Expanding Your Amazon Brand Into Europe
Kris Gramlich and Dustin Kane are joined by Andy Hooper from Global eCommerce Experts who help Amazon sellers who want to start expanding their Amazon brand into Europe’s Amazon marketplace.
Learn More: https://globale-commerceexperts.com
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Expanding Your Amazon Brand Into Amazon Europe
– Hello everyone. And welcome to episode 69 of “Two Amazon Sellers and a Microphone” brought to you by Sellozo. Today Kris and I are going to be talking about how you can expand your business into Europe with a special guest Andy Hooper from Global E-comm Experts. Andy, thanks for joining us today.
– No problem. Gentlemen thanks very much for having us.
– Yeah. Thanks for joining us so late over there.
– Yeah, that’s fine. That’s why I’ve got this dodgy light you see?
– That’s hard.
– So where, where are you located exactly?
– So I’m based an hour South of London in the UK.
– Okay.
– That’s where I, that’s where I live. That’s where one of our warehouses is. We’ve got an office in London, which I don’t use at all anymore. Pretty much. I’ve got one in New York. I definitely don’t use. So yeah, an hour South of London is where we’re based the majority of the time.
– Yeah. So we got, we got you staying up late tonight. It’s 9:00 over there, but thanks. Thanks for joining with us. This is, this is going to be great. Cause it’s going to be fun to dig in and talk about expanding to Europe. I know this is a topic of conversation with a lot of people that we, a lot of sellers that we deal with on a basis, I mean it’s a great way to to double your business if you’re doing .com.
– Yeah, it might. And so, go ahead.
– Yeah, no, I mean, I think that that whole thing is, you know, the whole expansion to Europe, you know, everyone’s got, you know, as a seller you’ve got all these different ideas and preconceived ideas. Everyone does things for different reasons. Some gear more to expand, to protect their brand. Some want to do it for extra revenue, profit share, you know, everyone’s doing it for different reasons. And I think that, you know, the number one thing is to, you know, if you’re expanding into Europe, it’s a massive opportunity like that that by far is the number one thing. And that’s what people need to think about, ideally.
– Yeah. And, and, and we’ll dig into all of that. Cause we want to hear everything that you have to say. Before we do, if you just want to take a few minutes and just let everyone know just sort of how you got started in this space, how you became the go-to guy for expanding into Europe. Just let us know a little about you.
– Yeah. That’s yeah. I think that the first thing I started doing is I like most people I think I probably started flipping things on eBay. You know, I’d buy stuff, make stuff, you know. I think the majority of people probably started in that way, shape or form. And then that led into, “Well, hold on a second. That and that’s happening and that’s happening. What can I do?” And then that led into some Silicon watches and some Silicon watches led into something else and that led into something else and that led me and that sort of spiraled. And I was more of a, a hobby seller, you know, on Amazon, eBay, you know, just flipping a few bits. I never took it really seriously. It was just a case of just doing some bits, some bread and butter, just getting by, making a few thousand here and there. Not really pushing in any way, shape or form. And I was doing that alongside a job. Like the most of us here we started off as bit of a side hustle. I then started doing wedding photography and a couple of other side hustles and all these sort of side hustles were all sort of taking off. And in the end I decided I better start a business of my own. And, and I didn’t go down the full-time Amazon route as a seller. I actually ended up with hooking up with somebody else where we came up with an idea and it sort of scouting to Global E-commerce Experts. But my sort of journey started in the crash of 2009 where, you know, like a lot of people, I had no money because all the world was closing around us. And at that point I vowed never to be in that situation ever again, that no one else could control my money ever again come the next recession. That was like the ultimate goal. So, you know, whether we’ve hit that or not, I don’t know. It depends on whether you think you’re in a recession or not, but there we go. That we’re not going to discuss that here. Right?
– Different topic.
– Oh, that’s right. So, so when did you start the Global E-commerce Experts?
– So the idea came late 2015, 2016 and we sort of started putting things together and like a lot of businesses, the I mean the official date is like 2017 but like many businesses, we probably put in a fair amount of growth before that, you know, a lot of blood, sweat and tears probably went into that a long time before that and getting things ready, getting things set up you, working out how stuff could work and operate. And then, yeah, things started in sort of 2017 where we really started to gain some traction. Some momentum where we were like, actually we should probably start formalizing some of this. And that sort of happened beginning sort of 2017 and ever since then, touch wood. You know, we’ve been incredibly lucky and fortunate in, you know, making some great partners and, and and seen some great growth over the years.
– Well, it’s, it’s certainly a huge opportunity. I mean, and it’s a growth market right now. Obviously, with everything that’s happened with the pandemic you’ve got people that are, have never been in, they’ve been in a mom and pop stores or a retail. Now they’re expanding into e-commerce. You’ve got people that have started on the.com on the US market and they’re looking to expand because it’s super competitive and they want to expand to different marketplaces. And you have Amazon growing like crazy and opening markets all over the place which opens up this opportunity. So I would, I would love to, I mean I know Kris and I have a ton of questions but I’d love just to sort of walk through what that looks like for someone. Someone like Kris, Kris and I both sell. We both sell basically exclusively in the U S marketplace. There’s been, you know, we, we were, we’d like to expand, we talk with sellers all the time that we’d like to expand and you know, there’s some, you know, there’s a it seems like there’s a lot to jump through but explain what that looks like. Let’s just start from the beginning. Someone who’s looking to expand into, into Europe and then they want to work with you. What are some of the first steps involved?
– Yeah. So I think I’m just going to backtrack slightly from that before I answer that Dustin, that’s right.
– Sure.
– Because when we first started Global E-commerce Experts, the the sort of, we started off with VAT, warehousing and all these sort of things. And being me being me is that, you know, I want to, our goal is to successfully expand every e-commerce seller into Europe because I fundamentally believe that there’s millions of products out there that I would, I just would love. Right. So I spoke to someone two days ago. Who’s got a completely unique product based in Australia as is in, sorry, he’s based in New Zealand, but he’s got, you know, he’s expanding, starting .com, then moved to Australia and he’s now going into Europe, right? This product I’ve never seen. I’m like this would revolutionize my holidays. Like I need this product. Right. For me how many other products out there like that that could just make my life easier, my life better. So I’m like on this mission to basically make that happen. How many, how many of those products can we get into Europe that will help change people’s lives for one way or another? Now I’m talking about a tan on a beach. Like that’s not really going to solve any world problems, is it? But it’s amazing, you know? So, so it all came about, you know, you started working with sellers, you’re wanting to expand sellers from outside Europe in like, so we add 90% of our clients all based in the States, the other 10%, 8% of based Asia, you know, Australia, those sort of areas and 2% are probably in Europe for our warehousing and things like that. And when we work with sellers is you, when you’re moving to a new market the biggest thing that you want is the least amount of friction and least amount of hurdles in your way. And what you then want is, well someone who can guide you through every step of the process to just make that simple and easy because it’s just a pain in the backside. Everyone goes, “Well, I can’t expand to Europe because I need this. I need this. I need that.” This one says, “I need this. This is a pain in the backside. What about this?” It’s just, it just seems too complicated. So if we then look at the maps and go, “Well, look there’s 360 million people probably in North America. There’s 560 million people in Europe.” Well, all of a sudden you start looking at numbers and “Well, hold on a second. That just makes sense.” You know. The markets are quite split though. We’ll come onto the markets in a bit. And I think that what we looked at was how do we support sellers in that? Yes, we’ve got the VAT. Yes, we’ve got the warehouse but what do sellers actually need to make it a success? And we’ve got something, what we call the success pathway. And if you, at the end, we’ll tell you where to go and you can grab a hold of what it looks like, but really they’re six steps. The first thing is the compliance piece. How would you get your product compliant and you as a business compliant to selling to the marketplace? And this framework could be used going into any, any, any sort of different new market. Like, yes, we’ve tailored it for Europe but if he was going to Japan or India or Australia, you could use the same framework. So that’s the first thing. So first thing is compliance. What do you need in UK, Europe, you need VAT, right? So you need to get your businesses, your business VAT registered in the countries you need to fulfill from. You need to make sure that your product is compliant with the regulations and the, and the, all of those things, That’s all working and happening. So let that whole compliance piece is like a whole can of worms shooting up all over the place. You haven’t even launched your seller product, have you? So, so they’re like the first hurdles you need to overcome and then it’s like, “Well, what marketplace do I need to launch shop?” Now, you know, a lot of sellers we work with sell on Amazon. So if you’re used to selling on amazon.com then launching on Amazon in Europe just makes perfect sense. But just because you do a million, a hundred grand, 10 million, whatever in the States on Amazon, doesn’t mean you’re going to do that the same in Europe because the market is much more splinters. One, the marketplaces aren’t nearly as big. And actually some of the marketplaces off Amazon are bigger than Amazon. So, you know, when you start looking at those, that doesn’t mean say that will stay like that but you need to strategically think about which marketplace you’re going to launch on and how, and the resources you’ve got to make that happen. So they’re like the initial steps like how do you overcome those things? You know, you’ve got the shipping, you know where do I make payments? Like, there’s about another million things you could discuss and go through, but I could probably pause there to give you probably some questions to come into that.
– Yeah. Yeah. That’s the problem I had is like when I wanted to expand in Europe there was all this like legality stuff, VAT I had to set up. And then I had to figure out how to get inventory over there. It was very confusing to do on your own but with your service how long does it take for somebody like myself if I want to expand back into Europe, how long has it taken me to get set up with the VAT to start getting inventory in there and get my listings up? How what’s that process look like? And what, how long a timeframe is that?
– So there’s a couple of different points there. So the first thing is we can do in 14 days. We could get you to expand in 14 days and get you selling. Now, there is a slight caveat there VAT and getting VAT registered is a caveat. Now we could probably get you set up like that. Now with the UK, what we can do is you, UK VAT registration takes anywhere between two and four weeks, depending on you as a seller and a whole host of other issues that are going around the government. Right. So, you know, but if we were still the first thing you need to do is that piece, right? So you’ve registered for VAT, but what we can do is we can get you a temporary EORI number. An EORI number is a number to ship into the UK or into Germany or Netherlands or wherever else. So what you could do is you could, you know, we could get you set up, we could get you a temporary EORI number. You could ship your products. We can have all of that done in 14 days. What we might not be able to do is launch you on Amazon if you don’t have the VAT number. So you would need the VAT number in order to input that into Amazon, to launch that product. But really, you know, a lot of products, we a lot of clients we’re working with it’s, we’ll look out and go on Amazon, but I can also, I’m already got a Shopify store or website over here somewhere. Well, I could turn that on and I could be shipping and selling that straight away because if you’ve got a temporary EORI number and you’ve already registered for VAT. That process is starting. So actually with the right partners, you can do that quickly, lightened up. It’s about sewing altogether. Isn’t it?
– Yeah. So when the listings need to be created is that, that’s another service. That’s another issue I had is like getting the translations for the listings and getting those to, to match up. Is that something you guys also offer?
– Yeah. So all of those sort of things we can take care of but actually from a listings point of view from Amazon to start with, Amazon will, you’ll be able to sync your listings. So you go underneath your sell inventory tab and go down to sell globally. I mean the sake of three or four buttons, like your inventory, your, your, your listings are in Europe. Like it’s almost that simple. And, you know, yeah. We could help you with listings and gain key words is a site, separate issue, you know, getting the key words, right? You know, if we look at just the differences between the US language and the UK language whilst we all speak the same and we can all communicate effectively, no problems, there are some differences in those languages. So actually some of the key words might need to differ. And then when you start looking at French, German, Italian, Spanish, Dutch, Swedish, Polish, all of those other marketplaces, you need to translate. So the first thing is just use Google translate. Like it’s free, it’s simple and it’s easy. Yes. We can pay for a native translator. And I’d love to offer the service to you. But actually just to start off with, to get the product out there, Google translate does the job like once you’ve sold two products, get it translated. The money is there to do it that, that map, it’s not much. So, so the translations it comes difficult when you say, “Well, actually, Andy, we want to do 1000 listings in the next week.”
– Yeah.
– That becomes more of a challenge but you’ve got to think more strategically about some of those things about what that launch sequence looks like to make that a success. Because, you know, if you launched 1000 products and you don’t do any of them properly, well, of course you’re not going to sell as much.
– Right.
– Like obvious. So yeah, that, that’s, it’s a key piece, the translations but you don’t have to do it all overnight.
– I actually like that approach. I mean, that’s a similar approach. I mean, that’s how Kris and I think anyway is let’s do it. Let’s get it going and then if, if, if the concept works then start improving on it. Like you said, if you, if you get a sale, “Okay. Now this is a listing that I need to focus on.” Or if I get a couple of sales and like you said, the money’s there.
– It’s the 80/20 rule, Dustin, that, that, you know, what people do is they think, “Oh, well. I’m not going to be able to do to 20%. So I won’t do the 80%.” Like 80% of it is just keying inventory in selling globally and sending some stock like it’s 80% of the work. The 20% is what’s going to make the big difference but you don’t need to do the 20% just to make it happen. It’s that’s the problem. Everyone suffocates themselves in, in, “Oh, well, it’s all too difficult.” When actually it’s relatively straightforward. It’s just another job we got to do down the line.
– I’ve got another question, I guess. Well, I don’t know if this is something you’re going to talk about next, but okay. In the way that it used to be at least from what I learned when I was going through this is you used to be able to ship everything to the UK and have that be fulfilled throughout all of Europe. But now we’ve got Brexit and Brexit has changed that. So now there’s, you’re, you’re going to be shipping into different ones. What, what does that look like? And how do you guys help overcome the challenge of shipping to multiple marketplaces and where to store everything?
– Yeah. So, so Brexit is become a, an interesting topic. It is it’s made it slightly more diverse and it’s like made it slightly more tactical, shall we say? So when you’re launching, the launch strategy exactly that it used to be, get VAT registered in the UK, send everything to UK. And then when you send something, just ship it into the other countries. And you’ve only got to be VAT registered one country. Right. No problem. So that made it simple. Amazon would use the European fulfillment network to send stuff. The other option was you could send everything to the UK, you’d be VAT registered in all the countries and be on the pan-EU program. And Amazon would, you still send it to UK, Amazon would send it to all the other warehouses across Europe. Both programs amazing, great opportunities. Obviously with Brexit, that’s no longer the case. So what has to happen now is when you’re launching, you can’t just be VAT registered in one country. Now we actually recommend three countries and those three countries are the UK, Germany and Netherlands. And I, and I’ll tell you why probably in a moment but what it means is when you’re sending stock is you mean you got to send stock into, to two locations because if you send it all into the UK, you’ve got pay customs VAT, import VAT, import, sorry, import VAT and import duty coming into the UK. Then if you send the stock from the UK to Germany, Netherlands, or wherever, you’ve got to pay that customs charge again. Well, I don’t like paying more money than I need to in those customs charges. So what do you got to do is you got to split those shipments. So the shipments need to go one into the UK and then one into Europe. And I say Europe, because it depends on your strategy on where you’re going to go. Now we recommend three VAT numbers. And the reason for that is this is that on Amazon in Europe, the UK Amazon account for 2/3 of all sales across all the marketplaces. So you definitely want to be registered in UK and Germany. There’s no problem with that. But the problem registering just Germany is that you’d have to send your stuff stock into Germany. Yeah. If anyone who’s listening to this right now who’s ever sent stock into Germany will know it’s the biggest pain in the backside you will ever come across. So what we recommend now is you recommend you do, the UK, Germany and the Netherlands. Now, the reason for the Netherlands is is you can send stock into the UK and the Netherlands both of them have what I call deferment accounts. So what it means is is your input VAT can be deferred to your VAT returns. So you’re not paying the VAT, import VAT upfront. Now from a cashflow point of view, cashflow is King. We all know that. That just makes sense. So you then send it into the UK and the Netherlands and from the Netherlands, you can then ship into Germany. And because it’s already in Europe, it removes 90% of the grief of shipping into Germany. And that’s a typical, what typical launch strategy would look like right now, when you’re launching into Europe. It increased the cost for that without a shadow of doubt but it is more successful.
– That’s, that’s-
– Yeah, it’s a good tip right there.
– That is a good tip. Yeah. I can see. Yeah. This is why I’ve had hangups about entering the market is everything you’re talking about is I have nightmares of a huge fat tax bill. And then I’ve got inventory sitting in the wrong country.
– Yes.
– And it’s, you know, or something like Brexit happens. I’m sure there was a lot of people that got hit by that when their inventory is all in the UK and then.
– I mean, I spoke to a client today. Well, they’re not a client. We’re hoping there’ll be a client. But they were like, “Yeah.We didn’t really do anything with Brexit. And we now have a huge amount of trouble shipping everything from the UK.” So they’re based in the UK. They’re like, “We didn’t do anything. 40% of our businesses in Europe and we can’t ship anything to Europe.” Have you got any of your EORI number in Europe? “No.” Have you got? “Nah,” have you got? “Nah.” No guys, come on. You we’ve been, I mean, I’ve been doing podcasts, webinars, everything for three years on Brexit and we all know, look we’re all guilty of this, aren’t we? Like, we will bury our head in the sand with some of these things until it actually happens. We’re all guilty of it, but yeah hopefully that’ll help us help us out for a while.
– Yeah. It, there is a lot of times that I’ve kicked the can down the road on certain things and it’s you wish. That’s why it’s so important in this community, Kris and I talk about all the time. You’ve got to stay networked with everyone in this, in this community because just like what we’re learning right now by having this conversation could be invaluable. So explain the way that inside Europe now like if you have the inventory in the Netherlands let’s say you ship it there. Are they, they can like the UK did before, can they distribute it amongst the all the different countries in Europe? No problem from one from one country in there.
– So Amazon doesn’t have a warehouse in the Netherlands yet so you’d have to send that to a 3PL.
– Got you.
– 3PL and then the 3PL could then send that to Germany, and then from Germany, Amazon, that can be done the same or you can merge them fulfilled or you can go in the Pan EU program and they’ll ship it everywhere for you. So it’s exactly the same that European Fulfillment Network and the Pan-European Network is exactly the same in Europe, just excludes the UK now.
– And right now there’s no fulfillment centers in the Netherlands, which they’ve got to be building soon.
– There, there, there is rumors that they’re building one about five doors down from where we are. So, so I don’t know how much proof there is in that. I mean, when I say they’re five doors down, what I mean is like five fields down there.
– Yeah.
– They’re taking all five fields.
– Yeah.
– Yeah. That’s exactly what they do. Yeah. We’ve got a fulfillment center not too far from us and they’re just monsters.
– Yeah.
– That’s incredible what they’re doing.
– Yeah.
– That’s amazing. So let’s now take it to the, the next step. Okay. When we’re, when someone’s working with you, we’ve set as we set this up, we’ve got this, you know, the, our, our inventory, hopefully in the UK and in your Netherlands warehouse, are, are you helping us distribute that to FBA? Where what’s the next steps now? What, what are the most critical things from this point forward?
– Yeah. So I think that once you’ve got the compliance piece in the marketplace all sorted. There’s a number of different things that need to happen from there. So you need to ship the product. So we can arrange the shipments for you. Like wherever that be, seeds from China, pallets from the US, whatever that is, we can help you arrange that. We use, we’re essentially a broker, we’re using other people to do that. You know, you might already have shippers that you prefer to use, no problem with that whatsoever, but in order to make that easy for our clients we just say, “Look, we can do the whole end to end for you.” Like, “Let’s keep it simple.” So, you know, we can range the shipments. We can arrange the customs, declarations, get all those pieces done. And then once they get into country, we cannot see you then arrange for the shipments be that direct to consumer or into Amazon for you, you know? And that could be to other marketplaces as well. You know, it’s not just, you know, Amazon. And although Amazon warehouses tends to be the main warehouses, everyone else fulfills the other where the marketplaces themselves, in most cases. So, so you’ve got the marketplace set up, you’ve got the products, you’re getting it out You are fulfilling it from, you know, the warehouses in UK, Netherlands, wherever else they may be. And you’re then getting them those to the to the sellers wherever that is. And it’s relatively straightforward from that piece. You know, we’ve got the carriers, we’ve got the logistics all sown up, you know, we’ve been doing that for quite a while and that’s just straightforward because it’s just fulfillment center, storage facility type stuff. And that’s, it’s straightforward. I think the secret then is is once you’ve started selling, how’d you scale that, like we all know that velocity is the key part of all of this. So when you’re launching into the, into the marketplace you need to go in with a, “I don’t need to make profit for the first three shipments, the first four shipments.” Like, you know, you’ve got to get that velocity going. Otherwise, you know, I’m going to put it on the marketplace. I’m going to see what happens. If you don’t put a promotion on, if you don’t put a voucher on, you don’t do a lightning deal. You don’t do whatever. You know, it’s not going to work unless you are incredibly fortunate, you’ve got an amazing product. There’s no one else in the marketplace and whatever reason, it just flies but this isn’t 2012 anymore, like that doesn’t happen. So yeah, the reality is you got to put some cash behind it. And if you don’t, your stock a likely to come and sit in our warehouse and not move.
– You’re speaking our language now. This is the space we live in on a daily basis helping people with their advertising and launch strategies and all the things that are entailed, entailed in that. And yes, your goal is to get that inventory moving, get you up the rankings organically. And I guess what you’re saying is when you launch onto a new market, it’s, it’s it’s like you’re launching a new product, even though your existing. I think you, you do have an advantage though because your reviews come over, right. Is that true? If I’m using .com does, do your reviews translate?
– So the reviews do translate and do come over but they only come over for the first 10. So what happens is, is the reviews come over, the reviews come over and it shows you, here’s the reviews from .com, these boggy what it says. Now, when you get to 10 European reviews, they’ll go. So basically no chasing review at all until you get to 10 and when you get to 10 start chasing reviews, Now there was-
– That’s frustrating. I didn’t know that
– Yeah. There was talk of them changing it so that you would have a global review system but let’s be honest that a review system comes under attack from so many different parties so often that, I mean, in the papers here, only the weekend was the typical, you know, review scandal you know, and everything else that goes with it. I mean, like, you know, we get it, I don’t know, two or three times a year over here. I suspect you do there too. Like, you know, it’s just one of those things. So obviously they’re combating that, they were looking at just centralizing them all across the world. So you’d have that advantage. I don’t think that’s actually coming yet and someone may know better than I, and if you do please bring a comment somewhere. So we can share that with other people because I hadn’t seen that go live but they are talking about that. So there’s other things like photos. The photos on your listings in the US are synced with the photos in the EU. Although you’ll have a different ASIN, the photos are synced. Again, they’re looking to change those photos because for certain things like supplements you need to see in the languages is in, well you can’t have 10 photos, one in French, one in English, one in Spanish, one in like. There’s a few little things that they’re. I know they’re I know they’re working on, but I don’t know how. Yeah. If that’s, if that’s happened yet. And yeah
– I didn’t know that about the images either I thought could upload. So you can’t upload separate images to a different marketplace?
– You can upload separate images where the problem lies is that you know, when you, when someone hijacks your listing, they since they still use your photos because the photos that Amazon deems to be the most popular or the better pictures or whatever the algorithm is are the ones that stay. So if they think your pictures are better in Europe bare in mind, they’re probably going to be the same pictures-
– Yeah.
– the same camera, or for whatever then. But that’s what they’re trying to separate, separate it to, to account for that.
– So that’s interesting. I did. I did not know that.
– Yeah. There’s all these little nuances that that happened like in anything and this is why you need people in region to make some of these things happen. Like otherwise you just don’t know, you know, how, how how do we do this? How do we do that? You know, if, we do something what we call an account health check. So we offer account health check. People have been selling for a while. They want to get in contact with us. You know, if they listened to a webinar, we do it for free. So there’s a, you know, just say you heard me on the webinar, you get it for free. And we basically looked at your account and sort of look at what you’re doing and say, “Hey, you know this is what you’re doing.” All these little things we’re talking about here but just things we’d pick up on your account health check in order for you to assess the span. We need to do this, this, this, this, this, here’s a report and off you go away and, and go and do it because there’s so many little bits that, you know even if you are a seven or eight figure seller in the States, all of these things you just don’t know like you work out eventually. But when you launch, you just want someone to tell you all this information. You don’t wanna like be finding it out as you go. You just want to go, “Dude, give it to me. Sort this out and make it happen and then tell me what else I need to know. And then we can just crack on the scalp. Done”
– You’re 100% right because trying to bootstrap this or learn this on the way, whatever, whatever it’s going to cost to work with you is going to be significantly less than accidentally sending all of your inventory to the UK the week before Brexit happens and have it stuck there.
– Yeah. Yes.
– So this and this, when we talk about this all the time, it’s so much better just to work with an expert, let them do it, let them help you through it and go. I do want to touch on, on one more nuance because this is another one that really concerned me. And it concerned me more in just the amount of time I think I’d have to focus on it, pricing. Okay. So there’s, there’s so many variables in the pricing. Number one, you got currencies fluctuating all the time. Okay. So you might have been profitable yesterday and now you didn’t do anything wrong but you’re not profitable today. I never used to tell. And then you’ve got the convolutedness of like all the VAT taxes that US sellers don’t understand how to even calculate that into their, into their bottom line per product. What, where do you guys come in on that? And what, what do you, what do you do with pricing?
– I mean, so pricing is a great one. So for example, the exchange rate went up to 1 to 1.4. It was 1.2, the middle of last year pounds to $1.20. Right. Last week he hit 1.4. I think it’s about 1.35 now, yeah, but give or take. So it’s changing all the time. And obviously we have the same problem with this as well from when we’re charging clients, you know, one of the day, our products 1000 bucks and the next day is 1400 bucks. Like by no fault of anyone’s. Yeah.
– Right.
– Yeah. So there’s all of these problems. Now, the best way of doing that in the UK is one you’ve got to price your product as it’s going to sell on the marketplace. So that’s the first thing to say. You can’t have a fluctuating bracket depending on the exchange rate. So where are you got focus on is is how would you sell these products in, in the UK? Now, all right, I, I agree, you might have bought the product in dollars so there’s a fluctuation, everything else but you’ve got to have a standing point. Like, what does that cross, product cost you? And then when you launch you’ve got to include the VAT in the price of the product. And this is where a lot of people go wrong because what they say is, “Okay. Here’s my, here’s my, my, my glass. And I want to sell this for 10 pounds. Yep. And in the US you didn’t have sales tax added onto that. Well, in the UK, EU, the VAT is included in that price. So actually, if you know you need to make 10 pounds on this. Well, actually you need to be selling that for 12 pounds. So you’re including the, you need to include the VAT in that piece. Now that’s that pricing structure. Then let’s talk about how you take the money in and out to make that work for you. Because you know, I’m no currency expert. So here’s my hands up. I’m not advising anyone on currency. There’s no strategies involved is that job yours, Gramlich? I don’t know.
– Yeah.
– Anyway. So now there, there are certain PayPal type accounts. So Payoneer is one that we use and work with very, very closely. There’s RFID. There’s Pingpong, who we’ve also worked with over the past. So where you can basically do is Amazon can pay, instead of taking it straight off Amazon into your bank account, you take it directly from Amazon into a payment gateway. All right. Now what happens is, is because it’s in pounds, it comes into your payment gateway in pounds. Yeah. That means that when you’re paying your VAT you can pay that in pounds, straight to the government. So here’s where people go wrong. Is they go, “Well, I’m going to get all my money from Amazon and take it to my us bank account.” Amazon is going to charge you 6% to do that. You then going to say, “Well, I’ve got pay my VAT.” And then the bank’s going to charge you a currency conversion or wire fee, whatever, to pay that. So all of a sudden you’ve lost a whole wedge of cash. When actually all you need to do is put it into a payment gateway comes in from Amazon in pounds, you pay it in pounds. You haven’t spent a single pence, dime, cents, whatever, in in paying that bill. And then we do, as you can accumulate that in that account. Now, obviously that’s then down to you when you pull that out and make that work for you. You need to think strategically about that. Obviously, if you need the money, you gotta pull it out. If you’re going to leave it in there and look what the rates doing, and the exchange rate, you can do that because you can pay for your services. You know, you could pay our services from that account. There’s no exchange rate. You know, the Euro accounts come into the same account. You’ve got your euros there. You just gotta be clever about how you do these things rather than, you know, “Oh, I’m going to lose loads of money on this.” Well, actually what do I need to do to minimize the risk of doing that? Because whilst you might lose some money some weeks, there’s going to be times where you’re going to be making massive gains as well. And, and in order to do that you’ve done a basically work with that. And, you know, you’ve got to look at what’s going on in the world. So when a new president comes in, for example, the exchange rate always goes up for the first several weeks after, every time. Now I only know that because someone told me that the other day. It’s not like I’m any currency expert for that. Its the exchange rate so you’ve got like I think maybe it was two or three months, whatever it was. There’s, there’s always a positive increase in that period. So you wouldn’t take money out, you know, that don’t take any money out in those seven weeks, done, you know? So there are, there are tools and knowledge out there to support and help you. It’s just understanding where that is and what you need to do to make that happen.
– Yeah. And this is where, this is what I wish I would’ve known that because I did this exact same thing. I pulled the money out and then I got a VAT bill and I had to go pay the VAT. And then I was like, what in the world is going on? I kept getting these random letters from the UK. And I was like, I just gotta, I gotta I gotta get this over with. So, cause I kept getting all these, this mail. So if I had to start over again I would definitely use somebody in my, in my corner to to help me with the service. One thing I want to talk about is Amazon here in the States is big on like brand and brand registry and having a brand around the product. How does that work with the marketplace? If I’m brand registered in the us, is that carry over? Do I need to do it separately?
– So now you have to, you have to do it separately. I mean, you’ve got the brand, which is fine but you’ll need to register for a trademark here now in the UK and in Europe.
– Yeah.
– And obviously until you’ve got that trademark, you can’t register for brand registry. And I think the Amazon’s going down this route more and more and more. I, you know, you can just see it every, every month. There’s a bigger push in that area.
– Every new feature they come out with every advertising feature is all about brand.
– Exactly that. And, and, and that’s, you know, I think that if you haven’t registered your brand yet, then you need to be on that wherever you are in the world. And when you launch into a new marketplace, that’s part of the strategy is you becoming brand registered making sure you’ve got an address in the local, in the local region. Like all of these things are required and there’s so many of them that you just couldn’t know them all. Like it’s just impossible. So that’s where you do need those, those support and help. And, and I think that brand registry is really, really key going forwards. You know, I think that, you know, it adds again, adds cost. It adds, yeah, it just adds cost and impact and complications. But what it does do is it gets rid of all the rubbish because not everyone is going to be doing it. Not everyone’s going to be registering their brand. It’s going to be too much for some people which means if you’ve got to put some cash into it to make it happen, that’s a good thing because the seller over there is not going to do that. The settlers got, let’s say 10,000 products from the same factory as you that you’ve made yours on and they’re just launching it and they’ve all of a sudden got a thousand reviews. They’re not going to be doing brand registry cause they’re not going to get that product registered. You know?
– Right.
– So there, there is a lot of things like that and things like VAT now being taken from the marketplaces rather than from, from the seller. There’s less chance of sellers getting wrap up in VAT and doing a runner because Amazon’s taking the VAT and giving it like it is nexus in the States. They’re giving it to the government. So sellers that were under you 20% under your sales price for example, can’t do that anymore because they got to pay the VAT as well. So actually the, the number of sellers has reduced then the price of stock has gone up. And it means that actually bonafide sellers that have been doing, working hard, doing a great job are actually being rewarded. And that’s what it feels like, whether that’s what actually happens or not, as we go down this, that’s what it feels like. And that’s what we all want, I think.
– I would agree. And when you, when somebody starts out with you, what type of, where are they at in the process? Are they new to the marketplace or are they established enough in the, in the US that they’ve kind of melt that, melt that to what it could be, that they’re looking to expand in the UK and Europe and and they reached out to you, is that, where they at?
– So most of our sellers are doing at least over 100,000 grand in the U S. We would typically recommend they’re probably doing at least half a million. And that point, you know, there’s a conversation of, you know, “Okay, I’m ready to expand to Europe. I need to do this sooner rather than later.” But if you’re doing less than 100,000 grand, the idea isn’t going to work. If you’re doing less than half a million, really how much capital have you gotten in that business and resource to make that happen? You know, we all know that the margins are absolutely huge. So, you know, it’s, you’re even half a million of sales is not a massive profit margin and you’re not sort of rolling in the cash. So there’s an element of, you know, expanding but doing it the right way. And if you do it too soon, you’re just gonna, you’re just gonna crush all your cashflow. And there’s an element of, if you can’t do half a million in the States, the chances are you’re not going to make EU success because you’re not going to have the time. You’re not going to have the resource. You’re not going to have the stock. Like it’s just not going to happen. So, you know, there are exceptions to that. If you’re in a high growth product that no one else has got it, your brand needs to be in those countries is a Kickstarter type campaign product. Then you need to launch, I get that. Right. But if you’re selling them, flipping this, this, this and this, probably not going to work. So typically that’s what you would look at and you need to be doing half a million, roughly, you know, you need the time, you need the resource and then you need to rely on a partner that can basically help you from end to end and answer all those questions. You know, we’ve got so much resource, you know all of our podcasts, all of our webinars, we’ve got an online training program, you know, there’s so much education we’re putting out there to support sellers. It’s out there. You’ve just got to grasp it, take it and make it happen.
– And if I’m interested in doing that so I was interested in doing that. My thought process would be let me test out a few skews first before sending the whole farm over there. Like I would test out a couple of skews, see how those go, scale those up and then add a few more. Is that the right process? Or do you recommend, you know, send the whole catalog over and a couple of each, where are you at there?
– So I think that depends on the level of seller you are and the resource you’ve got available to you because there’s two things to that. One, you know, you want to, you want to start off relatively gradually because you haven’t got, if you haven’t got all the resources to put two people behind it, to just solely work on that, it’s not going to happen. Yeah. If it’s just you or a small resource then you want to launch with a few products and just start with a handful then the next handful then the next handful and so on. Now, the downfall of only started with a handful of products is that, you know, you’ve only got a handful of products to sell. If it doesn’t, if one product doesn’t sell in the UK but it does in Germany, you might not know that, you know, that’s the risk. And, you know, we see that, you’ll see that in, in in the States, you know, there are products that all of a sudden you think are going to fly. They’re just done, like by no re like you just can’t even work it out. So, you know, it’s the same in Europe, you know, you just because you’ve got 10 amazing products, five of them might not sell. Chances are five of them will, but you know 10 of them will, but there’s no guarantee with any of those things. So it’s really about, you know, I would say you do step by step. You do it bit by bit. You know, we work in some of the biggest sellers on .com in senior their categories. And they’re more cautious than anyone, you know, they’re like, “Hey. Look, we’re going to send one container of this one skew. We’re going to send that in and that’s going to be it. And we’re going to try with that. We’re going to test the market.” Now, I wouldn’t send a container of one skew at all. I might send a container, a 20 foot container of 10 skews because Amazon wants to see your boons and volume behind it. If you put in three of this, three of this, three of this, if they go and put some, you put the algorithm behind that, What are they going to sell? Like it’s just no point. They want to see 300 of that. They want to see 500 of that. They want to see that you’ve got stock and you’re taking it seriously, but there’s a risk of team, putting enough behind it and put so much behind it. If it doesn’t sell, you’ve got 10,000 products, you can’t sell. There is a balance. So, you know, I know it doesn’t give you a definitive answer. What we would do is we would work with the client and say, “Well, okay, what are you selling in the States? What does that look like? What are your top selling products? Okay. Let’s look at some of these products first. Let me have a look at those. Which ones are going to sell? Which ones aren’t?” This one, that one, this one, that one, this one, that one moving, like that’s where you want to get to, rather than, yeah, let’s just ship it all in and do it all because then you won’t have any key words. They won’t be translated. You won’t be doing social behind it. If you’re doing any additional advertising, you just so. I always just start with a decent amount of stock per skews, start with 10, then then have a strategy, do 10 the next month, then 10 the next month, then 10 the next month. But don’t just do 10 and leave it at that because I’ll walk, “EU not working for me.” “Well, how many skews did you launch?” “10.” “How many have you got in the States?” “Thousands.”
– Yeah, I’ve been down that road. Yeah
– You know, and then it’s like, “Well, what are the market places you want in the States?” “I’m on Walmart, I’m doing this, I’m doing that.” “How many, how many marketplaces do you want in a, in Europe?” “Amazon.” “Really?” You know, so that, there’s a whole load of things in there.
– That’s a whole nother topic we could be back on for is just the other marketplaces that exist in Europe. I mean, we obviously, as American sellers we have no idea what the what the other different marketplaces are. And there’s also about a thousand other questions that we’d love to have and get you back on for.
– No kidding.
– But you’ve, I mean, this has been so valuable just to, I mean, my, I’ll tell you what, my, the anxiety of going into Europe and all the, I mean there’s, this kind of calmed that a little bit knowing that there’s resources like you out there that can really help everyone through that. So for anybody listening right now, they they’re qualified. They’re, they’re, they’re doing, you know, a million a year in, in US and they want to reach out to you. How do they get in touch with you to start working with it?
– So the best thing to do is just go to our website. I know that scrolling across the bottom. So www.globale-commerceexperts.com, just Google Global e-commerce Experts. I’m pretty sure we’ll come up. We’re on all the usual channels. And if you want to reach out to me direct, feel free, just go to LinkedIn and go, Andy Hooper and then just look for e-commerce. And I’m sure if you’re in e-commerce, there’s probably a very high chance that I’m already connected with someone in your network. I, I would, I would, I would guess so. I, you know, your usual social channels like where you can get us, we’ve got a whole load of resources that can support that as we’ve got the expansion successful expansion pathway that gives you a guide of what you need to do and how to expand. We’ve got an online course, talk to you through it and you can just pick up the phone and speak to our advisors and they’ll just guide you through it. Absolutely fine.
– If you’re thinking about going across the seas here I would definitely get ahold of Andy. He he’s going to be somebody you wanna have a contact or conversation with because I can tell you from experience. I did it on my side, I did it on my own, that’s overwhelming if you do it by yourself. Cause there’s, there’s a lot of things you’ll miss and you don’t know what you don’t know and you could really lose your shirt, your shirt there on some, on some fees.
– Kris maybe that’s what we should do. Why don’t we go for round two and get that settled and get that done. And then we can review it in a few months.
– There we go.
– There we go. Yeah, we can see that goes. I like it. Always be selling. Always be selling.
– Yeah. I love it. That’s perfect.
– Well, I wasn’t going to sell it. I’d say let’s do it. And we’ll, we’ll do it at like practically nothing for you as a thank you for having us on. And then we’ll just do as a demo and you can just show people what it’s like.
– All right.
– Then just go through bought, bought, bought. We’ve gotten you through, job done, you know.
– All right, that’s interesting.
– We’ll send an offer.
– I like it. I like it.
– That is awesome. Well, we’ll be in touch about that, Andy, for sure. Again, I know it’s almost 10:00 in the evening there. Thank you so much for your time, for doing this with us. I mean this has gotta be so much value-
– Yes
– for our listeners. We have a, I mean, we, there’s lots of US sellers listening to us right now and and hopefully they’ll be getting in contact with you. So again, thanks for everything. We’ll have you back on. Again for everyone that’s listening, if you liked this content, if you want to hear amazing people like Andy give you insights into what’s going on in the Amazon space and how you can grow your business. Make sure you follow us everywhere that we’re live streaming this. So we’re live streaming this on our Sellozo YouTube channel, Sellozo’s LinkedIn channel, Sellozo’s Facebook page. Like it, turn on notifications so you’re notified when we go live. If you’re listening on the podcast, subscribe to it to get notifications of when it’s going, we have new episodes come out and make sure you leave us a review as well. So that way we can keep bringing on great people like Andy Andy, thanks again. We’ll have you back on and everyone listening. We’ll be back at this again tomorrow.
– Thank you very much, gentlemen. Absolutely amazing. Have a great evening. We’ll do.