Selling on Amazon Internationally - Amazon Web Services

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Proven Amazon Course (PAC) Selling on Amazon Mentorship Series (SAMS)

Selling on Amazon Internationally

Webinar Transcript

Kat: We are so glad that you're here with us on this exciting webinar ? the SAMS, Selling on Amazon Mentorship Series. Students have been asking for this webinar for about six weeks, "When is it going to be?" Here it is, guys! Today I would love to introduce to you the Seller Engine team, Ioan Mitrea, Founder and CEO and Paul Cole, the Director of Community Engagement. As they start telling you more about themselves, you are going to find out why I wanted the very best experts I could find to teach you, the SAMS students about selling on Amazon international. Welcome to the show, Ioan and Paul! How are you doing?

Ioan: We're doing great. Thank you for inviting us and we're looking forward to talking to you guys and getting questions and helping you guys think about how to take over the world. The world is growing and it's ripe for entrepreneurs like you to take advantage of all the opportunities out there. So I'm going to start with a bit of our background. So you can understand why I'm so excited about selling internationally.

I was born in Romania, which is behind the Iron Curtain. Back then, you pretty much couldn't go around much in the country. So I was always excited about the possibility of going somewhere else. So I ended up studying in Paris. Eventually I made it to the US. Studying physics first, but I ended up getting to Silicon Valley and into computer science and business.

Back in 2001 when the last dotcom bust happened, I was laid off. I had a six month old daughter and I moved into the attic of my father-in-law. I was on unemployment benefits for a little bit. I needed to find something to do. On Thanksgiving Day 2001, I put my first books for sale on Amazon. It was a bunch of computer books I had from my computer career. I went for a walk and when I came back two hours later, I had already made $150. So that's how the whole thing started. I realized that I could make money on Amazon. I started looking on Craigslist for people who were selling books and then checking them to see what the sales rank was on Amazon to see if I could sell them or not. Back then you could buy things on eBay and sell them on Amazon. In a few months I was able to move my family into a warehouse that had a little studio on top and we were selling thousands of dollars a month worth of books. In a few months of doing everything myself, I realized that I needed software ? that I couldn't do everything by hand. I found this guy from China who started emailing people on Amazon about the software he had made that would help people list their stuff on Amazon and change their price.

So every step of the way, as I grew my business, I either got from people around the





world, or I sold to people around the world. That's how I was able to grow and move from one type of business to another and survive over the last twelve years and still be in business now.

That's where my passion comes from. The software company started from needing to automate my business and do things in a more efficient way, because I wanted to still have time to be with my daughter while running the whole business.

About a year later, I realized that there were a lot of opportunities selling internationally. From living in Europe, I had friends from pretty much all around the world. In Japan, France, UK, Germany. They helped me open bank accounts and open Amazon seller accounts in all these countries. I was able to start selling in all these other countries. You get much better prices on the books that are available here in the US, in all these different marketplaces.

That's my background. That's why I want to show you guys a few things to convince you how important it is to think about the international opportunity.

Back in 2002, it was just me. Over the last 11 years, we've grown quite a bit. We've got a number of people who help our customers in various capacities and are friendly and knowledgeable. We have a few pictures here of who we are.

I'm going to tell you a little bit about our product. Our entry level product is Profit Bandit. It's a really simple tool that you can use on your phone. You can scan any barcode wherever you are, on the go and see if something you just found on a clearance sale or a garage sale is worth selling on Amazon. This is just a one time fee. No monthly fees. It takes just a few seconds to scan a barcode. I wish I had that ten years ago when I got started. Now that everyone has smart phones, it's really easy to do this. You don't have to buy something that you realize later is not worth selling on Amazon.

The middle level product that we have for sellers that are a little bit bigger is Seller Engine Plus, which has gone through a lot of improvement over the last ten years. This allows you to list on Amazon, it allows you to do repricing, to send shipments to FBA, much easier than you do through Seller Central. One thing that people use it for a lot is to do inventory valuation. Whereas with Profit Bandit, you do things one by one while you're on the go, with Seller Engine Plus you can get whole lists from any supplier that you have, import your list into Seller Engine Plus and get all the data you need about that item from Amazon to make a decision whether you want to stock that item or not. This wasn't designed necessarily to begin with for this. It was designed as an all-purpose tool, but we noticed that people use it more and more for this. Everyone knows that the main question as you expand is, "How am I going to find more products, good products to sell on Amazon? How do I go from just picking things one by one as I go through a grocery store or a clearance sale to actually having suppliers and getting hundreds or thousands of items that I can sell?" This is a tool that can help you go to that next level in your sourcing.

Kat: This is awesome, Ioan. I appreciate your showing us this product, I've got a question about Profit Bandit, if you don't mind going back to that for a minute?





Evidently, a lot of folks listening are still using Amazon's Price Check app, which is what I recommend people start with, because it's free. They want to know why is Profit Bandit better? Can you tell us some of the information that we get on Profit Bandit that we don't get from the free app, please?

Ioan: Yes. The main thing is that Profit Bandit will calculate your profit based on a whole bunch of factors. So you can estimate your cost in there and then it will also automatically calculate your Amazon fees and your shipping. The Price Check app is for people who want to buy stuff on Amazon. Profit Bandit is designed for people who want to sell stuff on Amazon. It will show you how to calculate the profit. You can switch from seeing what profit you would make selling it FBA and also what profit you would make selling it out of your own warehouse. It also gives you the sales rank which is obviously a really important factor when you make a decision. And it will tell you how many competitors you're going to have. It will show you at a glance what the competition looks like when you sell on Amazon. So it gives you a lot more information and does a bunch of calculations for you so you don't have to figure out, "Okay, this sells for twenty dollars on Amazon, but I can buy it for eight, but after I pay commission, and after I pay for shipping, how much is left?"

Kat: Fantastic. And then you've got that secret bonus button for CamelCamelCamel also, which I think is very valuable.

Ioan: Yes, good point. So now you can not only get information from Amazon, but we get information from a whole bunch of other websites, one of which is CamelCamelCamel and eBay and a bunch of other ones. So you can see historic information on CamelCamelCamel. You have that on your phone. You don't have to open another window or copy-paste anything. It's right there, so the workflow is a lot faster. Because when you're in a store or at a sale, you want to be able to do things fast. Not to sit and think about it for a few minutes. We're also thinking about doing it so you can scan twenty items and it will give you all of the information later so you can scan even faster when you're at a library sale and you're competing with other people who are trying to scan the same stuff.

Kat: Absolutely. Thank you for going back, I appreciate that.

Ioan: Yeah. You're welcome. Please feel free to interrupt me with questions. This is supposed to be an interaction. I don't want to just go talk on my own. Any time you have questions, don't hesitate to interrupt me.

Kat: You guys heard him! Put those questions out there. Thanks, Ioan.

Ioan: The most advanced product that we have, that we launched last year, is a cloud application that allows you to manage your inventory on all the different Amazon sites at the same time. So you can have the same item that you have here and you list on , you can offer the item for sale in UK, Japan, Canada, wherever you want. You still keep it here, but in case it sells, it will even ship to the customer in Japan or wherever it is. It also allows you to maintain different prices in all the different Amazons and different pricing strategies on all the different sites. I general, it gives you a lot more flexibility in your repricing strategies.





For example, it allows you to set up a special list for all your items that have been in FBA for more than six months. It will automatically get updated, so if something hits six months in FBA and you say, "I want to discount it. I want to get rid of it. I don't want to pay long term storage fees." Or you can look at items that you are selling very quickly and say, "I've sold five of these in the last week and I only have two left. I want to be less aggressive. I want to raise my price. It's selling out anyway." This allows you a lot of different strategies for how to manage your inventory to get the most profit out of your items. You don't always want the most sales. You want the most profit. It's pointless to sell a bunch of things if you're selling them at a loss. This allows you to take your cost into account to make sure that you never sell at a loss.

Along with this, we also do other services. Some people feel they need more than software. So we help people figure out global shipping ? the best strategies for global shipping. Or we do customer support in foreign languages. We help you set up seller accounts in other countries. Or we help you figure out Amazon's performance monitoring. Sometimes if you have issues, warnings from Amazon, we've had a lot of experience dealing with those warnings to make sure you don't get picked out.

That was just an introduction so you have a background of who we are and what we do. The question is why sell globally? We have gathered a bunch of data that hopefully will convince you that it's really important to sell internationally. We generally like having lots of data. We gather a lot of information like that. Since we've been doing stuff on Amazon for more than ten years, with a lot of customers, we have a lot of ways for getting data from Amazon that you might not have in other places.

Now here's just an idea of what the population is in all these different countries that Amazon has opened marketplaces in. As you can see, all the other venues combined have a greater population than the US. This doesn't include all of Europe who also buys from the European marketplaces like France, UK and Germany. Also I'm not including here China and India. Amazon has just opened in India and they also opened in China a couple years ago. But at this point, it's a lot harder to sell in India or in China. If you have questions about that, I can address them later. India has some laws restricting foreign investment companies selling directly to Indian customers. China ? it's just hard. You have to partner with a Chinese company and it's hard getting your money out. So I'm just focusing on things where it's easy to get started now.

This is an idea of the traffic on all the different Amazon websites. Obviously, the US is the highest by far. There's twenty-five million people on every day. But there's also five million people visiting the Amazon Japan site. And almost five million visiting the other countries like the UK or Germany. So these are all the people you're missing if your item is not on Amazon Japan or Amazon Germany. Because they're not coming on , they're going to their home venue.

Now do these people have enough money to buy from you? They do. As you can see, Japan for example, Japan has a total GDP of almost six trillion dollars. If you combine the GDP of all these countries, it's higher than the GDP of the US. And in some cases, they're growing faster than the US. This means that there's more buying power.



You're missing about half the potential customers.



The other thing that's really important is that there's not as much stuff available in all these other countries and there's less competition. So obviously this is great. The markets are not as mature as the Amazon market is. Which means that there's an arbitrage opportunity. Just like you guys are talking about retail arbitrage, which is going from one store and selling on Amazon, there is international arbitrage which is buying in one country, selling in another country. Obviously, the more of an obstacle there is, the more opportunity there is. It's pretty easy for other people to buy from one store and sell on Amazon, so you can have a lot of competition if you do that. But if you buy here and sell in other countries, there's very few people doing that. So you can be ahead of the game and take advantage of that in this way.

Here's some data that we captured. We tried to find all the sellers on Amazon. This is not public information. This is just a rough number. They said, "We have over two million sellers globally." We tried to find all of the sellers and we found about 950,000 sellers in the US. These are all sellers who are active ? that have at least one feedback in the last thirty days, for example. As you can see, in Germany, there's only half that many sellers. And in Japan and France and Canada, there's only 150,000. So a lot less. Even fewer in Italy or Spain.

Obviously, they have something that you want. You want less competition. The other side of the coin is, what kind of items are available over there? What kind of selection is there? Obviously, the most selection is in . Its the most mature market in the Amazon universe. There's almost two hundred million items and it's growing all the time.

Amazon has a principle that they want to drive selection, price and customer experience. They are keen to have a higher selection of items than all the other Amazon marketplaces. So they are actually recruiting sellers to go and sell on the other marketplaces. You can see why. In the UK, for example, there's about a hundred and twenty million items for sale. But in Canada, there's less than fifty million. They want to have more sellers so they can add more items to the catalogue. This means that if you go and have something that's not available there yet, you're going to be the only one selling that item and you can set pretty much whatever price you want in the beginning, since you won't have competition.

We broke that down by category. So for example, this is the size of the book catalogue on the Amazon site. As you can see, there's about forty million books in the US and UK, France and Germany are pretty close. Which means to have a book here in the US, most likely it's already going to be part of a catalogue in the UK, France and Germany. You can sell it right away. You don't have to add it to the catalogue.

Here's some data about Electronics. It's a fast growing category, pretty much everywhere. You have about fifty million items in the US, about twelve in the UK, eleven in Germany. A lot of opportunity for growth there in Canada and Japan.

Here's Toys and Games. That's also a pretty popular one. As you can see, Canada has only recently opened the Toy category. They have less than half a million items, so





that's a great opportunity, if you sell toys, to add it to Amazon Canada.

This is how the catalogue is growing over time. This is just the growth in the Amazon catalogue between last September and May. If you think about it, on , there's about a hundred and sixty million items in September and a hundred ninety million in May. So somehow, in a few months, between Amazon and all the third party sales on Amazon, they managed to add thirty million new items. This means that if you're already selling on Amazon, this is confirmation that this is the right place to sell, because that's where all the selection is going. There's more and more selection. People are going more and more Amazon. It's the right place to be. Adding items to the catalogue is the way to get items where you don't have competition and you can set your own prices. This is happening more and more globally. Italy and Spain are the most recent addition to the Amazon system. They've almost doubled in size in the last nine months.

We have a lot more data like this in our newsletter. For example, last week we did a newsletter on Brazil, Russia, India and China. What Amazon's plans are in what they call "BRICs" countries. This week we're doing a newsletter on Latin America. How to sell in Latin America where Amazon has not established, but there are other options, other places you can use, if you want to sell in Latin America.

Now that hopefully I've convinced you guys that it makes sense to sell internationally, I'm going to go through more details and various ways of doing it. Obviously, the basic way is to just keep the inventory you have on and just make those items available internationally. That's the easiest and the simplest thing you can do. You can select the FBA global option, if you're FBA, or offer the global shipping option if you store your own items.

This is easy to do, but you're going to miss out on some sales. Because a lot of people aren't going to come to . They want to buy in their own country. They think that with Amazon, they'll be charged more for shipping and it will take a long time. You can still do this, even if you do something else. You should just be careful, when you make items available for international shipping that you make the right items available and not the wrong items. If you have some really heavy items, you probably don't want to make them available for international shipping, because of what reimbursement you'll get from Amazon. So you have to make sure that whatever software you use to price your items or manage your inventory allows you to select items that are too heavy or that have other issues that mean that you wouldn't want to sell them internationally. If you have more questions about that, we can go into them, later.

I just wanted to talk more about the advanced way of selling internationally. Because I think that's where most of the potential is. This means you would create a separate seller account on a distant Amazon site. This means you have your own seller account on UK and your own seller account on Amazon.co.JP. This means that people will find your items when they are in their home country. You can do this by keeping your items here and shipping them when they sell over there or you can actually ship them to FBA UK or any other country where Amazon is present now. Obviously the advantage is that you get more customers, you get higher prices over





there, less competition so there's more sales overall. But it's more complex. That's a disadvantage to think about and put into play.

I want to show you quickly why that's important. Why it's important to sell in the country where people are and not just expecting them to come to . This is a graph that shows what happens to a given merchant where they started to put their items in Amazon Italy. Before Amazon Italy was around, they were selling a fair amount of things to Italian customers from Amazon UK or Amazon Germany, as you can see the light blue lines. As soon as they opened for business on Amazon Italy, their sales went through the roof to Italian customers. As you can see, it eventually went to over a thousand sales a month to Italian customers. And Italian customers slowly stopped buying on Amazon UK and Germany. So in the beginning, they didn't know. They're still buying on UK and Germany. They didn't know Italy was open. But eventually after a few months, they stopped buying on Amazon UK and started buying on Amazon Italy. This is what has happened over the last ten years as Amazon has opened marketplaces in all these countries, people have stopped coming to and started buying from their own country.

Kat: I found that really interesting when you brought that up, Ioan, that the customer base is growing, growing, growing, so we don't see what is actually happening with the international customers. But as you showed that data ? it's still growing, obviously, but it's losing international customers. Not losing them from Amazon itself, but losing them from dot com. So all of those customers that used to come to dot com and buy my stuff, they've now found a supplier on Amazon UK or Germany or Italy, so that's where the customers are migrating to. I thought that was a really important point for folks to realize.

Ioan: Definitely. Amazon is growing globally. And consistently about forty percent of the overall sales are coming from outside of . So as they grow on dot com, they grow on the other countries, as they get forty-five percent of sales from other countries.

So I wanted to show an example of what the customer experience is when they buy from Amazon UK compared to what they would see when they buy from . To show you why it's important to be present there. So someone is trying to buy this book, "Dreadful Tales" on May 16th, or May 13th...14th, on Amazon UK. The delivery estimate was two to seven days. Actually it says, "Delivery speed: seven to twenty-three days." That's the standard delivery they expect from the UK. Now if they try to buy the same thing on , it's quoting them standard shipping for an average of twenty-one to forty-two days. The delivery window is almost a month later. This is the same day going to and Amazon UK. The delivery window is totally different. This is sort of a quirk of how Amazon quotes the delivery time. Actually when you ship from Amazon from here in the US to the UK, you can get your item to the customer in about a week. It doesn't take forty-two days. But Amazon is being conservative and tells them, "No, it can take up to fortytwo days." If your item appears on Amazon UK, you can benefit from that transaction feeling like a local transaction, even though you're shipping it from the US directly to the customer. It feels like a local transaction because they're buying from Amazon UK.





So I think that's really important. Because people want to feel like they 're buying from a familiar site. Even though the transaction ends up being complicated because you're going internationally, you can hide that from the customer by selling over there where they are.

Given all this, where's the right place to go first? If you want to dip your toes in the international water? These are all the options. Like I said, China and India are more difficult. Here's what we would recommend, based on size of the marketplace and sales potential: We would recommend UK, Japan and Germany. Being the top markets, or the more mature ones. UK is probably the best one to start with, since you don't have to worry about a different language.

The other big questions that we always get is, "What about international shipping? It's so expensive. It's so complicated. What am I going to do?" We have a few data points here just to show you that there's a huge discrepancy in shipping costs when you're talking about shipping internationally. There's so many different options. The volume that you have makes a huge difference in what kind of prices you can get. There's a lot of different options and services.

You're probably familiar with sending something first class or USPS Global Priority, which used to be a decent option ten years ago. Now it's gotten a lot more expensive and it's not always very reliable. Fortunately there's a lot of other options for shipping internationally that are cheaper and better than USPS. For a one pound package it might take you fifteen dollars an ounce to ship it USPS. If you use a hybrid service ? I'm going to tell you what that is - you can ship that same package for only five dollars, fifty. Depending on your quote to the end customer in the UK.

Here's what a hybrid service is: Basically you have the big international shipment companies like DHL, FedEx and UPS. They're very good at taking something across the ocean. But they're not good or cheap at delivering something to the end customer, the last mile. The best combination is to use DHL, FedEx for the leg that goes across the ocean, and then use the local postal system there. Each one of these companies has a service that does that. DHL's is called DHL Global Mail. UPS is called Mail Innovations for domestic and international stuff. This means that, DHL for example, will pick up your packages in bulk at your warehouse and get them to customs and the UK in a few days, put them into Royal Mail and get them to the end customer in the UK through Royal Mail which is their local postal system. This is probably, for medium size sellers, the best option - to use hybrid services. And there are a lot of them. Each carrier has a different service and they can use a different entry point into Europe. They will drop your things into Germany or France depending on what they use.

There's another option which could be cheaper or better, depending on your volume, which is to ship all your items in bulk to the UK. One thing that we do, for example, we have negotiated great rates with FedEx for air freight for international shipment. We can get things to UK for something like $1.70 a pound, if it's a few hundred pounds or more. We can let other people use our rates if they're better than what you can get from FedEx. You can just use our account number and pay us a fee and we

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