1. Introduction
Marketplace sellers who have worked to build a strategic vendor relationship with Amazon typically have a strong understanding of what the vendor is doing to grow the manufacturer’s product accounts. For instance, a vendor may have a particular set of products; the vendor and seller will often have a discussion on what target market these products would best sell in and what kind of promotional offers or merchandising will be done in efforts to increase the product’s sales. Often, the goal is to increase the demand of the marketplace product in order to create a parallel between what the vendor has set for his products and what the merchant can try to accomplish later down the road. This tactic is much akin to trying to establish a market share for a particular type of product. When the vendee’s (the person who pays for something) desired market share is established, the vendor and seller can discuss a competitive strategy in an attempt to take more market share from competitors selling similar types of products. Step change products of marketplace and Amazon vendors have a great chance to increase sales for products using SP, and the knowledge of the target market combined with what a particular product at a particular ASIN is offering will allow these users to create very precise and very effective ad campaigns.
As referenced on a recent webinar, it has been said that on average, 33% of first-party Amazon marketing is primarily to help grow sales for a vendor or seller off of Amazon. Thus, they are using Amazon as a springboard to propel their e-commerce business into other markets.
Amazon’s Sponsored Products, also known as SP, is a pay-per-click advertising solution that puts your products in front of millions of Amazon shoppers. Whether you’re a new brand or a long-standing seller, this is a powerful tool that should not be overlooked. SP has recently gained a lot of attention for its features helping sellers make an impact on a global scale. We want to give a brief explanation of how SP can be a solution for making global growth simple and leveraging Amazon’s Worldwide program. This essay will make a case for Marketplace products’ desire to go global and will give a detailed explanation as to how both SP and Worldwide SPN can help sellers accomplish this.
2. Understanding Amazon’s Worldwide SPN
Countries present a variety of logistical, legal, and payment challenges that can make selling internationally seem daunting. With the SPN, Amazon has implemented a uniform system that overcomes these barriers efficiently and simply. The program unifies all of Amazon’s international websites into an easily managed interface, eliminating the need for a seller to maintain separate accounts on different national platforms. All inventory, orders, and communications are channeled into the seller’s familiar domestic marketplace account. From this centralized location, a seller can access and manage business in any or all SPN supported countries. Amazon even offers a translation interface to overcome language barriers, helping sellers to increase their international sales more effectively. The real advantage of the SPN is how it simplifies the process of entering and operating in foreign Amazon markets. For each product that a seller offers in a certain country, the program automatically creates an offer listing on that national platform using the same inventory data from the domestic marketplace. If at any time the item is no longer available for that country, the offer will be removed. This way, a seller can increase international sales without the hassle of separate inventory management and account maintenance. It is also possible to fulfill these international orders by using Fulfillment by Amazon, and having the inventory shipped from the seller’s domestic country. This saves the added cost and effort of establishing a foreign business entity to sell and store goods. In summary, the SPN allows sellers to offer their products in various international Amazon markets, engaging customers with a familiar shopping experience while minimizing the complexity and cost of global trade.
3. Benefits of Leveraging Amazon’s Worldwide SPN
Increased brand visibility: of engaging a new customer base. Amazon Global Stores gives customers access to items across Amazon’s worldwide platform. Through ASIN management, sellers will be able to list their offers for international marketplaces ensuring that customers will be able to shop their product in global store from any location. With brands gaining valuable exposure to new customers, Amazon Worldwide SPN will prove to be an invaluable step for sales and brand growth. New brands benefit from opportunities to test international markets without the need for heavy investment in market research and building a global infrastructure. This free service for access to the sells tool and the use of Amazon’s international marketplace helps to eliminate the risk and costs associated with export projects that tend to inhibit small and medium business.
Improved customer experience: Global sellers can enhance the customer experience by making their offers more discoverable. Amazon customers can shop for items that are eligible to ship to their delivery destination. By selecting their shipping destination country on the Amazon Global Store, customers will be able to shop for items that are available to ship to their location. Also, customer service issues will be improved by providing Amazon customer service for all SPN transactions. Amazon customers will be able to contact Amazon Customer Service with any issues related to their purchase, shipment or to return an item 24/7 in their preferred language. With this launch, Amazon has expanded its world-class customer service to sellers who feature and fulfill SPN items, making it simpler for sellers to resolve any issues related to international orders.
4. Getting Started with Amazon’s Worldwide SPN
To get started with SPN, simply login to your seller account and create a new campaign as you would normally do. If you are already engaged in a conversation with an account manager, let them know that you would like to participate in the SPN beta program and they can help guide you through the process. Step 2 is to determine if your products are eligible for the SPN program. In order to find out, look for the ‘View Instructions’ button and click to read further. If you are eligible, the following page will present you with a nature form that you must fill out and submit. Amazon will then examine your submission and notify you within three days if your products are eligible. The final step is to create a new network within a new or existing campaign and launch the ads. After doing this, you now possess the ability to easily manage your campaigns and view reports on the products in your network.
When setting up a product that you would like to send to multiple countries, you can now link these sites into a unified network. Creating a worldwide network allows you to consolidate a set of offers and specify certain ASINs to appear on the product offer pages of those ASINs in the network. When shoppers click on your product offer, you can increase the likelihood of converting the sale by providing them with a clear pathway to purchase the selected product. This is done by making the product offer page the last page a shopper views before adding an item to his or her shopping cart. You can measure the incremental effect by comparing conversion rates before and after implementing this strategy.
5. Setting Up Your Global Selling Account
Listing offers for sale on an existing product listing is an alternative way to offer your product to an international buying audience. This allows you to maintain a single product listing and offer items for sale at different prices in different countries. The third option is to create a new product listing. This will allow you to create a contrastive ASIN for the product in a specific region. This method may be best if you want to clearly specify the differences between the products or control inventory and pricing independently for the same product in different regions.
Navigating the Selling Account Management page will be your primary location for managing global offers. By filling in your seller profile, this information will be displayed on your global offers to buyers. From here, select the “Listing the offers” tab for a list of your products, then click on the “create a new offer” tab. Create a new offer is where you can select your source marketplace listing and set offer terms for the global offer. You can define a price to be displayed in buyer’s local currencies. Pricing can also be automatically set by converting from the price you define in your source marketplace listing. Step 2 is a guided process that allows you to define offer terms for the global offer and target new regions where it will be displayed to buyers.
In order to set up your Global Selling account, click on the Global icon in the bottom right corner of the screen. You will be directed to the SPN homepage where you will be prompted to set up a global Selling Account. Selecting “Enroll now” will prompt you to sign in with your regular account or create a new one if you do not have one. The next step is to fill in your seller profile. This information will be displayed on your global offers to buyers. When you have completed your profile information, you will then be directed to the SPN homepage. Click on the icon in the bottom right corner and select a category for a list of products. Now you can start to create offers for each product by clicking on the icon in the bottom right corner. (This is necessary for setting a global offer). Now you will have access to your Selling Account Management page.
6. Optimizing Your Product Listings for International Markets
The product title is the most important area to use relevant keywords. If you want a product to be competitive and rank well for a certain keyword, that keyword should appear within the title and be closely related to the product. The character length requirements for titles can vary greatly depending on the marketplace. However, Amazon recommends using 150-250 characters to ensure that the title is displayed properly.
Amazon’s international marketplaces have varying levels of saturation and demand for different products. It is important to research and identify the most relevant keywords for each product and country. The keyword research process should be conducted separately for each country, similar to the process in the US. After identifying the relative demand and relevance of keywords to specific products and countries, you should incorporate them into the product listings using the following steps.
Optimizing your listings for international marketplaces is crucial for the success of your international strategy. To ensure that your ASINs are optimized and able to compete effectively for sales, there are several best practices you should follow. These practices will maximize visibility, performance, and sales across each of your target marketplaces.
7. Managing International Orders and Shipping
A shipping template is a group settings and cost elements used to define major or custom shipping scenarios, such as standard and expedited shipping. Each template will have a location rule that determines which destinations it will apply to. Default settings are already considered a template. Note, international shipping rates are not calculated on a delivery duty paid (DDP), and there are no tools to pre-pay duties or to include them in the shipping rate.
For Domestic and International orders, a default ship-to location and method will always be used. An order without a destination and ship method already defined will use the default settings. You have the option to let each shipment method be fulfilled through your Seller Fulfilled Merchant Network (MFN) inventory, or to let it generate an FBA order for each method.
Amazon has shipping settings that allow you to set a “Ship-To Location” and method for all orders, and create shipping templates for more complex, custom shipping models.
The international order process is a shipping lane decision, since the order will be shipping from your source country to the end customer. In most cases, you can manage both international and domestic orders from the same marketplace account. This is important, since it allows you to use a single FBA inventory pool to fulfill orders to both international and domestic customers. FBA Inventory Placement can help reduce international transportation costs and streamline international logistics by allowing you to send your FBA inventory to a single country within the European Union, where it will be distributed across other EU countries at no additional cost to you.
8. Dealing with Currency Conversion and Pricing
In terms of pricing products in different marketplaces, Amazon allows sellers to select between an automated price or a fixed price as set on the selling platform. If the automated price is chosen, the system will calculate the price in the customer’s currency, assessing today’s exchange rate and adding 20%. This can be a relatively simple method considering the dynamic nature of exchange rates; however, the specific addition of 20% may not always be ideal. Whether using an automated or fixed price, a seller may compare the current and historical exchange rates with various other financial institutions and implement their own strategy of currency conversion and pricing via the Amazon FX summary report. This report is a helpful tool to plan pricing strategies in the case of substantial currency fluctuation.
A custom solution for the payout of foreign currency earnings is also available, allowing the seller to bypass the 1% conversion fee and the minimum check fee of $10 assessed by Amazon. Currency conversion is handled automatically at rates approximately 2% above the bank rate. To take advantage of this service, a seller must open a bank account in the desired currency at a qualifying bank. Currently, World Stores is the only other program with a similar global payment solution. With PayPal, sellers can open a foreign currency balance to be used for specific designated expenses, though this may not be an effective method of avoiding unfavorable conversion rates when transferring money to a primary bank account.
9. Handling Customer Service for Global Customers
Comprehensive Policies – Customer service should always refer to Amazon’s policies and SPN agreements to ensure that they are not misleading customers or violating any terms that could put the SPN at risk. This is the most common oversight for new SPNs, and simple avoidance of this can prevent many headaches down the road.
Shipping and RMA Information – Customer service should have extensive knowledge as to what products can be shipped to which countries. This information is often vital as there may be restrictions or high import taxes on certain items. If an item needs to be returned, it is also important to know the best way to have it sent back to the US.
Central Customer Service Portal – For account management, it may be necessary to have a separate account to handle the other SPNs. Email and chat support can still be done through one centralized account.
Free Phone Support from Anywhere – Skype allows for very inexpensive international phone calls; this allows customer service to take calls from customers in any country without breaking the bank.
Toll Free Numbers – It is best to acquire toll-free numbers for each country where products are sold.
Language Barriers – The customer service department should have language capabilities to match those of the countries where the products are sold.
Amazon expects its sellers to provide the same level of customer service to their international customers as they do for their domestic buyers. In order to do so, there are several things to consider:
10. Expanding Your Reach with Amazon’s FBA Program
The utilization of FBA holds lucrative benefits for the international growth of a seller’s business. Since the seller’s products are stored in Amazon’s fulfillment centers, they become Prime Eligible, whereby Prime members receive free two-day shipping on purchases made on Amazon. Being Prime Eligible is crucial as purchasing decisions for Prime members are heavily swayed by the presence of Prime Shipping. In the United States, Prime Eligible items have proven to substantially lower export barriers and broaden consumer reach. This effect is expected to compound abroad as Amazon’s Prime Program is established. Prime member customers also have access to Amazon’s one-click purchasing, meaning that the transaction from searching a product to purchasing it can occur very rapidly. The stronger presence among Prime Program customers will lead to an increased sales volume for FBA sellers’ products as it has already been shown that increased volume of FBA sellers can drive down storage and shipping fees, hence freeing up more capital for marketing activities.
Amazon’s Fulfillment by Amazon (FBA) program was designed on the same premise as Schreiber’s strategy: to eliminate barriers to entry in foreign markets. With FBA, exporters can store their products in Amazon’s fulfillment centers. Thus, utilizing Amazon’s various websites and their local knowledge of logistical procedures, Amazon will pick, pack, and ship sellers’ products, also providing customer service in the local language. In the case of customer returns, Amazon will also handle any problems including duties or taxes through the customs authorities at no extra cost to the seller.
11. Maximizing Your Global Sales with Sponsored Products
Amazon Sponsored Products works just the same internationally as it does domestically, except in additional countries around the world. To maximize global sales with sponsored products campaigns, it is important to first determine which products are most marketable in differing countries. You may find it more beneficial to sponsor a non-seasonal product in Australia, and a highly competitive product in the US. Geography is extremely relevant and it is beneficial to create manual campaigns for products in different countries to gain better visibility. Automatic campaigns are beneficial for gaining data on what types of products are most marketable in a particular country. Negative matching is another key feature to global campaigns, as it allows for refined targeting by excluding terms which aren’t converting to sales. Automatic campaigns matched with manual campaigns and additional keyword targeted campaigns overview the best way to maximize visibility in different countries. Remember, there are different basic units of money in different countries. One such unit is the Australian dollar, and it is important to know that all sales of products on amazon.com.au are paid in and settled in AUD. This must be taken into consideration when determining ad spend and the amount of sales needed to break even on advertising cost of sales. Of course currency exchange isn’t a problem when working with the Euro, as any sales on amazon.de, amazon.fr or amazon.it will go directly to your regular seller account in your home marketplace, and are easy to keep track of using the unified accounts feature.
12. Analyzing Performance and Adjusting Strategies
It’s important to understand when it may be time to raise or lower product pricing for certain market segments. After defining goals for the desired net margin to be obtained from international sales, pricing can be evaluated by comparing the conversion rate of sessions to sales with the volume of sessions. Higher conversion rates will usually mean that pricing can be increased. Pricing changes can be tested using the A/B price test included in the manage pricing and inventory section in the seller central. This will not only provide information on which pricing is more likely to drive purchases but also have the option of raising the price back to the original value if the change in pricing results in fewer sales.
In analyzing performance, it’s important to define goals and then evaluate performance towards reaching those goals. Goals should be defined for products and search keywords. Performance of individual products can be evaluated using the ‘depth of search term report’ described earlier. This can be accessed through the reports section in the seller central and enables one to see if their ASINs are showing up from shopper searches for specific keywords and if so, how many times they showed up and what the corresponding sales were. If the ASINs is not showing up in search results, it may be necessary to define different more relevant keywords.
13. Overcoming Challenges and Pitfalls
Exchange Rate Fluctuations: Selling in a currency different to your local one will always leave you open to losses or gains due to fluctuations in exchange rates. While it is best to seek expert advice and services regarding currency hedging or minimization of risk, the simplest and effective way to avoid significant losses is to regularly bring USD funds back to your home country to minimize exposure to foreign currency. This could involve selling down the foreign currency via USD to e.g. pay suppliers/manufacturers located in your home country.
Unexpected Import Fees and Taxes: When sending a product between countries around the world, there is always the potential to be charged an import fee or tax along the way. While this seems to be a pretty obvious statement, many companies often overlook the implications of these fees on the potential profitability of an item. Factoring in an import tax fee of 20% for example, can be the difference between profits and losses for a particular product. For targeted SPN products it is wise to check the individual country and item specifics for potential import tax or fees that could affect profitability or viability of that product in certain countries.
Overcoming challenges and pitfalls. [Summary] Executing SPN will bring great success, but it is not without potential challenges and pitfalls. Awareness of what may become stumbling blocks or deterrents to SPN will help you proactively foresee and navigate around them.
14. Scaling Up Your Global Operations
The depth of the guide is what makes it valuable, as no assumption is made and everything is explained, which means it is accessible to anyone willing to try to understand it. Global Growth Made Simple evaluates Amazon SPN program using the experience of an American organization named KollerCraft, which was established in 1943. KollerCraft uses the program to increase their distribution of fish and bird-keeping products to the EU and Japan in order to ease their transition into those markets.
The table of contents is a direct map of the contents in the guide. In method, its layout is written as though it were a project plan, which can be a valuable approach as it helps to establish the plan within the minds of those involved from the start. After reviewing the table of contents, the guide explains the subject and idea in a detailed manner. Each method is then systematically detailed in a logical structure, which is easy to understand. Every point is summarized at the end to ensure the points are easily remembered, weighted against the probability of the reader’s mind being a sea of information overload.
15. Case Studies: Success Stories of Global Sellers
In the interest of sharing knowledge on successful options and strategies with other prospective global sellers, all of the case study participants were selected based on success and innovation in site-by-site expansion and were willing to share the details of their success with the SPN team. These case studies can provide a very useful tool for prospective global sellers. By identifying with a successful seller profiled in the case studies, a seller can learn what specific strategies were employed by a similar seller on the road to site-wide success in the SPN program. The case studies can also serve as a tool for sparking new ideas on successful strategies that a seller may not have previously considered.
Over the years, we have worked with scores of clients and have seen a staggering number of success stories made simple by expanding onto one or more of Amazon’s worldwide sites through the SPN program. This section provides case studies of some representative global sellers in the SPN program. These case studies illustrate the wide range of site-by-site expansion strategies available to global sellers. The case sellers profiled in this section are just a few examples of numerous success stories on the program.
16. Conclusion
These objectives can be achieved with a combination of familiarization and hands-on experience. Amazon provides a multitude of resources and support features for sellers to customize their marketplace and gain awareness of global customers and competition. Yet many of the best methods and practices for successful international selling have been learned by top sellers through trial and error. Drawing from experiences of successful sellers, the SPN program has been designed to minimize risk and simplify the overall process of international expansion. This guide will both provide insight into unique aspects of international marketplaces and endeavor to make selling on any given marketplace a smooth transition for enrolled SPN sellers. A versatile range of global sellers will find that taking the right approach can lead to increased sales and business development, even with no further deviation from existing selling strategy.
Second, this guide aims to serve as a stepping stone and support tool for sellers interested in the SPN program, but have not yet taken the first step to list their items internationally. This resource will show potential SPN enrollees how taking the initiative to start with a global foundation can simplify future growth plans, and how the SPN program is an efficient, low-risk method to test international market waters. New sellers may choose to explore just one international marketplace, and they too can refer back to this guide for country-specific details on expanding further down the road. By following the same international selling principles from the start, sellers will avoid common pitfalls and complications attributed to trying to expand global sales at a later date.
Global Growth Made Simple: Leveraging Amazon’s Worldwide SPN accomplishes two main objectives. First, it is intended to be a comprehensive guide for sellers already enrolled in the SPN program, looking to take their business to the next level by expanding into additional international marketplaces. Through thorough explanation and real-world examples, sellers will gain an understanding of the benefits, requirements, and methods of selling in various international marketplaces. Sellers from any category can take the principles taught and apply them to their business strategies, in turn strengthening their global competitive edge.
