Let’s set a scene. Your Amazon business is thriving, with sustainable sales growth and strong profit margins…
You’ve got a great customer base and are consistently dominant in your category – but all this success is limited to one marketplace.
At the back of your mind, you’ve been thinking about expanding your brand into new International markets for a while – after all, you want to continue to drive your growth, not hit a ceiling.
But you’re not sure what opportunities are out there for you. How big are these other International Amazon markets? How difficult – and costly – will the process be?
And of course, you don’t want to make a leap only to crash and burn, so how can you achieve the expansion you crave successfully?
The good news is that Amazon is a brilliant way to expand internationally.
Using Amazon’s unrivalled reach and efficiency brings vast potential to test the waters in new locations before you take the plunge.
Join us as we share our expert teams’ take on exactly how you can (and why you should) master international expansion through Amazon for your brand.
Just how big is the opportunity on Amazon internationally for brands?
It’s big. In 2022, Amazon generated $513 billion to rank as the third-largest company in the world on revenues.
Of course, some markets are larger than others, so let’s dive a little deeper into the scale of the potential of each:
Amazon US is by far its largest and most profitable market, with net sales in 2022 of $356 billion, up from $314 billion in 2021 according to Amazon’s published Annual Accounts.
Overtaking the UK in 2021, Germany is now Amazon’s second-largest market, with net sales of $33.6 billion in 2022.
Amazon’s third-largest market, Amazon UK recorded net sales in excess of $30 billion in 2022.
Amazon’s fourth-largest market saw net sales of $24 billion in 2022, but everything we see and hear suggests this may now be taking over the UK and Germany in 2023.
Other International Marketplaces
Grouped together in Amazon’s financial reporting, there’s also immense potential to be uncovered in the global giant’s other International markets.
- Canada was listed as Amazon’s fifth-largest market in 2020, and reported net sales of $11.56 billion in 2022. 2021 stats show 13% growth for Sellers in Canada, representing a per-Seller average of $85,000 in sales.
- France was Amazon’s sixth-largest market in 2020, and in 2021 reported per-Seller average sales of more than €150,000 with total revenues from activities in the country of €9 billion.
- India was Amazon’s fastest-growing market in 2020, and marketplace revenues have continued to surge, with 32% growth in 2022 even as other non-Seller related Amazon assets in the country, like Amazon Internet and Wholesale, have faltered.
- With marketplaces already operating across Europe, Amazon continues to expand into new countries across Asia, Australia and South America.
- These include exciting emerging markets, like BRIC (Brazil, Russia, India, China) countries Brazil and India.
- In 2023, further expansion plans include Belgium, Chile, Columbia, Nigeria and South Africa.
But why should a brand use Amazon to expand Internationally?
The simple truth is that using Amazon, with its colossal global reach, established infrastructure, robust fulfilment services and excellent cross-border selling support, offers one of the simplest ways there is to expand internationally.
Businesses can test out international expansion without needing any specialist in-market knowledge and expertise – it’s a low-risk and effective way to dip your toe and see what works for you before you commit to something more costly and permanent.
The high quality of Amazon’s market insights can’t be overlooked – with valuable data at your fingertips on everything from customer preferences to trends and demand patterns.
And there are other reasons brands should expand internationally with Amazon:
- It’s a great way to simply continue your existing Amazon business expansion.
- It offers a low-risk international expansion plan for a D2C business.
- It’s a brilliant option if you’re looking to test and learn in new markets.
- You can benefit from the existing latent demand in each Amazon market.
- You can benefit from the continual growth of every Amazon market – which offers even greater volume in the future.
In our recent webinar on scaling your brand into Europe through Amazon (watch on-demand here), FurnitureBox’s James Ewens explained how Amazon helped them take a step ahead of their competition – and discover unexpected demand in the huge Amazon US market.
First trialling a selection of their products in Germany via Amazon marketplace, FurnitureBox used the results to pinpoint how its brand was received and which products would work well before creating a longer-term strategy.
This approach also opened up a massive potential opportunity for them in the States.
“The US market has been the golden egg for us, and testing was invaluable. Modern and specific designs like ours don’t always work well there, so we’d never have guessed our products would resonate. But we let the data do the talking and the market responded incredibly well – opening an opportunity potentially 10x the size of the UK.”James Ewens, FurnitureBox
For any brand looking to expand into new international marketplaces, the opportunity to do so via Amazon is incredibly powerful, with new customer bases, sales and growth just waiting to be explored.
So how can brands grow their Amazon business Internationally – successfully and sustainably?
As with all big business moves, the key lies in having a strong strategic foundation at the heart of your expansion plan – one which will create momentum and be scalable when you’re ready.
Research the Market
Your starting point should be to dive deep into data from your market to identify countries where there’s a high latent demand for your products that you can tap into.
What are you looking for?
Consider your competition, the size of each market, consumer preferences and, crucially, the regulatory environment in your potential countries.
Some countries are subject to Amazon product restrictions, and some have different legal requirements relating to licences, permits or certifications – for example, the safety standards and certifications needed to sell electronic equipment can vary between borders.
You’ll also need to consider the relevant IP rights, Consumer Protection Laws, Tax and Customs Regulations and the rules around advertising and marketing to ensure your products are a viable fit.
Determine your Fulfilment Method
There are lots of options available, so you need to consider which fulfilment method will work best for you and your products.
You might choose to fulfil orders in-house, or use Amazon FBA (Fulfilment by Amazon).
A third-party fulfilment partner might prove to offer a best-of-both scenario for you, or you might prefer Multi-Channel Fulfilment (MCF), an option within FBA that covers all your sales channels.
There are obviously pros and cons to each and, for a deeper dive, we recommend this blog by our friends, 3PL supremos Huboo – but in a nutshell:
With in-house fulfilment, you fulfil all orders yourself, with your own storage space, warehouse and packing teams, packaging materials and shipping carriers.
Choosing this method can save money for those companies with the infrastructure to meet Amazon’s exacting demands, as well as meaning you’ve always got your stock close at hand – but it’s not for those without the right resources.
Fulfilment by Amazon (FBA)
For FBA (Fulfilment by Amazon) brands, Amazon handles almost all stages of the order fulfilment, from storage through logistics to shipping and customer service – you also automatically qualify for Prime.
Also key here is that FBA can make international expansion that bit easier, by taking all the complex logistics and fulfilment planning off your hands and offering access to Amazon’s vast international logistics network.
However, FBA comes at a price – storage limits can be strict, fees can quickly mount up, and you don’t have full control of what, when and how it’s packaged.
Multi-Channel Fulfilment (MCF)
MCF gives you access to all the benefits of FBA – Amazon’s massive, cross-border network, operational clout and fast, trustworthy shipping options – for all your orders, whichever channel a customer might purchase from.
You don’t have to be on FBA to use MCF, but if you are, your FBA inventory is used to fulfil orders from all your channels, making fulfilment a one-stop shop.
Outsourced Fulfilment (3PL)
Sometimes seen as offering a best-of-both option, outsourced fulfilment sees you sourcing a trustworthy fulfilment partner who provides a comparable logistics and operational service to FBA, but with added control over the hows, whens and looks of the products you’re sending out.
It can also offer better cost control over your allocated storage space, with the ability to ramp up and down for peak and trough periods.
The best 3PL operators work internationally, and have external carrier agreements that allow them to compete with Amazon’s fast shipping times.
Want to explore the best fulfilment options for your business?
Get Your Tax in Order
It’s likely that you will need to be registered for VAT/Sales Tax in every new international market that you plan to enter – a process which can be incredibly complex and daunting to brands new to it thanks to differing laws, rates, thresholds and Brexit.
In a nutshell, if you’re based in the UK or Europe and are selling internationally, the way that you deal with VAT differs based on factors like:
- Whether you have a physical presence
- Whether you’ve passed your country’s distance selling threshold for VAT
- Whether you’re selling within or outside the EU
- Whether you’re registered for VAT or not
This is an area where we heartily recommend you get specialist advice from tax experts, and we’re lucky to have the brilliant Taxually as our trusted partner for all Amazon taxation matters.
It’s key that you ensure that your products pass all the relevant compliance requirements for selling in your targeted international markets – with the areas you need to consider ranging from tax (see above) to product, environmental and International Trade compliance.
EPR (Extended Producer Responsibility) requirements are one of the biggest “new” issues for Sellers at the moment.
Under this legislation, which is designed to incentivise brands to be more sustainable and responsible for the impact of their products and packaging, producers are required to be far more significantly responsible for their post-consumer waste.
EPR applies to all Amazon Sellers, but only certain product classes.
With a phased introduction having begun in the UK in January 2023, legislation here currently affects packaging (it includes the plastic packaging tax), batteries and WEEE producers.
Further measures are due to affect these and other waste streams between now and 2027.
Internationally, matters become more complex with EPR applied differently in different countries – for example, in Germany, products sold on Amazon must have packaging and Electrical and Electronic Equipment (EEE) compliance.
Again, this is a complex area in which we highly recommend sourcing specialist advice. We work with industry leaders Valpak to help brands overcome these kinds of challenges – click below to get started.
Create International Listings
You’ll need to create product listings that suit your chosen international markets – whether that process involves you tweaking your existing listings or creating new ones.
When translating your listings copy into the local language, ensuring that your choice of wording takes account of any potential cultural sensitivities or “lost in translation”-style misunderstandings demonstrates your brand’s respect for the local culture, helping to build trust and consumer confidence in your new market.
You should also look at your prices and shipping options, adjusting as needed to match local expectations.
Optimise your new Listings
Once you have the basis of your international listings ready, taking the time to properly optimise them is crucial to hitting the ground running in your new market/s – just as it’s crucial to your overall Amazon success.
You should use:
- Keywords that are relevant to localised search terms
- High-quality images
- Detailed product descriptions
This will help your listings rank higher in search results and attract more new customers in your target locations.
Promote your Listings
When looking to gain a foothold in a new Amazon market, your PPC strategy is a key component of a successful campaign.
Amazon’s advertising tools offer plenty of scope to boost your visibility and brand awareness, putting your products in front of new international customers.
Sponsored Products, Sponsored Brands and Sponsored Display are all great options to consider and, once you’ve built up some momentum, tweak your strategy so it also focuses on driving sales, solidifying your competitive position and constantly eating into market share.
Monitor your Performance
As a top Amazon Agency with years of experience behind us, we can’t stress enough how crucial it is to use real-time data to maintain a deep and current understanding of your Amazon performance and financials when you’re driving your growth – and it’s even more so when you’re entering new markets!
From real-time profit reporting to sales and ads performance, keen inventory management to pricing optimisation – and more – these stats will help you grow, consolidate and drive your position effectively and efficiently as you expand, giving you the agility you need to respond quickly when opportunities or threats arise.
In these new markets, you should also keep on top of customer feedback, using it to gauge how well your products are being received in your new market/s and adjusting your listings, pricing and marketing strategies accordingly.
Comply with Local Regulations
As mentioned above, regulatory environments can change from one country to the next, so it’s critical to ensure that your products and presence comply with all applicable local regulations and tax laws.
To navigate these regulatory environments effectively, take the time to properly research and understand the specific requirements of the countries or regions you wish to sell in, reviewing Amazon’s guidelines and consulting specialists who can advise on compliance with local laws and regulations.
Need expert help with this, or anything else we’ve covered here?
Our team of Amazon marketplace veterans are here to assist with every aspect of your Amazon business, using our years of frontline experience to drive your growth, sales and profitability to new heights.
Ready to take your Amazon business to the next level?