IF YOU ARE THINKING OF SELLING ON AMAZON – Wise Advice can help you with all the issues you will meet.
Just because Amazon is in USA and now Australia, does not stop New Zealand businesses using the selling platform.
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With 300 million users and a huge revenue, Amazon can offer a correspondingly huge reach and market for your product – much more than most other platforms you may be using online. When you consider they have a 49% share of the US market place it seems to speak for itself as successful (Source: eMarketer, July 2018). Amazon in Australia and all of Europe, could become your product’s marketplace with delivery to over 50 countries in Europe alone. Europe is Amazon’s largest overseas market with UK and Germany generating more than $20 billion in revenue.
So how would a New Zealand business approach this? The best way is to arm yourself with the pros and cons of how it works before you embark on signing up. With the knowledge of how it works and a clear idea of what it costs – you are in a great position to decide.
It is our mission to help as many New Zealand businesses to be forearmed so that the financial opportunities that are available by selling through Amazon are not missed by not being aware beforehand and that full advantage can be taken of the increased sales that Amazon can bring.
PROS
The pros are clear – huge market, huge organisation, wrapped around by amazing systems of shipping and marketing.
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Increased sales, finding new repeat customers who prefer shopping via marketplaces.
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The weight of a giant organisation behind your product can’t be bad.
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The opportunity to develop unique products, with a NZ touch that can’t be replicated easily – using
your talents for design and innovation to the fullest.
CONS
The cons need to be worked out, planned for and considered with pricing structures that are competitive.
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Firstly, costs. There are fees attached – selling plans (e.g. Professional Seller Accounts at $39.99US a month) and charges for the merchant facility and advertising. What to do?
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The ‘referral fee’ which is charged by Amazon every time you sell a product (like a commission) is usually around 15%. How to price your products?
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Also, if you ship items yourself (known as FBM ‘fulfilled by merchant’) and receive shipping costs from your customers, then Amazon calculates their referral fee with shipping money and/or gift-wrapping
fees included, if applicable. You can elect to have Amazon ship items for you (known as FBA ‘fulfilled
by Amazon”) and referral fees are still applicable.
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There are tax issues to be worked out because you are dealing in foreign currencies, with exchange rates that must be built into your accounting system. How to do this?
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Copycats – someone can look at your product and replicate it at a lower price, challenging your market and you may feel powerless to tackle this. There are some protections and ideas that can help
you focus on your brand and offer a superior service that will defeat the copycats. Where to start?
There is much to learn about the various options and Wise Advise is on a mission to get as many small business owners up to speed with selling on Amazon to expand their market and enable business growth. We can help you sort out the best path for you to take.
Click here to arrange a time to come and talk about it.
