Strategy for Entering the Global Market Through Amazon – Entrepreneurs, did you know that competition in the world of commerce is getting tougher? Overcoming these challenges requires a strategy to position your business to reach the right customers and increase sales. One channel that we can use and develop is selling through digital marketplaces such as Amazon.
According to a study conducted by GoodStats, Amazon is the world’s largest sales website by market capitalization (USD 971.91 billion (Rs. 14.759 trillion)) as of January 2023, with 9.5 million. There appear to be several registered sellers (SellerApp, 2023). ).
Additionally, according to a survey conducted by Jungle Scout in February 2023, 45% of Amazon sellers earn between $1,000 (Rs 15,186 million) and $25,000 (Rs 379,658 million) per month. This is why we need to create a store on Amazon to expand our business target market. In this article, we will look at successful methods and strategies for selling on Amazon!
Why sell on Amazon?
Here are some reasons why fellow entrepreneurs should try Amazon’s export platform:
1. Expand sales to global markets
Amazon Marketplace allows us to sell our products on a global marketplace in more than 200 countries. The countries we have access to are:
- America (USA, Canada, Mexico). Europe (Spain, France, Italy, Germany, Sweden, Netherlands, Poland, Turkey, United Kingdom). Middle East (UAE and Saudi Arabia). Asia Pacific (India, Japan, Singapore, Australia).
Also read: List of European Trade Fairs, Opportunity to Promote Your SME Products on the Global Stage!
nation
Sales in 2022 (USD 1 billion)
Estimated sales in 2027 (US$1 billion)
United States of America
450.7
759.1
German
85.4
147.2
English
67.6
120.8
Italy
19.5
35.2
You
12
21.8
Amazon Top 5 Marketplaces Forecast from 2022 to 2027 Source: Statista
2. Increased customer trust
According to a study conducted by Zippia, there will be more than 197 million monthly active Amazon users by 2022. Meanwhile, a survey of 2,000 Amazon users conducted by Feedvisory found that 87% of users buy more products on Amazon than online. -location. – Other trades.
The data above shows that Amazon users trust Amazon as a shopping destination. So when we sell on Amazon, our store is seen as one that our customers can trust and trust.
3. Reduce operational costs
Fellow entrepreneurs, as you know, selling online can reduce the costs of running a business. You can reduce sales space rental costs, reduce offline marketing costs, and reduce inventory costs.
5 successful strategies for entering the global market through Amazon
What if I live in Indonesia but want to sell my products to America? Or even Europe? Don’t worry entrepreneurs, we can reach the global market through Amazon. Learn 5 strategies for entering the global market through Amazon below!
1. Analyze the business model that will be used
Business model analysis aims to find product identification strategies, target market identification, product positioning in the market, and business budget planning. Some business models that you can apply are:
all. private label (private label)
The term private label refers to products where we buy products produced by other companies and then resell them together with our brand products at a price lower than the market price. Examples include Alfamart bottled drinking water or Superindo 365 brand wet wipes which are sold at a cheaper price than other bottled water. The goal is to increase profits and reach a wider target market. Therefore, this business model is often used in the retail industry.
Read more: 5 Blackpink Success Strategies in the Global Music Industry (Applies to Small Business Products)
Rain. wholesaler
The wholesale business model is a business that purchases goods in large quantities from manufacturers at low prices and then stores them to resell in smaller quantities and at higher prices to retailers and end consumers. Examples of wholesale businesses that can be carried out by small businesses include wholesale clothing, cosmetics, vegetables, fruit, frozen food, food, soft drinks and daily necessities.
Seed. sold per piece
Retail is a business model that sells products directly to consumers for personal consumption, rather than to wholesalers who can resell the products through retailers. Examples of retail business models include minimarkets, supermarkets, hypermarkets, department stores, car or motorbike showrooms, bookstores, jewelry stores, toy stores, pharmacies and restaurants.
DropShipping
Dropshipping is a business model that allows us to sell products to consumers without having to stock and store the products we want to sell. When customers order products from our store, we will ask the manufacturer to send the product directly to the buyer because the product is out of stock.
This business model is suitable for small and medium businesses because the losses are minimal and the capital required is also less. Examples of products that you can sell through dropshipping include cosmetics, clothing, accessories, tools, furniture and fast moving consumer goods.
O’clock. homemade or homemade
The handmade model refers to businesses that sell handmade products that are generally not mass produced. Small and medium-sized businesses often use this business model as direct producers.
2. Determining the export destination country
The first thing we need to do to determine the export destination country is to carry out market research and research to find out which countries are suitable for our products. Next, we carry out a SWOT (Strength, Weakness, Opportunity and Threat) analysis from a behavioral, geographic, demographic and psychographic perspective to compare the strengths, weaknesses, opportunities and obstacles that arise between our products and potential export destination countries.
It is also useful to know the trade balance of countries intended for export purposes and to know whether the export activities we carry out will provide benefits for us. Once you have decided which country you will travel to and what products you will sell, you also need to learn the local language that you will use to do business. Local language skills are useful for fellow entrepreneurs to understand how to best position and promote your products.
Also Read: Ebay Indonesia Here are 4 effective tips for monitoring the global market:
Next, you should also research the laws that apply in your destination country. Because each country has different requirements regarding trade law, health law, product safety law, environmental law, customs provisions, excise taxes, copyright and consumer protection.
Research and understand the laws and regulations for which we are responsible. An example is the use of GMP or Good Manufacturing Practice certification which is regulated by the Food and Drug Administration (FDA) in America, and in Indonesia by BPOM whose application is CPOB (Good Medicine Manufacturing Method), CPOTB. (How to Make Good Traditional Medicine), CPMB (How to Make Good Food). Therefore, to export to areas that require this certification, internationally recognized GMP certification must be applied.
3. Develop a market strategy
One way to evaluate international market entry strategies is to use the 4Ps of marketing framework: product, price, location, and promotion.
all. product (product)
Study and understand the culture, climate and demographics of our target countries to ensure our product launch is successful. Which products are selling well? Why is this product selling so well? Is the product suitable for the country that represents our target market?
You should not sell just one product. Because more product choices mean higher customer search visibility for our product listings. From here we can also see which products will be successful in the target market. Next we review and understand the strengths and advantages of our competitors for our product category in the target country and determine competitive selling prices for our products.
Rain. price (price)
Selling through Amazon means having to adapt to additional costs that can change the profitability of your business friends’ sales. Here are some costs to consider:
After including these cost elements in the operational cost calculation, you can determine the appropriate selling price for your product on the market.
Read: 11 Ways and Means of Global Business Payments
Seed. placement
Placement refers to how we leverage our sales channels to help consumers discover and buy our products. In this case, Amazon offers the Fulfillment by Amazon feature to help you manage online sales from the same inventory location.
Dr. Promotion (Promotion)
To further promote your products to customers, we can advertise your products on the marketplace, create marketplace campaigns for double dates (e.g. 1.1, 2.2 and other double dates), offer discounts and enable free shipping.
4. Create a seller account and register products
The next step is to create an Amazon seller account depending on your destination country. If you register as an individual seller, you will be charged USD 0.99 (Rs. 15 lakh) for each product sold. However, if you register as a professional seller, it will cost you $39.99 (Rs. 606K) per month and you will not be charged for each product sold.
Amazon account registration process flow
After creating a seller account, register the products you want to sell in your store. When registering a product, you should pay attention to the product information components that you need to fill in, such as product ID (UPC, EAN, ISBN), product name, product description, product photo, and product keywords.
5. Determine product fulfillment and delivery methods
There are two ways to process and ship your products: The first is Fulfillment by Amazon (FBA), where you ship your products to designated Amazon warehouse centers and FBA pick, pack, ship, and service customers on a daily basis.
Business Model implemented by Amazon
The second is Fulfillment by Merchant (FBM), where you manage the shipping and fulfillment of your products to global markets independently, without the help of Amazon. From Indonesia, you can send goods abroad via international shipping services such as DHL or FedEx.
Both FBA and FBM methods have advantages and disadvantages as seen in the table below.
FBA (Fulfillment by Amazon)
Merchant Fulfillment (FBM)
characteristic
- Shipping is handled by Amazon. You don’t need a special warehouse to store your inventory. Increase customer trust by earning a special badge that shows you’re registered with FBA.
- Since you don’t have to pay for Amazon services, your profit margin is greater. You can control your product inventory needs independently.
loss
- If you sell large, heavy, or cheap items, you will incur additional costs that can affect your profit margins.
- It costs more to provide human resources, time and space for inventory management.
So, here are five strategies you can use when selling on Amazon. In fact, selling on Amazon will improve the integrity of your business and earn you more recognition from customers and fellow entrepreneurs.
When sending products to overseas buyers, don’t forget to pay attention to product quality and ensure the product meets international standards. Now, let’s enter the global market together. Now is the time for small and medium businesses to take a leap forward!
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