient for them and that, so I guess that’s an international approach and strategy that just is simply arbitrage.
[00:09:16] And so I think there that that’s an interesting angle, and I suppose that would be true of any international. Any country that there are uniquenesses there. That their own countrymen are citizens abroad would appreciate you being the supplier for
[00:09:34] Michael: yes. I’ve heard that people have done quite well in Germany, for example, supplying things like Marmite and things that you can’t easily get there.
[00:09:39] So that that’s even like in physical retail stores. So yeah. There’s always opportunities like that. Those are perhaps more specialists, but yeah, more generally, if, once you take the cap off your, your thinking and just go, right, why don’t we consider our next opportunities to look a bit more broadly, literally globally, you may stumble across opportunities that work for your particular business model.
[00:09:57] Yeah, absolutely.
[00:09:58] Jason: Okay. Let’s get the big stuff off the table. What is the biggest mistake you see people make when they start to endeavor into such a efforts.
[00:10:07] Michael: So two opposite errors, really. And I suppose, you know, we can hopefully synthesize a middle path. The first one is people never get round to it for two reasons.
[00:10:14] One is the exaggerate, the problems in their mind. For example, I don’t speak Japanese and I can’t read that they have three alphabets and that is complicated, but I know a person who deals with that. So actually it is probably not as complicated as trying to develop a brand new product line, which for me is like sweating blood.
[00:10:29] I mean, it’s really hard work. And I don’t know many people who don’t find it hard work. Some people like it, but find it hard work. And some people like myself find a hard work and aren’t that attracted. So that’s the first thing. And the other reason for not getting around to it, which is the kind of first error subset of the first area is you’re too busy, even though you believe in that opportunity.
[00:10:46] And in that case, you know, there’s only 24 hours in the day. And so you have to decide whether you’re going to carve some time out, get the routine. Operations off your plate to a degree where you can work on this. And actually that’s a more broad, strategic problem. Isn’t it. If you’re too busy to follow up what looked like genuine, properly qualified opportunities, you know, to change how you approach your, your operations
[00:11:07] Jason: and what does that change?
[00:11:08] That’s the ILA Yahoo gold rate, which is the theory of constraints, which has in his book, the goal. And he asked three questions, what to change, what to change to, and how to make the change. Those three questions drive a ton of optimization in businesses. And if you’re too busy to take advantage of doubling your total sales are doubling your profit by expanding into an international market, just as a theoretical, you know, future outcome.
[00:11:34] It probably means maybe that you’re the technician in your business and you haven’t figured out how to hire team members, who can do the technical components. So you can be on the cutting edge of new growth opportunity. So team building quickly becomes, I think, a big challenge for scaling e-commerce operations, where you’ve got something working, you’ve scaled it and you’ve liberated yourself.
[00:11:55] Maybe you’re financially free. Now you’ve got a real viable business, but you need to. Build a company, a real team if you’re going to scale to greater outcomes. And so I think, yeah, that’s, that’s, that’s part of it that I see, I think as, as a challenge as well, but then it’s like, how do you do that?
[00:12:11] You know, how do you find resources or virtual team members or whatever? You do that kind of stuff. Well,
[00:12:16] Michael: I’ve got lots of useful resources for listeners that, but I think, one thing to your point to sort of synthesize those problems, I suppose, if you feel like it’s complicated and sometimes it genuinely is, but if you think how not, who, like, how do I solve that?
[00:12:31] Then of course you to get overwhelmed because the answer is going to be, what are you going to add 20 hours a week to your workload? And if you’re working 80 hour weeks, that’s not possible. But if you think who not, how there are people out there who solve this stuff for decades, who could do it for you.
[00:12:43] And that’s the key for me is you are going to have some management time. And as you said, you’re going to have to make sure you, you get yourself up the operations and not be the technician. Absolutely agree with that. But equally the amount of time you should need to manage it or to sort of push it, shouldn’t be.
[00:12:59] All of the manners needed. It should be the management manners needed because the rest should be outsourced to experts and they’re out there and they will do the job for you. It’s Mike. I love
[00:13:07] Jason: it. And of course, who not housed Dan, Sullivan’s a recent book that, phrase prompted, in their conversations I think with, who was it?
[00:13:17] Who was it? Gosh, it slipped my mind, but, think of it in a minute, but the idea is you want to be hewed up and you don’t want to focus on your, you know, find your. Not your, not your how. And so I think that’s the idea. Yeah. I love that. I think that’s really valuable advice.
[00:13:34] Michael: Yeah. So the second big area of, of error is the opposite really is people go, oh, well, you know, especially when they’re based in the UK and they still, people still have that mentality, even though Brexit has changed absolutely everything.
[00:13:45] So if you’re a UK based seller, don’t assume that things are just the same in 2021 as they were last year, because they are violently different. I can tell you. So, but you know, the, the natural thing is, oh, I can sell in Germany. Well, why aren’t you selling France and Spain and Italy? What are you suddenly added a bunch of languages, customer support, different cultures, different, types of regulations, but you might sell two units a week of something in Spain, and then you’ve added a ton of complexity without the commensurate opportunity side.
[00:14:12] So that’s, you know, that’s one of the things that I see people doing quite often as well. Let’s kind of an arrow. Of commission, not omission. So it’s a more positive, more entrepreneurial era to make is to overexpand. But nevertheless, that’s not a great thing to do either. So I just advocate just doing two things, which is, don’t assume it’s too hard, but don’t assume that you should just do everything either.
[00:14:32] Just assume that you can do it, evaluate the opportunities and then pick your fights and go for the big wins. And that’s the way forward in my opinion.
[00:14:39] Jason: Okay. 11. Okay. So if somebody is thinking, should I do this? Maybe? Why don’t you give us your best rundown of the reasons why international expansion is a good, is a good idea for people to look.
[00:14:55] Sure.
[00:14:55] Michael: Well, so one very, very simple thing is that whenever people are private labeling and this doesn’t apply quite in the same way to resellers, but it might apply to those who are sourcing wholesale is that if you have to get a thousand units done as a minimum run or 2000 or whatever it is of a custom product, particularly even private label products, quite often, what you’ll say is, okay, so in China, I need to get a thousand units done.
[00:15:16] But if I go to the U S and look at my sales figures, I can only shift realistically, you know, 500 every three months. And therefore you’re going to have a lot of stock hanging around, tying your capital up. One solution would be to, and this is a very common thing that you look at what you could shift in Canada as well.
[00:15:31] And then in Germany and UK, for example, and it all adds up to a sort of an additional. So maybe in double the number of units. So suddenly you can move your, you can make an order and shift that stock into cash within three months. And therefore, you know, you’re more efficient, you’re turning your cash over quicker.
[00:15:48] So you’re basically using the same amount of cash in stock, all things being equal. This is a simplistic way of putting it, and sending it around the globe and you’re turning it back to the cash more quickly. So you should, if you get it right, not really greatly increase your working capital requirements, but you can almost double your sales, which is a beautiful thing.
[00:16:03] And this is a very powerful reason to do it. I think that’s probably my number one reason to do it. At the mEq versus unit sales saying. Yeah. Any, anything that increases cashflow? Yeah. More revenue, more profit. I mean, it’s, it’s quite simple and they don’t automatically translate, right? So you could be UK based salary.
[00:16:20] You look at the U S you see stars in your eyes and you think, wow, somebody is doing a million dollars a month in this market while, okay. But if it’s hyper competitive, you won’t necessarily make profits. So you need to nuance that. But that’s certainly an opportunity diversifying global risks. We talked about risk diversification.
[00:16:36] To some degree you can mitigate Amazon suspension risk for an individual country accounts. So that is kind of half mitigated, but currency exchange risk is one thing. If the Chinese and us dollar relationship changes violently, then that could be really hit you. Whereas if you’re selling to Europe and that hasn’t changed, then you’ll have the same profits you have before.
[00:16:56] The second thing is diversifying geopolitical risk, which is a very real thing. China and the U S are kind of on a collision course for who’s who’s the top dog in the world. And that means. Saying it’s right or wrong. It is what it is, that they are big old tariffs now of course, importing from China to us.
[00:17:11] Whereas you won’t have any change really between China and the EU for the last decade in sense of the relationship, the other, well, obvious one is Brexit. They never, if you were selling into Germany last year in the UK, no problem making lots of money this year. It’s an absolute nightmare. Whereas if you’re selling to the U S that won’t have changed.
[00:17:27] So that’s another thing you mitigate against and then other risks as well, which are quite random. So for example, during the COVID time, Kevin Sanders and my friend who sells everywhere in the world, who I know you’ve met as well. And I was working with, he was selling primarily in the U S but he was also selling in Europe, which has maybe a third of his sales.
[00:17:43] And at one point, the us kind of shut down. Most of the, the Amazon warehouses that he was fulfilling from in Europe just kind of saved his bacon. Cause that kept ticking at that point. So sometimes you don’t even know what, what you’re going to protect against, but having diversification geographically can really help them.
[00:18:00] Jason: I’ll add something to your list, as I’m, as I’m listening to that, the other incredible opportunity as a reason to expand is because, frequently or each of us in our categories were head to head against other competitors. And the question is, where are you? And where are they? And it is a little bit of a chess game or checkers.
[00:18:18] You you’ve got spots on the board that you are, or aren’t that are strong or weak. And they have spots in the board where they’re strong and where you’re weak. And you’re constantly thinking through where are they? Where am I? Are they first? Am I first? Or, you know, ideally, and, if you have an opportunity to go into a space that.
[00:18:38] Not occupied by a competitor. These frequently become winner take most opportunities. If you install yourself as the number one option in any product niche, in the, you know, bestseller ranks on these marketplaces or platforms, it becomes increasingly difficult to uninstall you. And so, you know that, and that’s, that’s the name of the game in many of these marketplaces that start when they’re small start with no one cares start with no one understands who they are, what they do, and as they scale you scale, and you installed yourself in a, a prime spot over time, it’s almost like setting up shop in a little town.
[00:19:13] That’s a nowhere town. The major railroad or freeway gets installed by. And then over time as the traffic grows and grows and grows, you do more and more well, and you’re competitive. Only wishes they would’ve known about that opportunity of the year before you did. And it is a little bit of a little bit of a land grab.
[00:19:33] Sometimes it feels like, I think so. Absolutely.
[00:19:35] Michael: I think the main thing is it’s it, nobody has a 20, 20 vision on the future, but you need to look at the sort of drivers of it. I mean, population size is one, isn’t it, but, you know, sometimes, There are kind of underloved markets. I mean, I think, for example, if I were a US-based and Canada would be something I would be considering a bit stronger than most, I think my understanding is that sort of 80% of Canadians live within a hundred miles of the U S border.
[00:19:57] I mean, so it’s not like it’s a huge country, but most of it isn’t going to be, you know, where you’re trying to fulfill to. So, you know, that there are some obviously under love things. Another one for me is Japan. I mean, yes, there are linguistic problems, which are very solvable, but actually if you’re, if you’re making stuff in China and selling it over to the UK or the U S which nobody thinks twice about doing normally, it’s pretty tricky right now, the shipping time on a boat from most Chinese east coast to Japan is two weeks.
[00:20:24] It’s so quick. And that takes out a lot of the horrendous nailbiting of is my shipment going to take three or possibly four months now. And people don’t consider it because there’s a bit of a cultural barrier and I get that. But compared to the horrendous mess of shipping stuff from China to U S. Yeah, exactly.
[00:20:42] I mean, I just think that that’s under loved and that’s an opportunity. For example,
[00:20:46] Jason: so if people have heard the opportunity exists and they aren’t doing it right now, they’re, they’re either not doing it because they’re really new and they haven’t gotten to that valuable thing because there are other more valuable things that they’re doing.
[00:20:58] They’re just maybe scaling in, in their own country, first, but, and so that’s just on their list, but not done yet, but the other reason people might not have done it is because to your previous point, they’ve, over-exaggerated the concerns or complexities or problems in their mind. Maybe they’ve made a monster out of it, but there are realities that are of complexity and problem, you know, problematic, you know, issues to solve if you’re going to go international.
[00:21:24] So what, what do you see as those real, big, big challenges, and the downsides associated with expanding internet?
[00:21:31] Michael: Yeah, I would say the first thing is additional complexity is not just your management time, but if you’re trying to sell the business on, if you’re thinking big, big picture, longer term, you’re trying to sell it onto an aggregator or anyone else is going to be their management time.
[00:21:43] And if they’re intelligent and some people don’t think this through and we’ll just buy anything. But if they’re the longer people are, get the reality of integrating Amazon businesses with multiple countries involved, multiple marketplaces, the more they’re going to be aware of the fact that they should think about this.
[00:21:58] So over time, If you try and sell an overly complex business relative to the opportunity in that case, in that case, the profit or the value of the business, then you’ll struggle. So you’ve got to weigh that up. There will be more money to spend on tax compliance, which is not the same as the tax itself, compliance, meaning hiring tax experts, registering with different companies, putting in reports, you know, VAT, sales, tax, whatever it is.
[00:22:21] You might potentially need to spend more money and focus as well. Mental focus on other forms of compliance. You know, for example, if you’re selling stuff that is FDA approved, what is the European union equivalent and things like that as well. You’re going to need to set up new relationships in different countries or, or sort of entities, I suppose you sometimes can treat the EU as a whole, sometimes not.
[00:22:41] Tax can get complicated. Of course, you’ve got stock management complications because you need to know where your stock for product line. X is you might have, you know, a thousand units being made in a factory in China, 500 on the water towards, the U S 200 in the USFC, et cetera. Right? So you’ve got multiple places where stock going to end up.
[00:22:59] So you’ve got, gotta be on top of that and capital allocation as well. If you’re really expanding aggressively internationally, you may not be expanding in the sense of launching new product lines and you might be taking existing product lines and allocating the capital to stock and international expansion costs.
[00:23:14] So it is really quite a big decision, which is why I’m trying to flag this up as a nuanced discussion rather than just yes, it’s amazing or no, it’s terrible.
[00:23:21] Jason: No, it’s great. And I think it is your wife’s to set it up this way, as, you know, consider the realities of the challenges, but also the opportunity.
[00:23:28] And I think just, I guess timing wise, you know, as we record this, it’s, the end of October early November, I think timing wise, I would just encourage people to think of. This year is obviously just all about black Friday cyber Monday, end of year sales. But could I set this up for next year? Could this be my, could this be my big, big thing for next year?
[00:23:48] That really takes my business to the next level? I think that, so timing wise in terms of the calendar right now, I think this makes a lot of sense too, for people who are listening to this in the moment, you know? So, okay, so we’ve got the pros, we’ve got the cons. What are the decision making steps that you would recommend people kind of put together to really make this decision as to whether they should do.
[00:24:07] Well,
[00:24:07] Michael: following your lead, Jason, I’ve got a 10 step process so people can hang on to. So the first step is really to tie it to your bigger goals. I mean, two things really. I mean the biggest goal is probably that the lifetime of the business insofar as you own it, it doesn’t mean the lifetime of your business.
[00:24:24] If you sell it on somebody else and it becomes a global brand for 20 years, but what’s your exit plan? What is the simplest path to a valuable exit? As I said before, you got to think about adding value versus adding complexity. Complexity is less attractive because it means management time and risk for whoever takes the business on.
[00:24:40] And by the way, it’s true for you while you’ve owned it in the meantime, but also, you know, value. I mean, so you’ve just got to weigh that up. As I said before, if you start adding all the European marketplaces, for example, and all the complexity that comes with that, and, and you have marginal additions from three of them, that does not make sense.
[00:24:55] So you’ve got to think about, you know, if you’re planning to sell your business, how attractive is this going to make your business more or less attractive and will it add to the value and then. So that is your medium term goals. What’s the simplest part of the profits. Sometimes it could be just produce more product lines for the same marketplace, if you’re really good at product development.
[00:25:14] I mean, personnel fell. It’s like pulling teeth. Some people find that easier and finding slash expensive, more stressful. So that’s a bit of a nuance, but either which way you’ve got to tie it to your big goals. Otherwise you’re just adding stuff randomly. And it’s very easy to do. Amazon will encourage you every five seconds to add more marketplaces.
[00:25:31] It means to be very mindful about whether it makes strategic sense for you and your
[00:25:35] Jason: business. What’s.
[00:25:37] Michael: Second step, consider alternatives. Really you’re looking at allocation of time and money and efforts to new product lines versus new sales channels. Those are broadly speaking. How are you going to increase revenue and case?
[00:25:47] You should be caveat. We’ve talked before about fine tuning, your conversion rates and everything else to maximize profit from existing revenues. I’m not suggesting you skip that, but assuming you’ve done that dangerous assumption, but I have to make it. It’s basically new product lines versus new sales channels.
[00:26:02] So you’ve got product a it’s selling in the USA. It’s selling like hotcakes. Okay. What are you going to do next with the limited capital and money you’ve got available? What’s the next step? Is it going to be to go and get related products made or you’re going to go into the, you know, UK with it and maybe Germany as well.
[00:26:18] Obviously you can have a strategic plan to do both, but I would strongly advise against doing both at the same time, because normally you’re bitten off more than you can chew in my, yeah,
[00:26:28] Jason: this is interesting because I think this is where it really becomes an omni-channel conversation. You know, we’ve had this conversation many, many times with the clients that we work with, which is you’ve got something nailed right now.
[00:26:39] You’re on lockdown with, you know, your current Amazon us selling process, or you’ve got, you know, you’ve got that set up and you’ve got Shopify set up. And the question is what’s next? And the international Amazon frequently turns into just an alternate channel that they evaluate against Walmart or, you know, other, you know, omni-channel selling opportunities.
[00:27:03] And so I think that’s an interesting thing to look at because you probably, I don’t know what your opinion is, but I would think you’d want to take these channel exercises. Sequentially one. Do one, right? Did it go and refine it? And then when you’ve got the mental, emotional, financial, team bandwidth to take on a new channel, you just go, you know, you go into the next one, get it sorted, and then keep going from there and become an omni-channel seller over time in now.
[00:27:31] Rather than dabbling in three or four channels at the same time and have a giant bowl of spaghetti business mess the problem. Right. Is that
[00:27:40] Michael: absolutely agree with that. And then they expose the bowl of spaghetti masses. It is very visceral way of putting what I was trying to say that the classic mistake I see people would kind of just Chuck everything on Amazon.
[00:27:48] They go, omni-channel just cause you can, like, if you’re based in north America, it’s, it’s not a casual stuff to send inventory to China, to Canada, because it’s so huge. Or to Mexico, because it’s a very different type of market, but in Europe it’s very tempting to just go, oh, let’s just throw everything and then you’re right.
[00:28:03] That that’s messy. And I absolutely. A hundred percent back you up on that one channel at a time, get it right, refine it. And by the way, try it out first. And you may discover that it’s not for you. I would say, allow for that. The assumption we always make as entrepreneurs is, oh, I’m going to do this and I’m going to do this and I’m going to do this as opposed to, let’s be humble.
[00:28:22] I’m going to try this. If it works, I’m going to double down on it. But if it doesn’t work, I’m going to do something else. So allowing for the hat as well is part of reality is now I
[00:28:30] Jason: think. Yeah, totally. Right. And I guess the international Amazon expansion is a known quantity in terms of the backend systems and all that.
[00:28:38] I mean, relatively speaking, if you’re selling them on Amazon platform, you, you kind of conceptualize how you could move laterally to other countries. Whereas if you compare it to selling on eBay or Walmart, and you’ve never done that before, it’s a whole different animal. So, yeah, I think that makes a ton of sense.
[00:28:54] So what’s the, what’s the next step? What’s the third
[00:28:56] Michael: step. So the third step, really having decided whether it makes sense for your strategic plans and looking at basically, you know, the, the, the, the trade offs, as you said, are you going to do walmart.com in the U S versus, you know, Amazon Europe or something is really okay.
[00:29:10] Evaluate the size of the opportunity so that my hint is very simple but important, which is start with the biggest markets first. So us is. You know, if you’re UK based, always this sort of shining city on the hill, I’m not quite sure that a lot of the time that it’s really the opportunity it looks like because the
[00:29:28] Jason: that’s such a nice comment.
[00:29:30] Now we’re a shining city on a hill in the hill, British person, so great
[00:29:37] Michael: big sales numbers and, you know, raving consumers, you know, the buy everything. But you’ve got to think about the fact that if you’re going to really big market is going to have a very big working capital requirement. That’s the first thing.
[00:29:47] And the second thing in the U S compared to most other marketplaces in the world on Amazon, but it’s true off Amazon, I guess, to, to a large degree is just so much bigger that the competition is really fair. So you need to know what it is you’re doing. Having said that sometimes you can niche right down in the U S and make a real business out of something that would be just too small, a nation in any other marketplace.
[00:30:07] So the U S is a bit of a special case because of its size. But I would say if you’re UK or US-based German, UK, if you’re a us based is an obvious one and Japan, those were all, you know, Germany is the second biggest, my biggest Amazon marketplace by some margin. And then UK and Japan always seem to be pretty similar sizes.
[00:30:23] So they’re obvious opportunities. So
[00:30:25] Jason: your rank order would be us Germany, UK, Japan. So those are the top four.
[00:30:30] Michael: If I, yeah, kind of in terms of size, I mean, if I had to really pick three to really focus on, if you’re, US-based in, you’re not selling UK yet, it’s the obvious place to look. But the, really the under loved because of the perceived barriers to entry, you know, where to your point of trying to dominate before everyone else has got in there, Germany and Japan is still Germany has got quite a few American sellers, but not as many percentage wise as the UK, for sure in Japan is just underloved by us sellers.
[00:30:55] And I understand why, because it’s a kind of, a bit of a black box. You can’t use the usual research tools for me. That’s a great thing. I love that because you haven’t got the competition. And I think the competition is a bigger problem to you than somebody just tickle challenge. I mean, the competition is always going to be eating at your margins, whereas once you jumped over a barrier, you’re the other side of it.
[00:31:14] So for me, I mean, if I had to pick one single underloved opportunity as GL Japan, really,
[00:31:19] Jason: you know, it’s interesting you say that Kyle Haimer my business partner for our consulting work says that frequently to people he has. With his brands in Japan and he walks people through that for the same. Which is, you know, you kind of go where people aren’t your, where your competitors aren’t and, yeah.
[00:31:37] So it’s interesting. He feels the same way.
[00:31:40] Michael: Yup. Yeah. Well, I’m glad to hear that, but yeah, it makes sense. Doesn’t it? I mean, it depends what you think the problem is. An operational problem is something that you can solve, whereas competition is out of your control, isn’t it? And likely to increase if the competition finds something easy.
[00:31:53] Now it’s going to get worse over the next 12 months. A couple of sort of bonuses. If you’re based in the USA, I would definitely consider Canada. I’m not based in the U S so I’ve not really, you know, done that is slightly harder if you’re UK based, but you know, there’s a bunch of, Now well-healed consumers that probably have quite similar habits to us substance within a Stone’s throw of the U S border.
[00:32:11] If you already, suddenly you, you particularly selling in Germany, I would definitely add on France, Italy, Spain, so that I wouldn’t just randomly add them on there if you’re not already selling in Germany because to the points we made earlier, people get excited about Australia, Dubai, Singapore, UAE, whatever.
[00:32:26] I’ve never really come across anyone who’s done anything there that’s excited them or me really. So I wouldn’t get too distracted by those at this stage in the game
[00:32:34] Wrapup: Ladles and jellyspoons. Thank you so much for listening to another episode of the e-commerce leader today, we’ve talked really, quite globally about the Amazon global selling thing, pros and cons of international Amazon marketplace expansion, there are many big opportunities out there for a lot of people equally.
[00:32:49] There are quite a few problems to overcome in order to do it. So you’ve just got to think it through, hopefully today was a useful pros and cons kind of lists. Another approach to the same problem is what we’ll take in our next episode, which is when we’ve got a 10 step process to go through, really, to evaluate how to decide whether to sell.
[00:33:09] A particular marketplace or not, and in the Amazon sort of ecosphere, and it’s important to think it through. I think sometimes people fall into one of the two traps I mentioned, which is that they freeze in horror because it looks too complicated and they miss evaluating the size of the opportunity, which.
[00:33:25] Personal business might be really huge over the next few years. And equally then sometimes people just start without thinking it through, and then it ends up with a bit of a spaghetti mess as, as Jason would put it. So there is a middle path. I believe that we have that pass to do stay tuned for our next episode on that.
[00:33:42] We are. And producing quite a bit of new content now with our calling app. So calling is only available on iPhones at the moment it’s calling CA L L I N for November. And if you want to find the e-commerce leader, calling show, just go into the app type in the e-commerce leader and then hit search.
[00:34:00] And under the shows segment, you’ll be able to find that. Getting there and follow subscribe, and you’ll be able to hear the debates live. We are talking with Chris green Kyle Haimer, which is he’s a very, very good Amazon seller and is Jason’s business partner in their consulting business. And of course Jason Miles and myself Michael VZ.
[00:34:19] So it’s quite a fun lineup, a bit more interactive, a bit shorter and snappier style than Jason and I. Deep dive a bit more. So if you find what we’re doing here, helpful, then check that out. You can also find it on the podcast as well, but the call-in show app is a fun place where we can eventually, when things expand a bit, we’re going to be a bit more interactive as well.
[00:34:38] So do check us out there at the call-in app. CA w L I N. Or keep following us on podcasts or indeed YouTube or Facebook, wherever it is that you prefer to follow your content. And thank you so much for your attention. We will aim to make it absolutely worth your while and help you to become the best e-commerce leader you can be.
[00:34:56] Thanks for listening.
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