When To Sell Internationally on Amazon

In the beginning stages, most Amazon sellers will experience a combination of both excitement and fear when it comes to selling products internationally.

Common concerns like credit-card fraud and shipping delays may seem overwhelming at first, but with the right guidance sellers can avoid common mistakes and simplify their global expansion process.

The decision to go global is often driven by a combination of many factors, some financial and others marketing, merchandising or operations related.

Examples of factors involved in a decision for a company to expand globally:

Example 1. “We’re seeing a lot of traffic on our website from global buyers and are even getting product inquiries and questions from global buyers about our products, shipping policies and our payment options.”

Example 2. “We’re looking at our options for driving traffic and conversions and feel like our domestic (US) growth is either insufficient or unsustainable to meet our targets.”

Example 3. “Our products or brands are truly unique and fill a void in the market for global buyers.”

Example 4. “We have a potential advantage or incentive in a certain market because of where our products are produced and should explore opening in that market.”

Example 5. “We’ve seen a lot of sustained success on the Amazon Marketplace (US) to date and see the logical next step as replicating this success on other Amazon platforms.”

Experts Advice: How To Sell Internationally on Amazon

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 as seen below:

amazon1

Benefits of Selling Internationally on Amazon

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.

pat-petrielloAmazon’s European Fulfillment Network (EFN) is a powerful way to reach customers across Europe from a single marketplace account,”  Pat Petriello, Director, Amazon Sales Acceleration Program at CPC Strategy said.

“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.”

“For instance, you can ship your inventory into Amazon Fullfilment Center in the UK and any customers across Europe can have that product shipped directly to them. You can also use that pool of inventory to list the product on other European sites such as .de or .fr as long as you list that product in the native language of that region’s marketplace.”

david-cooley“You can think of EFN as pooling all our inventory in one place to ship to any country in Europe (that has an Amazon Marketplace of course) as opposed to MCI (Multi­ Country Inventory) where you send in your products to the individual country’s Fulfillment center,” David Cooley, Marketplace Channel Analyst at CPC Strategy said.

“EFN is easier on the seller but will take a little bit more time for a product to be shipped to the customer from the Fulfillment Center. MCI is a bit more difficult for the seller initially because they must send their products to individual countries but the ship time from FC to customer is shorter.”

Challenges of Selling Internationally on Amazon

ethan“International expansion presents sellers with sizable growth opportunities, especially if you can be an early mover in your category. However, like most things in life, with all new opportunities come challenges, and Amazon is no different,” Ethan Pilkenton-Getty, Retail Search Manager at CPC Strategy said.

Below are some of the more common challenges we see seller’s run into when expanding to other markets:

1) North America Unified Account (NAUA) FBA Inventory Separation – A common FBA inventory issue that arises, specifically when using a NAUA for expansion into Canada, is that you need to designate a separate sku for all Canada FBA inventory. This can be something as simple as adding a “-CA” to the end of your current sku.

While on the surface this seems like a minor adjustment, it is important to know, if you don’t separate your US and CA inventory by creating a new sku you can confuse Amazon’s inventory system and create some major inventory allocation issues within your US account, which can heavily impact short term sales.

Now, if you have an internal inventory management system that can handle the separation of these skus, than this approach is a good solution and will save you an additional seller account fee.

However, if your current inventory management tool has limitations, than it is probably a better bet to register for a separate Canada account instead of a NAUA. The separate CA Seller Central account will allow you to avoid using separate skus for the small price of an additional monthly professional seller account fee.

2) Reviews Will Not Carry Over – Reviews are specific to the marketplace that product was sold in and will not transfer. So for any items or ASINs that are new to an international marketplace, you will be starting off with no reviews, regardless of your review history for that ASIN in the US marketplace.

However, with that said, there is a section at the bottom of the detail page that highlights reviews from other marketplaces.

So not all is completely lost and while this section is less prominent and below the fold, it still does give customers access to your US reviews and also provides Amazon a reference point to use when evaluating products for lightning deal and daily deal approvals.

3) Adjust Prices Accordingly – Selling across international borders encounters additional costs associated with paying duties, taxes, and applicable customs brokerage fees.

When evaluating your price point you will want to make sure you calculate all these fees and adjust your price point accordingly.

A common practice is for sellers to pass most or all of these additional costs onto the buyer to keep margins profitable. However, you also want to do your market research to see where competitor’s price points are landing before finalizing your pricing strategy.

jamie“Generally, Amazon Canada PO’s will be about 10% of what they are in the US,” Jamie Fraser, Marketplace Channel Analyst  – CPC Strategy said of working directly with Vendors selling in Canada.

“For some categories, Amazon may require strict compliance testing which can be expensive.”

“Certain compliance requirements may also  require sellers to have to change their packaging (for example- instructions have to be in both English & French on the packaging in some categories).”


We spoke with 3 additional experts in the international online retail space to discuss what sellers need to know in order to distribute their products internationally.

Bobby Frank – SVP Business Development – Aeropost Network

Q. What are some of the major challenges to sell internationally?

bobby-frankThere are many. The first is the learning curve on what it actually required for entering new markets. Unless you’ve already been doing business globally, it can be overwhelming.

There are so many areas that must be considered and, since they’re all important, it really helps to group them into categories, compartmentalize and prioritize.

Some broad categories that should be thoroughly explored include:

Business issues: Which markets should we enter? Do we need local business entities?

Financial issues: How are we going to deal with currencies? Do we need a local bank account? Can our credit card processor accept payments from global buyers? How are we going to manage fraud?

Technology issues: Do we need to change our checkout to accommodate new address fields? Are we going to calculate duties and taxes and present those amounts to the buyer? Does our eCommerce platform support multicurrency pricing and multilingual views?

Product issues: Do we have all the product info we need to sell globally (like country of origin)? Are there any import restrictions on our products?

Pricing issues: Should we price our products in USD or local currency…and if local, how do we handle the conversion? Should we collect duties & taxes? What’s best: all inclusive pricing or transparency?

UX issues: Should we translate our content or is English good enough?

Compliance and legal issues: Are there any US government regulations or policies we need to consider? Are there any labeling or packaging requirements for the market? How about privacy and security – can we collect the same information from global customers using the same methods as we do here in the US?

Shipping issues: How do we control shipping costs? What are the options for fulfillment? What needs to be in the box when shipping internationally? Should we be looking at positioning inventory locally and fulfilling from there?

Customer Service issues: How do we respond if a customer from Brazil, Russia, Japan or another non-English speaking country contacts us? Do we need to adapt our usual customer service hours to support global time zones? How should we handle returns?

Marketing issues: How do we create awareness locally? What kind of promotional calendar do we need to put in place? What kinds of things do people buy in these markets? Are there local exposure points where we absolutely must be present?

Political issues: Do we need a contingency plan in the event of political instability? What happens if trade relations change with the countries where we’ve invested? How do we

Q. What are some actionable tips you offer sellers who want to sell internationally?

The most critical first step is to quantify the marketing resources available and commit to the globalization program over the long term.

The reality is that going global takes a lot of effort and even if you have the best product, the most customized checkout and user experience and the best localized content, people in global markets are not going to simply stumble upon your website and start buying.

Generating demand is a long process, just as it is in a domestic setting, and there are far too many stories of companies doing all the right things on the front end with the expectation of fast success. Unless expectations and resources are aligned, budgets get missed, priorities change and disappointment results.

The bottom line is that wild success is possible but it takes a lot of effort to establish a brand in global markets. Go in with your eyes open and your chances improve drastically.

About: Aeropost helps consumers buy online, processes payments through their local payment platform, manages importation, performs last-mile delivery and provides local customer service.With a workforce of +1,000 from 45 countries, the company processes tens of thousands of items each day for millions of consumers across the LATAM region.


Pauric Logue – CEO – Wiseloads

Q. What are some of the major challenges to sell internationally?

pauric-logueThe number one issue is the value-added tax (VAT). People know how to sell on Amazon because they are already doing it in America.

They can send their items to FBA , (if they are already doing it in America, there’s not much difference there), but, the biggest issue I see for sellers is VAT. Many sellers don’t understand it.

And it’s not just American sellers, a lot of European sellers don’t understand VAT either. It can be very complex.

Online sales are happening at such a rate that some accountants are not set up for sellers doing business to the consumer from one international jurisdiction to another. That is the biggest obstacle I can see right away.

If it’s specifically towards Amazon, obviously currency as well. Returns (ex: addresses) and storage fees are other issues sellers are having from a logistics point of view. The VAT is probably the biggest obstacle but everything else is easy enough to be rectified.

Sellers could have their goods sent from China to America to Europe, but that doesn’t really make sense, (in comparison to products sent straight from China to Europe). But, sellers want to sure these products are checked and the FBA prep is done prior Amazon Fulfillment.

Even if it costs more – sellers want reassurance that when products are being sent over they are properly checked.

This way Amazon can’t turn around and say – this product wasn’t properly sent or the quantities were incorrect, ect. They just want somebody on the ground to check the product(s) before it goes into FBA.

Q. What are some actionable tips you offer sellers who want to sell internationally?

What we specifically try to do is help sellers get their product into other platforms (Amazon & beyond) – we help introduce our clients to many other platforms and shopping channels all over Europe to help increase their sales there as well. We do logistics in Europe, but we’re also helping to sell products in China and Russia.

Everybody at the end of the day wants to sell – and sell more. What we do is open as many doors as possible, so that they can sell as much as possible. The more they sell the more we send out the door – so it’s a win win for everybody.

Europe is still young in terms of online selling. UK is probably the oldest, but the rest of Europe is still very hungry for products. More and more people are buying online – so it’s growing all the time. There’s a 14% increase YOY in Europe and it’s growing at a good rate.

There’s a big appetite for US sellers to get into Europe because most of their markets are quite saturated in America.

The other thing I’ve noted, is there are a lot of sophisticated sellers using technology to their advantage. There are many ad software programs in America, that are not available in Europe yet, which can obviously differentiate a good seller from a great seller.

About: Wiseloads specialize in eCommerce Logistics. Logue was a featured speaker at PROSPER 2016 on “Taking the Mystery out of VAT Compliance in Europe” and has provided solutions for all manners of logistical issues for the past 15 years. He helps sellers expand quickly into new markets with solutions in place regarding VAT and Duties. 


Claire Taylor – CEO – SIMPLYVAT

Q. What are some of the major challenges to sell internationally?

international selling amazonSelling internationally is not just about the different rules and regulations, it’s about a different mindset and the way people do things and the processes.

We are really familiar with this in Europe, because we trade a lot with the Germans, French and the Italians but I think for America sellers – it’s critical to have a different cultural mindset.

It’s not just languages, there’s cultural nuances such as payment preferences. For example, in the UK we like to use Paypal, while the Germans prefer a wire transfer. It’s understanding the psyche of each individual country in addition to the different rules and regulations that they have to adhere to.

The Consumer Rights Directive (which looks after consumer rights for the online sellers) is European wide but different countries apply different rules and regulations (Example: refunds and returns : How are they handled? What does a seller need to know?).

And then of course there is the elephant in the room – the international VAT.

A lot of people don’t even realize that they have an obligation to VAT – let alone know where to start looking. You can only look for information on something if you’re a aware of it in the first place. It’s about education and getting the message out there because for sellers who do not abide by the VAT obligations in Europe – there are severe consequences such as penalties and interest payments.

Europe tax authorities are very proactive. They’ve got special units that troll the internet looking for non compliant sellers. They really are aware of the revenue that they can get from the ecommerce market.

We’ve got VAT as opposed to the American sales tax but with VAT – the money that’s collected on the final sale is money that the tax authorities get to keep in the European Union (EU) – so they are really proactive about hunting it down.

There’s also been a lot of lobbying – especially with UK sellers because there has been many non-EU sellers flaunting the rules and not complying with local VAT obligations. Now there is a movement towards tightening up on that. Sellers that were getting away without complying to the VAT rules previously – won’t be able to get away with it much longer.

So, what happens if a sellers gets caught in violation of VAT?

The tax authorities will come down on them really hard and it can be business critical.

We’ve got people on our books that were selling quite innocently on Amazon and thinking they were complying with the local rules and regulations charging the UK VAT  – but then in this instance, the French and German tax authorities showed up last year both with a back tax bill of one million euros, each!

There’s definitely some sellers that are not aware of the VAT but of course there are some people who think they can get away with it. There’s a whole mixture, but what happens is when people sell online, they don’t think societal rules of taxation apply for some reason.

There’s an awful lot of ignorance and it’s almost like the ecommerce explosion has left the international VAT rules behind a little and the tax authorities are now trying to make sure that they get revenue for what they see is rightly theirs.

It’s interesting times to be honest. We work with dozens and dozens of businesses, who are now trying to backtrack and make sure that they are VAT compliant going forward.

This is why it’s so important to educate sellers, so that they understand and don’t get any unwelcome surprises.

VAT is one of the biggest challenges because it can absolutely ruin a business if they don’t get it right.

Q. What are some actionable tips you offer sellers who want to sell internationally?

The first thing any seller needs to know is if they are selling from the US into Europe, they need the Economic Operators Registration and Identification number (EORI) issued by the EU Customs Authority to identify importers and exporters.

When this number is issued – we get it closely aligned to the VAT number. When goods are imported into the EU – the import VAT will be charged on those goods. But if you use your own EORI number to get your goods into Europe- this facilitates the return of the import VAT (once the seller is VAT registered, of course).

If Amazon sellers are going to be using Fulfillment by Amazon (in the UK, for example) the movement of the stock into FBA for private consumers triggers an immediate need to register VAT in the UK.

This is also true of using Fulfillment by Amazon in Germany, France, Italy, ect. So, sellers should really be aware before they move their goods into those FBA centers to get the VAT compliance right. It’s really important.

If you want to test the International / European waters cheaply (in terms of compliance), we would suggest using FBA in the UK and then leverage the EU VAT distance selling rules.

These rules state that if your stock is in the UK – then you’re going to charge 20% VAT on sales to any EU private consumer up until the point you reach set thresholds (set by the EU tax authorities).

So, for example, in most countries it’s a threshold of 35,000 euros ($38,000). In other countries such as Germany it’s 100,000 euros ($110,000) so you sell goods to private consumers using the UK VAT to a point that you hit those thresholds in those particular countries.

So, for example, you can have 100,000 pounds of sales in the UK, 30,000 euros worth of sales in France, 110,000 euros worth of sales in Germany – so here you would be charge UK VAT on your UK sales and your French sales, but you would have to register in Germany and charge the German VAT on any sales over that 100,000 euro mark.

Essentially once you are registered in one country, you should leverage the distance selling rules because it gives you time to gauge where your target international market is and how much traction your products have in that country, ect.

About: SimplyVAT.com’s aim is to help businesses selling online to trade internationally and successfully without being burdened by complex VAT legislation. Claire has worked in international VAT for 18 years helping SMEs and multi-national companies.

For more on how to sell internationally on Amazon, email tara@cpcstrategy.com

Additional Amazon International Resources:

Amazon Global Selling, the Top U.S. International Marketplace

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

 

 

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About the AuthorTara graduated from the University of New Hampshire with a B.S. in Journalism / Business. Her passion for creative publishing and quality reporting landed her work opportunities at several companies in Massachusetts, New York and California. She is a leading voice behind CPC Strategy’s Blog. See all posts by this author here.