The effect of international sellers on the Amazon marketplace
While many FBA sellers have built strong businesses by sourcing products from China, Chinese sellers are increasingly presenting serious challenges for the U.S.-based FBA community.
These challenges range from counterfeiting to selling legitimate products at a far lower cost and can impact anyone with an FBA business. And with new Chinese sellers flooding Amazon (250,000 joined in 2017 alone), things aren’t going to get any easier.
Even if you’re a small seller, you aren’t immune: As a Forbes story noted last year, counterfeiters target not only well-known companies, but mom-and-pop brands that have created their own unique products, too.
So how do you compete? How can you protect your business, and even grow it, in the face of this wave of competition? Experts will tell you it means rethinking your approach to selling, sourcing, even customer relationships (all of which, to be honest, you should be doing to compete with all sellers). Here are three of their top tips:
Sell products that are easier to “defend.” That can mean a highly specialized and/or patented product (which still likely won’t be counterfeit-proof, but you’ll make it more difficult for anyone who tries), something made under an exclusive deal with a manufacturer, a product that has your own brand, or all of the above. Selling your own branded items doesn’t mean they have to be created by you: Many manufacturers offer private labeling, or putting your brand on existing products. That can give you an edge with customers — and if you’ve done a good job at building relationships with them (see the next tip), your advantage can grow stronger over time.
Connect with customers. Business owner Steve Chou (of MyWifeQuitHerJob.com fame) notes that while 12 percent of their customers are repeat, that small segment is responsible for more than 36 percent of sales. Obviously, the products you sell and your listings impact the customer experience — and so do things such as making the checkout process smooth with tools like Avalara for sales tax calculation. But it’s every bit as important to create and maintain customer relationships. For example, Chou utilizes his customer list to send regular messages to targeted recipients; you can do the same thing to drive traffic to your website and listings.
Diversify. And not just from a product standpoint, although it’s best if your revenue isn’t completely dependent on just one or two items. Explore other platforms to determine if they make sense for your business, and don’t neglect your own website. Other sellers might be able to undercut your prices or even duplicate your products, but they can’t list them alongside your items if you control the platform. Be sure to drive traffic to all of the places you sell — when you have a compelling product, and you give people several different ways to find it, more of them will become customers.
What are you doing to better compete? What has worked for you, and what hasn’t? We’d love to hear from you. Email us at firstname.lastname@example.org with your story.
The 2021 sales tax changes report: midyear update
Your guide to navigating the complicated world of tax compliance and preparing for the future
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