The Mercury Blog | Ideas & Insights | Major Tom

Pros and cons of selling overseas with Amazon

Written by Victoria Samways, Marketing & Brand Manager | Mar 17, 2021 10:24:00 PM

There are currently over 150 Million Amazon Prime subscribers; 20% of these subscribers shop on Amazon several times a week. If you’re not already selling your products in the US or Canadian Amazon Marketplace, you’re missing out on a huge market opportunity.

Amazon.com sales totalled $263 billion in 2020. The localized UK-version of their marketplace recorded a much smaller $26 billion in their UK marketplace. Based on these numbers alone, there is no denying the US-based marketplace’s influence in North America.

Source: Statista 2021

Expanding your business internationally and selling overseas with Amazon is easier than it may appear. Bringing your UK- or Europe-based business into North America through Amazon is often much more effective than trying to break into the market on your own. 

If you have a product that North American consumers need and want, consider opening an Amazon Seller Account in the US and Canada. Amazon makes it quick and easy to start selling on their North American channels, even if your business is based overseas.

 

The pros of selling overseas with Amazon

To re-emphasize the significance of Amazon in the US:

Here are the key factors that might attract your UK businesses to set up shop on one of Amazon’s North American marketplaces: 

Pro #1: You get a slice of Amazon’s huge market share in North America

Amazon is the biggest eCommerce retailer in the US with 49.1% of the market share! This shows that consumers want to buy from Amazon and that Amazon has a big influence on their buying decisions. The key to successful marketing is selling your products where your customers are. In North America, they’re on Amazon. 

Source: Finances Online 2021

Bringing your UK-based business into the US and Canada through Amazon’s marketplace can earn you a slice of this huge market share. Even a small slice could prove more profitable than just staying in the UK or Europe. This also presents a profitable opportunity to sell your more seasonal items year-round in a different market.

Pro #2: Save on shipping costs

Save on shipping costs by sending your product in bulk to an Amazon Fulfillment centre. They will take care of packaging and shipping orders on your behalf. You still have the option to ship products directly to customers as they are ordered, but that will increase your costs and time if shipping from the UK. You can use your shipping savings to provide more flexibility in your product pricing in the North American market or to put towards ads on the Amazon Network.

Pro #3: Fast to enter, quick to profit

Amazon’s process to onboard your products and start selling on their US and Canadian websites is quick (the registration and approval process is usually completed within a few days). Most sellers go live with their products within 3 months and 67% are profitable in their first year.

Once approved, you can start implementing your Amazon marketing and SEO strategy to start creating content and uploading your products.  

The cons of selling overseas with Amazon

No eCommerce solution is 100% perfect. There are a few things that may intimidate you from trying to sell overseas on Amazon. Knowing about these potential challenges in advance can help you create a better marketing and sales strategy to mitigate their impact on your business. 

Here are a few “cautions” about selling overseas with Amazon: 

Con #1: There is more competition in the US

Of the 2.5 million sellers active on the global marketplace, over 281,000 are in the UK and a whopping 1.1 million are in the US! This means that your products will have to compete with even more sellers in the North American marketplace.

Source: Statista 2021

A little competition can be good too. With the right eCommerce strategy, you can make your products more visible and attractive to savvy North American Amazon shoppers. 

Con #2: Exchange rates can be significant

When you sell your goods on Amazon.com or Amazon.ca, you will charge in the local currencies. To receive your funds in your UK-based bank account, Amazon will hit you with steep exchange rates and processing fees. 

You can save on these fees by opening a US- or Canadian-based bank account to accept payment in the local currencies with smaller fees. Talk to your accountant because this may have other tax implications you need to be aware of. 

Fees and service charges are part of doing business, so the fees Amazon charges for receiving payments don’t have to be a showstopper. It’s just something to be aware of as you develop your sales and pricing strategies for your products on Amazon.com and Amazon.ca.

Con 3#: Taxes and regulations

From taxes to customs to product compliance, it’s crucial your business complies with the laws set or face some hefty penalties. However, take comfort in the fact that if others can do it (and there are hundreds of thousands of them), you can too. To take out the guesswork and potential risks, we recommend partnering with a consultant that is experienced in this field.

How to sell overseas with Amazon

When you’re ready to start selling your products overseas on the US Amazon marketplace, you can start the registration process online. 

After submitting your application, your status is usually approved within 72 hours. Sometimes they may ask for extra documentation, which will add time to your approval process. Once you get the green light, you can start implementing your Amazon product sales and marketing strategy, and creating ads to maximize your conversions on Amazon

Developing your Amazon product marketing strategy

Amazon has a large captive audience. This presents a huge opportunity for your UK-based business to start selling products overseas. Getting your business approved by Amazon is the easy part. When you’re ready to optimize your content and Amazon marketing strategy, work with a marketing agency like Major Tom who has extensive experience launching profitable companies on Amazon marketplaces

You can get support to:

  • submit your Amazon sellers application,
  • develop a profitable pricing strategy that appeals to North American consumers, 
  • SEO-optimize your product listings so customers in the US and Canada see your products first, and 
  • create effective paid ads on Amazon to further expand your international reach.  

Contact us today to learn more about how Major Tom can help you get your share of over $263 billion in the US or Canadian Amazon stores.