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Thinking about Selling overseas with Amazon? Read our blog to discover the pros and cons of expanding your business globally with Amazon, including the benefits of Amazon Global Selling and FBA for international sales. Learn about the challenges and drawbacks of selling on Amazon abroad and find out if it’s the right choice for your business. Don’t miss out on the opportunity to tap into new markets and boost your sales with Amazon!
If you’re looking to expand your business and sell overseas on Amazon, the US and Canadian Amazon Marketplace can offer significant market opportunities for sellers. With over 150 million Amazon Prime subscribers, 20% of which shop on Amazon multiple times a week, the US-based marketplace alone recorded $263 billion in sales in 2020. This illustrates the significant influence of the US-based marketplace in North America, which includes competitive pricing, wide product selection, and explanatory product reviews and ratings.
Expanding your business to sell internationally through Amazon can be a simple process. Using Amazon as a platform to introduce your UK or Europe-based business to the North American market can be more effective than trying to enter the market independently. If you have a product that is desirable to North American consumers, opening an Amazon Seller Account in the US and Canada is a good idea. Amazon offers a convenient and straightforward process for overseas businesses to start selling on their North American channels with convenience and Amazon Prime benefits like fast shipping.
To reiterate the importance of Amazon in the US:
- Amazon sells over 4000 items per minute.
- It has over 2.2 million third-party sellers, with 86% of them selling on the US marketplace.
- 41% of these third-party sellers are not based in the US, which highlights the potential for UK businesses to set up shop on one of Amazon’s North American marketplaces.
Amazon is the leading eCommerce retailer in the US, holding a 49.1% market share. This demonstrates that consumers prefer to purchase from Amazon and that the platform plays a major role in their buying decisions. To be successful in marketing, it is essential to sell products where your customers are. In North America, they are primarily on Amazon.
Expanding your UK-based business into the US and Canada through Amazon’s marketplace can provide a share of the significant market share that Amazon holds. Even a small share could be more profitable than remaining solely in the UK or Europe. Furthermore, this presents an opportunity to sell seasonal items year-round in a different market, which can be quite profitable. This way you can reach more customers, enter a new market and scale-up easily.
Pro #2: Save on shipping costs
One way to save on shipping costs is to send your product to an Amazon Fulfillment center in bulk. Amazon will handle packaging and shipping orders for you, allowing you to focus on other aspects of your business. While you can also opt to ship products directly to customers as they are ordered, this method will likely increase your costs and time if shipping from the UK. The savings from bulk shipping can be used to adjust your product pricing in the North American market or to invest in ads on the Amazon Network. You will also not encounter any currency or payment issues.
Pro #3: Fast to enter, quick to profit
The process of getting your products listed and selling overseas on Amazon’s US and Canadian websites is quick and efficient, with the registration and approval process usually completed within a few days. You don’t have to pay upfront costs for expansionMany sellers are able to start selling within 3 months, and 67% become profitable in the first year. Once approved, you can begin implementing your Amazon marketing and SEO strategy, creating content, and uploading your products.
The cons of selling overseas with Amazon
While Amazon provides a great opportunity to sell overseas, it’s not without its challenges. Being aware of these potential issues before starting to sell on Amazon’s US and Canadian marketplace can help you develop a stronger marketing and sales strategy and mitigate their impact on your business.
Some of the “cautions” to consider before selling overseas on Amazon include:
Con #1: There is more competition in the US
When selling on the global marketplace, there is a large number of sellers to compete with. Specifically, over 281,000 sellers are based in the UK and an even larger 1.1 million are based in the US. This means that in the North American marketplace, your products will have to compete against an even larger number of sellers.
Competition can be beneficial as well. With the right eCommerce strategy, it is possible to make your products stand out and become more appealing to North American Amazon shoppers.
Con #2: Exchange rates can be significant
When you sell products on Amazon.com or Amazon.ca, you will be pricing them in the local currency. However, when you receive payment in your UK-based bank account, Amazon will charge steep exchange rates and processing fees.
One way to reduce these fees is by opening a US or Canadian-based bank account to accept payments in the local currency, which comes with lower fees. However, it’s important to consult with your accountant as this move may have tax implications.
It’s worth noting that service charges and fees are part of doing business, so the fees that Amazon charges for receiving payments should not be a deterrent. They should be taken into account as you develop your sales and pricing strategies for your products on Amazon.com and Amazon.ca.
Con 3#: Taxes and regulations
It is essential for your business to comply with all laws related to taxes, customs, and product compliance to avoid penalties. While compliance may seem daunting, there are hundreds of thousands of other businesses that have successfully navigated these regulations. To ensure compliance and avoid potential risks, it may be beneficial to work with a consultant who has experience in this field.
How to sell overseas with Amazon
When you are ready to expand your sales and start selling your products on the US Amazon marketplace, you can begin the registration process online. After submitting your application, the approval process usually takes 72 hours. However, sometimes Amazon may ask for additional documentation, which can extend the approval process.
Once your application is approved, you can start implementing your Amazon product sales and marketing strategy and creating ads to increase your conversions on Amazon.
Developing your Amazon product marketing strategy
Amazon’s large customer base represents a tremendous opportunity for UK-based businesses to start selling products overseas. The process of getting your business approved by Amazon is relatively straightforward. However, to truly optimize your content and Amazon marketing strategy, it’s recommended to work with a marketing agency like CresZak, who has extensive experience in launching successful companies on Amazon marketplaces.
CresZak can provide support with:
- Submitting your Amazon sellers application.
- Developing a profitable pricing strategy that appeals to North American consumers.
- SEO-optimizing your product listings to increase visibility to customers in the US and Canada.
- Creating effective paid ads on Amazon to expand your international reach.
If you’re interested in learning more about how CresZak can help you tap into the over $263 billion market in the US or Canada’s Amazon, contact us today.
As you continue to grow your overseas Amazon business be sure to check out our other blogs for more insights.
