How to do business on Amazon is a headache for many sellers on other platforms. In fact, if you have experience in cross-border e-commerce, doing business on Amazon will feel like adding wings to a tiger. Amazon is a very simple and easy to use platform. Of course, the key is that it is easy to place orders, so whether you are just starting out or are an experienced person, Amazon is the first choice for starting a business.
1. Amazon’s model
1. Self-delivery operation mode
The store has its own supply channels and also prepares a small amount of goods. When a customer places an order, the store asks the warehouse manager to pack and ship the goods, and then delivers them to foreign customers via international express parcels. This is called the self-delivery model. However, the response time is slow and it usually takes 10-20 days for customers to receive the goods.
2. Amazon FBA (Fulfillment by Amazon) model
You choose the products yourself, have them shipped to Amazon warehouses through logistics, and then enter Amazon's overseas warehouses. After the store places the order, Amazon's warehouse will ship the products directly to the customers. The operation mode of warehousing is basically the same as that of JD.com. With this mode, the time it takes for customers to receive the goods is greatly shortened.
2. Dimensions to consider for Amazon’s refined operations
Several dimensions: site, language, funding, product, operation, promotion, Amazon A9 algorithm
1. Amazon’s site
Amazon currently has sites in North America, Europe, Asia, Australia, and India, and will have other sites in the Middle East in the future.
North American sites: The United States, Canada, and Mexico. The United States has the greatest energy and the most intense competition, and is Amazon's main battlefield. Registration requires a company business license, bills, dual-currency credit cards, etc. The threshold is not high. Monthly rent is US$39.99/month.
European sites: Britain, France, Germany, Italy and Spain. They are second in power and have slightly better competition because the threshold is higher. Registration requires a business license, bills, dual-currency credit cards, and VAT tax numbers (the key point is also the threshold). Monthly rent: £25/month.
Asian sites: Japan...same
No matter which Amazon site you register on, you basically need a company business license + bill (for company or legal person) + dual-currency credit card. Therefore, for individuals, by registering a company, they can basically start their journey on Amazon and make money from foreigners.
2. Language requirements
Amazon backend pages can be in Chinese, English or other languages, so there is no big problem here. However, Amazon’s front-end product pages (collectively referred to as listings) are all in the native language. For example, the United States is English, France is French, the United Kingdom is English, and so on... So when you write a listing, there are thresholds. The product page is the stepping stone for your store to have sales. The first thing customers see is what you write. Whether your writing is good or bad will directly affect the customer's purchase result. Many companies directly recruit talents who speak the corresponding languages, and they can recruit directly from schools. For individuals, there is only Google Translate. The difference between translating sentence by sentence is not big, and basically you can pass it.
3. Funding issues
Amazon currently returns funds every 14 days, which means that the money in your account is transferred to your third-party payment account (there are many payment companies in China, all of which are safe), and then the money is transferred back to your domestic bank card through the third-party payment account. Since it is an FBA boutique operation, it is necessary to send inventory to overseas Amazon warehouses, so when your product is selling well, you need to prepare more inventory, so you need to continuously inject funds, and in the end you will find that all the money you earn has been earned into the inventory. Finally, when the inventory is cleared, you will find out whether you have made money. If there is any problem in the middle, such as not being able to sell, or being maliciously attacked, etc., your overseas inventory will be unsalable, which is a human tragedy. This is the biggest risk of doing business on Amazon. You need an operations professional to do the data or control the inventory, and you also need to carry out refined operations in product selection. At the same time, you must make a large amount of financial reserves.
4. Product selection
Amazon is a platform that focuses on products rather than stores. The weight and support given to new products are also very high, but the products you choose must also be good, so you need to have unique product selection skills and methods. At the same time, you must first conduct market analysis and choose suitable products. In particular, you need to be reminded of a special mechanism of Amazon: follow-selling. For example, you have a good product A, which you put on Amazon. After your operation, this product sells well, with dozens of orders a day. Then I see your listing on Amazon, and then I go to the factory or 1688 to find the same product as yours, and then follow you to sell it. There are two sellers, you and me, on the same product page, and customers will choose to buy from you or from me. This is called follow selling. If you start a price war again, your profits will be gone. Therefore, a good product is not only easy to sell, but also requires that only you can sell it.
5. Requirements for store operation
The operational requirements here are mainly to operate the overall store like a store manager. Including store management: maintain excellent store performance, understand Amazon rules and be proficient in backend operations. If problems arise, know how to file a complaint. Product operations: data analysis, product selection, listing writing, listing up, shipping, improving product rankings, and increasing store sales. Inventory management: if sales are good, keep the goods in stock; if sales are not good, do not accumulate goods. Analyze the inventory and the market. Promotion operations: spending the least money, selling the most things, and so on all aspects need to be operated. For individual sellers, these can be learned through various channels.
6. Demand investment for promotion
Promotion mainly involves advertising, that is, spending money to buy traffic, buying effective traffic. Currently, buying traffic on Amazon is not cheap, basically it costs about 0.5-1 US dollars per traffic, so in fact a large part of the profit will be spent on advertising, and at the same time, product evaluation operations must be carried out. Amazon has also introduced some policies, such as the Early Reviewer Program: products with less than 5 reviews on new products can participate in this program. When customers buy your products, Amazon will send them an invitation to leave a review. If customers leave a review, Amazon will give them a 5 US dollar reward. A product can have a maximum of 5 reviews, and the fee for each product is 60 US dollars. This plan does not ensure that all reviews left by customers are positive, they may also be negative, so the product quality must be reliable. This also requires some promotion techniques and overall layout analysis. Try to use less investment in exchange for greater profits. First choose reliable products. After the products have some basic reviews, start advertising and buy traffic. This way, the conversion rate will get better and better.
7. Amazon A9 algorithm technology
The A9 algorithm is a mysterious existence in the industry and Amazon’s most important magic weapon. His core is: the good ones get better and the bad ones get worse. Therefore, running Amazon requires consistency. It requires steady, step-by-step growth. It must not be like a roller coaster, going up and down. One day, you will go down and cannot get up again.
Therefore, I personally think that there is still a certain future for doing business on Amazon, because cross-border e-commerce is very unfamiliar to many Chinese sellers. The threshold seems to be relatively high, and there are many requirements, including the language barrier which restricts a large number of people in the early stages. However, before doing this business, you must first understand the situation and basic knowledge of the industry. Cross-border e-commerce now has great support. The market is still considerable, and compared with domestic e-commerce, the competitiveness is not that great. New sellers must have a clear understanding and make long-term plans about how much money they have, whether they have good products (there is a saying in the industry, "Amazon relies on products for 70% and operations for 30%), how to operate, how to promote, and how to fight against malicious competitors.
