Amazon markets expansion into Europe, including Poland in March 2021, creates new growth opportunities for many manufacturers, brands, and retailers. However, trading in these markets can be tricky. For this reason, we have created an insightful To-Do list to help you better prepare before entering Amazon markets.
Estimate pros and cons before launching Amazon markets
- What Amazon is doing in the United States is a good indicator of what we might expect from markets in other regions. It is a much better indicator of what is bound to happen in Poland, Sweden, or the Netherlands, all of which are pretty limited in terms of available Amazon products.
- Entering new markets requires an understanding of the limitations in those territories. Before launching sales, it is also essential to make sure your business has the right infrastructure and capabilities.
- A big challenge when entering new markets is developing accurate forecasts. Be careful not to overestimate market opportunities. Just because of the size of the new market, Amazon may be relatively small in that space. The competitive environment varies among markets. Some Amazon marketplaces may have strong local competitors, such as Allegro in Poland, while other countries have fewer local players.
We must, however, fairly warn you. If you’re in a market that already has big brands with big budgets, you won’t be able to compare to them in terms of keyword bidding, for example. Therefore, think carefully about whether Amazon is the right place to sell in these markets.
Watch conflicting targets by Amazon markets
- Perceiving Amazon as a one customer is the best approach because this is how they see themselves. Thanks to this, you will avoid conflicting KPIs on different Amazon markets when creating selling tactics.
- The good news is that Amazon offers the same conditions worldwide. Thus, insist on the same trade agreement in every market, or else you may have conflicts with other countries, as well as the same pricing, where possible.
- Moving from the traditional trading model to Amazon inquiries is challenging, so make sure your entire business is on the same page. It is nice to have a proper foundation built in-house, to which everyone will compete. This is especially relevant as you grow.
Testing, learning, winning
- Grasp the basics, such as product content, in the first place to get the Amazon flywheel working. It takes time, but it works.
- Localized content is critical as Amazon Ads might not be available in some emerging markets. So, make sure your content is retail-ready before adding any other growth levers. If possible, translate your product content into the native language and do keyword research to really understand the nuances of the local market.
- Are you thinking about launching all your products at the same time? If something goes wrong, and it can happen very quickly, it will take huge efforts and resources to get back to the point where you’ve planned to be. We recommend testing and learning some products first to avoid unexpected obstacles. What do you think?
- It may be necessary to invest in Amazon Ads (if any) to increase product relevance in a given territory. We wrote more about Amazon Ads and the benefits of campaigns on Amazon.
Overall, our conclusion is simple. A Pan-European deal with Amazon will give you the best opportunities to develop long-term e-commerce strategies no matter the sales region. Once you reach a certain size and scale with Amazon, you will benefit from connections that you can use in smaller markets. You can also rely heavily on Amazon Flex, a delivery network, if you live in one country and want to reach three or four other markets.
Indeed, you can succeed with the first-party seller model when selling on Amazon. However, it is better to work as a third-party vendor, for instance, when you have a product that you want to manage directly. Or, if you are missing a Buy Box on first-party and there is no item on Amazon, you can quickly complete an order with a third-party approach.
The most important is to test and understand Amazon’s ecosystem and metrics before jumping into the hybrid pattern. Then, fitting best-working practices to your e-commerce will be much easier, more profitable, and more effective. Good luck!