Pros and Cons of Expanding Your Amazon Business Internationally

Pros and Cons of Expanding Your Amazon Business Internationally

Pros and Cons of Expanding Your Amazon Business Internationally

Thinking of Growing Beyond Borders?

Amazon’s international commerce has grown considerably over the last decade, particularly so during the Covid pandemic. Is your Amazon business well-suited for expanding into international markets?

Amazon currently sells in 19 marketplaces with more than 175 fulfillment centers that reach loyal Amazon customers. These marketplaces include:

  • North America (U.S. Canada and Mexico)
  • South America (Brazil)
  • Europe (Germany, United Kingdom, France, Italy, Spain, Poland, Netherlands, Sweden)
  • Middle East (United Arab Emirates, Saudi Arabia)
  • Asia-Pacific (Australia, Japan, Singapore, Turkey, India, China*)

*Amazon China has limited operations; due to language and regulatory requirements, this marketplace is for very experienced sellers only  

Amazon international sellers typically offer products that easily translate to other geographies. You wouldn’t, for example, sell a coffee pot that uses a U.S. standard 120-volt plug to the U.K. because it is incompatible with that country’s standard 220-volt outlets. And just because you have a hot market for a product in the U.S. doesn’t necessarily guarantee the same success as an Amazon international seller. 

On the other hand, as an Amazon international seller, you gain access to a broad new customer base and potentially profitable markets. Also, Amazon offers a number of services that make it easier to venture onto Amazon’s international platforms.

Whether Amazon international selling is right for your business of course depends on your product mix, marketing strategy, and business objectives. In this post we discuss:

  • The pros of Amazon international selling
  • The cons of Amazon international selling
  • How to get started with Amazon international selling
  • Tips for successful Amazon international selling
Amazon International selling

Pros of Amazon International Selling

The most significant advantage of Amazon’s international selling is instant brand recognition. There’s no need to advertise or promote a product to a new international region if you decide to sell there; Amazon already does that for you.

In addition, the Amazon European Fulfillment Network (EFN) offers the same advantages as domestic FBA (Fulfillment by Amazon). Package picking and packing, shipping, and inventory for European sales are managed by the EFN. If you are an FBA seller, you can make use of EFN with no additional registration or startup costs.

Multi-Country Inventory (MCI) is an optional international fulfillment program also offered through FBA. MCI provides the ability to send popular inventory directly to the countries where customers are buying, so Amazon can ship and deliver them faster. 

Registering and gaining approval to sell on Amazon international websites takes only a few days. Then you can immediately start to upload your products and create content. Most Amazon international sellers go live within three months, and by some accounts, more than half are profitable in their first year.

Finally, expanding internationally provides access to more markets. Capturing even a small slice of these additional markets can increase profitability. If you sell seasonal products, an additional advantage is you can now sell year-round to markets with opposite seasons.

Cons of Amazon International Selling

Amazon international selling can be tricky. For one thing, there are potential language and cultural differences that can impair effective marketing. Depending on your product niche, you could also encounter more competition. 

Also, keep in mind exchange rates. You charge customers in local currencies and Amazon charges you with exchange rates and processing fees. You could open a foreign-based account to accept payment in local currencies to obtain smaller fees, but there are tax implications best discussed with a knowledgeable accountant.  

Your business must comply not only with all local taxing requirements but also with customs regulations and product compliance standards. This can get complicated. There are consultant services specializing in helping you minimize any potential risks and ensure you comply fully with regulatory and tax requirements.

How to Get Started with Amazon International Selling

Register online and submit an application for Amazon international selling. Approval usually occurs within 72 hours unless extra documentation is for some reason requested. That’s all there is to it.

Selling Amazon Internationally

Tips for Successful Amazon International Selling

In considering what Amazon international markets to sell in, consider the following:

  • Are my products adaptable to Amazon international markets? 
  • Can you reasonably compete on price and brand recognition against Amazon itself in specific international marketplaces? 
  • Can I compete against other sellers in terms of price (allowing for differences in rate exchanges), brand recognition, quality, or some other unique differentiator? 
  • What are shoppers looking for in Amazon international markets? A Google Trends search can help identify whether your products match up to the needs of consumers in various international markets.

One of the best strategies is to identify a low-competition niche in an Amazon international market. Less active categories present more opportunities, especially for beginning sellers.

FBA Reimbursement

As an Amazon international FBA seller, be aware that a logistics system handling billions of orders worldwide likely makes some mistakes for which you are owed reimbursement. How much can this reimbursement add up to the individual Amazon international seller? Anywhere between 1% to 3% of your annual revenues. The more product you sell, the greater the chance of errors in handling your inventory and fulfillment. And the more product you sell, and the greater your revenues, the larger these mistakes can cost you. 

But doesn’t Amazon automatically reimburse you for its mistakes? In most cases, you are responsible to identify the mistakes and file the appropriate claims. Do you have the time to track the highly labor-intensive and frustrating bureaucratic process of Amazon reimbursement? Probably not.

GETIDA makes the whole process of obtaining your FBA reimbursement simple, easy and cost-effective. GETIDA software reviews the previous 18 months of transactions to flag instances that qualify for FBA reimbursement. If there are sufficient grounds to file claims, and only with your approval, we put a team of former Amazon employees to work on getting your reimbursement. 

There is no charge for this. The only charge is a percentage of approved claims. And the first $400 in FBA reimbursement is free. 

Sign up with GETIDA and let us do all the work of getting back your FBA reimbursements while you concentrate on expanding your Amazon international business.