Successful Amazon International Expansion Tactics
Amazon international expansion poses a vast opportunity for sellers to expose their products to new markets and increase sales.
However, with opportunity comes risks and costs that need to be calculated before rushing into foreign marketplaces. With any business decision, sellers should do their due diligence to make sure their products are a fit in those international markets and that their current operations allow them to successfully sell within Amazon’s strict requirements.
We spoke with The Friendly Swede, an Amazon storefront with a focus on sports and outdoor gear – who was able to successfully expand to 7 Amazon marketplaces on 3 continents in approximately a year and a half.
In the following Q&A, Jonas Carlsson, CEO of The Friendly Swede, shares his company’s rapid international growth tactics and how advertising efforts contributed to the overall success of his business on the Amazon Marketplace.
Q. How would you describe the early stages of building a business?
A. “John Lundqvist founded “The Friendly Swede” from China back in 2011. The first time it was very hectic since he was the only one in the company but the main priorities from the start were to learn Amazon and have a clear focus on sales and taking care of the customers,” Carlsson said.
“John became aware of Amazon through contacts back in 2011. After discussions and our own investigations, he soon realized the power Amazon had as a sales platform and the potential there was for the future.”
Q. Which Amazon advertising platforms have you seen the most success from?
“Sponsored Products are mostly used to get more visibility in a product which will lead to sales, and deals are given more direct boost in sales. Both important to grow the business.”
“When investing you need to analyze each product separately regarding sales rank, reviews, price etc. to determine what kind of marketing the product needs. I would like to say that you need to build up an experience over time to do the correct evaluation and get the most out of the marketing dollars.”
“Of course, it’s also important to look at actual figures of sales and ACOS (average cost of sales) which you can collect from Amazon.”
The factors that have contributed the most to The Friendly Swede’s success on the Marketplace include:
- Knowledge of Amazon
- Products with a high demand on the market
- Customer focus in all aspects
- Collecting reviews
- High quality products
- Great people in the TFS team
“Our customers are the best product developers there are – we read every single review – the good ones, the bad ones, taking in all the feedback that we get and we are constantly trying to make it better,” Anna Nordlander, former CEO and now co-owner of The Friendly Swede said in an interview with Amazon (see below).
By 2012, The Friendly Swede had almost 4 million dollars in sales and by 2015, they closed out the year with over 10 million in sales – largely thanks to their international expansion efforts.
Q. Tell us about the Amazon International Expansion Process
A. In approximately a year and a half, The Friendly Swede expanded to 7 Amazon Marketplaces on 3 continents (as seen below).
“An initial challenge was that the market is different in each country – this due to national differences. This has an affect on how to handle customer support, contact with Amazon but also on the demand on our products.”
“As an example, just because you have a product that sells well in US doesn’t automatically mean it will go well in Japan. You need to spend time and find methods in how to handle the market in each country,” Carlsson said.
Amazon operates 11 online marketplaces (websites) worldwide, allowing sellers to grow their business internationally, independent of where their business is physically established. With Amazon, sellers can introduce their brand and products to millions of customers in Amazon’s marketplaces.
These marketplaces represent many of the world’s largest e-commerce opportunities. When you register to sell in one of these Amazon marketplaces, you gain immediate access to customers who know and trust the Amazon buying experience.
There’s a lot of advantages to expanding sales to one or more of Amazon’s marketplaces. One of the biggest benefits is that sellers can leverage the Amazon brand without having to foot the upfront costs of building business name recognition on their own in a brand new sales environment.
“Amazon’s European Fulfillment Network (EFN) is a powerful way to reach customers across Europe from a single marketplace account,” Pat Petriello, Marketplace Manager at CPC Strategy said in a recent interview.
“Amazon will handle picking, packing, and shipping your products across Europe from a single pool of inventory without you having to worry about importing or customs for each nation within the EFN.”
It’s important to note that market reach is not limited to these countries — Amazon customers come from 178 countries around the world. By expanding globally with Amazon’s international marketplace, the number of potential customers increases from 100 million in the U.S. to 250 million worldwide.
If retailers are already selling in one European marketplace, such as Amazon.co.uk, and are looking to expand to other European international marketplaces in Germany, Italy, Spain, and/or France, Amazon European Marketplaces allows businesses to expand without having to set up individual accounts in each new country. This account option allows retailers to handle operations in all European markets from one central account.
Want to learn more about how to manage product listings in all European accounts through one primary European marketplace account?
Tips on Amazon International Expansion
But the expansion into new markets does not come without it’s challenges including but not limited to issues involving:
- Compliance and legal
- Customer Service
To learn more, check out what the experts have to say: “How to Sell Internationally on Amazon“
According to Carlsson, 3 tips he offers Amazon sellers interested in international expansion:
- Take advantage of the Amazon knowledge that you have, but handle each country individually.
- Secure that you have personnel that can handle the local language.
- Analyze if the products you have are appropriate for the market you will enter.
“We have been able to have a faster expansion but we have also lower our risk since we now are less dependent on the development in a single market,” he said.
According to Carlsson, the target is to continue to grow The Friendly Swede across Amazon’s international marketplace from year to year.
“The basis to be able to continue our growth is to continuously develop products with high customer demand within our product areas outdoor gear and stylus pens. Of course with high quality and competitive prices,” he said.
“We will also continue to have a strong customer focus in all aspects, continue to have a friendly atmosphere so that we can keep and attract the right coworkers which is essential to grow a business. Our focus sales platform will in the future also be Amazon but we are also evaluating other platform for the future.”
Amazon International Expansion Resources:
- Amazon Global Selling, the Top U.S. International Marketplace
- How to Start Selling on Amazon Canada
- Buy or Sell on Alibaba, the World’s Largest E-commerce B2B Marketplace
- Selling Internationally on eBay: Features and Benefits for Retailers
- Tmall and Tmall Global: The Fast Track into China for U.S. Retailers
- Global Retail: The Biggest Challenges to Overcome When Selling Internationally