Going Global with Amazon Marketplace

1 March 2016

Helping Australian Businesses sell on Amazon

As an extension of our marketing services, we also help Australian companies get their products listed on Amazon USA. It’s not as simple as opening up an Ebay store by any stretch and the compliance is substantial. If you want to do this yourself without experience, good luck

Amazon in America vs Australia

One of the largest companies in the USA is US-based online retailer Amazon.com. It is the single largest e-commerce marketplace in the world and most Australian businesses don’t realise they can use it, with a little bit of help from us.

In Australia, Ebay and a smattering of semi-famous online retailers account for much of the e-commerce in the country. Failing that, Google is the starting point for most people looking for an online retailer.

In USA, it’s completely different because Americans visit Amazon by default as a starting point for online shopping. The USA has a far more mature online market but, Amazon is streaks ahead of the competition.

Amazon’s recent purchase of DAI Post in response to Booktopia’s dominance in the book retail market is one step in a line of suspected future purchases of distribution centres.

How Amazon Works

Amazon is essentially a distribution company with a marketplace interface helping buyers and sellers transact. Amazon holds the purchased funds in escrow until the consumer is satisfied and the retailer requests a payout. They then retain a percentage of the purchase price and everyone is happy.

Marketplace Advantages

Sellers don’t have to invest in maintaining a website with complicated payment systems and buyers can trust the fact that their goods will arrive.  However, this is where the problem occurs for sellers wanting to set up their store. To prevent unscrupulous enterprises selling goods and tainting the trust in the brand, Amazon demands a hefty bevy of compliance.

Drop Shipping with Amazon Fulfillment Centers

The main reason the company has grown exponentially over the past few years has been through distribution efficiency.  Sellers can extend the regular marketplace service to include the use of Amazon’s storage distribution facilities for an added cost. In doing so, the seller can limit inventory costs and risk while they can concentrate their efforts on sales.

Amazon Advantages

  1. Amazon picks up the cost of credit card processing. Business owners are already aware of the cost associated with processing credit cards and maintaining the equipment and service contracts. This cost is included in Amazon’s commission when retailers sells their goods through the marketplace. Physical card processing solutions cannot be used with online sales. By using Amazon, the business owner need not invest additional funds in specialized software, nor do they need to create new processing service contracts.
  2. Amazon provides the online sales channel. By standardizing product descriptions, goods become more discoverable. The retailer has instant access to the prices and movements of both identical and related products, providing valuable metrics and the ability to price products competitively.
  3. Amazon develops and supports the online channel. With the technology of sales and communication constantly evolving, a business that maintains its own online presence must employ personnel for the task. When dealing with financial information and the management of online inventory, this can mean substantial additional salary overhead.
  4. Amazon brings the world to Australia. The geography of Australia has limited the cost-efficiency of its overseas market to the nearby region and to industries that can achieve economy of scale. By standardizing the price of shipping and providing communication and feedback transparency in the shipping process, Amazon has reduced the apparent cost of mail-order purchasing from Australia. Local businesses taking advantage of this communication stand to substantially expand their potential customer base.

Steps required to set up a store and sell products on Amazon

  1. Have a US entity (typically an LLC) with bank, tax and address details
  2. Barcodes – all products require a unique barcode – EAN or UPC typically
  3. Product details – the requirements are extremely extensive here including weight, packaged dimensions,
  4. Category definitions – you need to be adept at figuring out which product category to assign each product into. There’s 84 000 different product categories by the way
  5. Shipping profile – you need to set up specific shipping profiles for your store
  6. Imagery – all images are required in a specific format with neutral white background and of appropriate quality
  7. Spreadsheet file upload – good luck uploading each product manually one by one. Even better luck configuring your spreadsheet correctly to use the batch upload option.

 

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