The Amazon phenomenon serves as a trendsetter in the e-commerce industry. The most significant player in this market is Amazon.com, which garners 45% of all visits across all Amazon marketplaces. However, addressing challenges like transportation from the EU to the USA, customs and logistics operations (CLO), consumption tax, and other related requirements remains a pivotal consideration.
Amazon is the most renowned marketplace and an unrivaled leader in the world of e-commerce. Its catalog encompasses nearly all categories, ranging from electronics, clothing, cosmetics, to groceries, furniture, and household essentials. Additionally, Amazon offers a wide range of services, including unlimited access to streaming content.
Did you know that Amazon USA was established in 1994 as an online bookstore? Since then, it has gradually expanded to other markets and has become a trendsetter in the e-commerce industry.
Amazon currently operates in 22 markets, with its most significant presence being felt primarily in the four largest markets: the USA, Germany, the United Kingdom, and Japan. In these markets, Amazon stands as the undisputed leader, accounting for 70-80 % of its sales.
Amazon's level of success remains unparalleled, and this trend is unlikely to change in the foreseeable future. While local champions might emerge and flourish in specific regions, none have managed to replicate Amazon's widespread success across multiple markets.
Notable contenders to Amazon in the USA include eBay and Walmart. On a global scale, other players like AliExpress, Cdiscount, Argos, Facebook Marketplace, among others, also pose potential challenges to Amazon. These platforms offer alternative online shopping options and have established themselves as significant participants in the e-commerce landscape. Although Amazon maintains its dominance, competition from these platforms contributes to a dynamic and fiercely competitive marketplace.
When considering consumer awareness in the United States, expressed as percentages, it was revealed that 92 % of consumers are familiar with Amazon, followed by 72 % with Walmart, and 69 % with eBay.
The most prominent market remains Amazon.com in the USA, constituting 45 % of total visits across all its marketplaces. Following closely, the next three markets — Japan, Germany, and the United Kingdom — each account for approximately 10 %. When combined, the top five markets (USA, Japan, Germany, the United Kingdom, and India) collectively contribute to nearly 77 % of total visits.
Adding to this, it's intriguing to note that approximately 25 % of all sales facilitated through Amazon.com are shipped outside the USA. This underscores the global utilization of the .com domain as a platform, extending beyond national borders.
Amazon Prime reigns supreme over the American e-commerce landscape, offering a comprehensive paid service with a multitude of benefits for customers in the USA. With around 157 million subscribers, predominantly based in America, Prime has firmly established itself.
For Amazon sellers, becoming part of the Prime program holds paramount importance. This is attributed to its role in facilitating swift order delivery to end customers and affixing the coveted "Prime" label during platform searches, thereby bolstering visibility and credibility.
💡 Displaying the Prime badge significantly heightens the potential for sales. This program not only enhances product visibility but also nurtures customer loyalty, fostering lasting relationships.
💡 The saying goes that Amazon holds the key to countless doors. Their capability to deliver orders extends to 4 out of 5 households in the USA and reaches every second household in Germany or Austria.
Amazon has a wide customer base, consisting of over 400 million customers worldwide. Currently, an average of over 66 % of consumers begin their online shopping on Amazon. Consumer purchase data confirms the popularity of the mentioned marketplace, with an average of up to 89% of participants having previously made purchases on Amazon.
"The most important thing is that you reach customers who would otherwise be difficult to access, and you benefit from the advantages of a large brand on the marketplace. The difference is similar to casting a fishing line into a pond in a village square or fishing from the deck of a luxury yacht. There are many more fish, and what's also important is that there are more species! In our case, there are noticeable differences not only in what we sell locally and on different marketplaces but also significant differences between individual marketplaces. It often happens that we successfully sell something abroad that doesn't perform well locally, and vice versa," says Mirek Severa from A Spirit, an EXPANDO client, about selling on Amazon.
On average, 52 % of all shoppers on Amazon spend 100+ EUR per week, and 23 % spend 200+ EUR. In comparison, in a monthly average, 18 % of shoppers spend 100+ EUR and 4 % spend 200+ EUR.
American customers are the ones who spend the most money on the platform: 18% of them spend $200 monthly on Amazon (only 4% of Italian and 5% of Spanish shoppers on Amazon spend that much).
When it comes to shipping orders from the EU to the USA, there are several factors that will affect the price and delivery time. Whether you are dealing with:
EXPANDO, in collaboration with the international logistics company DHL (Dalsey, Hillblom, and Lynn), can significantly simplify the entire shipping process. DHL offers international goods transportation, including delivery from Europe to the USA. If you order goods from Europe and want them delivered to the USA using DHL, you can take advantage of various services, such as:
FBM stands for "Fulfillment by Merchant," which means the seller (merchant) on platforms such as Amazon fulfills orders and ships goods directly from their own warehouse or other storage spaces. This selling model is an alternative to "Fulfillment by Amazon" (FBA), where Amazon stores and fulfills orders on behalf of sellers.
In the FBM model, the seller manages their own inventory, packs and ships orders, and handles customer support. Sellers can utilize FBM as a way to offer their products on the Amazon platform without relying on Amazon's warehousing and order fulfillment services and associated fees.
Currently, when importing from the EU to the USA, duties are applicable to certain goods. Different types of goods have different duty rates, which are determined based on the Harmonized System (HS) code and other factors such as country of origin and destination.
To import goods from the EU to the USA, specific documents are required, including an invoice, a letter of transmittal, and a Certificate of Origin, which verifies that the goods originate from the EU. The commercial invoice must have a complete and accurate description of the shipped goods, including detailed item descriptions, item names, package markings, quantities, weights, prices, shipment costs (packaging, discounts, rebates), destination, delivery terms, names of buyers, sellers, and carriers, etc.
💡If we sell and ship individual packages from the EU to customers in the USA, duties are typically not applicable if the shipment's value does not exceed $800. This implies that when our shipments to the USA are valued below $800, customers are not required to pay duties upon delivery.
When selling and shipping goods from the EU to customers in the USA, it's crucial to understand the concept of sales tax. Sales tax is a levy on the sale of goods or services that customers pay in certain countries. Typically, this tax is included in the price of the goods or services and then submitted to the state authority. Its rate can differ depending on specific jurisdictions, and it may be imposed at various levels (such as state and local levels). In some US states, sales tax is not applicable, while in others, it can reach as high as 10%. Importantly, the responsibility of paying the sales tax lies with the seller, not the customer.
Amazon automatically collects sales tax from customers on behalf of the sellers. The tax is paid by the customer. When conducting sales on this platform, managing a Tax ID is unnecessary.
💡 Amazon automatically adjusts the order value to include the sales tax, without affecting the seller's pricing. Unlike the VAT system, the USA doesn't have a value-added tax, enabling sellers to offer goods at lower prices while maintaining the same margin.
EXPANDO facilitates the global expansion of e-commerce businesses. Through our proprietary software, EXPANDO APP, and specialized e-commerce services, we offer complete automation and streamlined processes for both expansion and subsequent sales.
"At EXPANDO, we excel in integrating marketplaces, e-shops, and accounting systems. Moreover, our team comprises seasoned experts who have achieved the highest turnovers for new Amazon sellers across Europe. In essence, EXPANDO ensures new sellers experience accelerated growth on Amazon," highlighted David Cikánek, Head of Sales in collaboration with Amazon.
The Amazon catalog boasts an impressive selection of over 1 billion listed products, all efficiently matched using the EXPANDO APP. In comparison to the expenses associated with expanding through a foreign e-shop, the costs of selling are minimal. Additionally, launching sales is a swift process, and you can manage all aspects conveniently from the Czech Republic.
Collectively, we delivered exceptional results to our clients in 2022, contributing to a Gross Merchandise Value (GMV) exceeding 48,000 EUR and facilitating over 820,000 orders.
AUTOPRICER, the tool that dynamically adjusts product prices based on competitive behavior, yielded an additional turnover of 10.3 million EUR for our 155 clients.
"As the global market continues to open up, even smaller EU retailers have the opportunity to thrive on the largest marketplace. Thanks to express delivery via DHL and favorable tax conditions, our retailers have consistently excelled in this market year after year," states Jakub Petřek, Account Manager at EXPANDO.
Operating on the Amazon.com platform empowers EU retailers to tap into a vast customer base and potentially boost their e-shop sales. While the platform offers numerous advantages, it's essential to consider both the benefits and potential costs. Thus, meticulously evaluating all factors and identifying the optimal solution for your e-shop is pivotal.
Contact us for a personal consultation, and we will help you maximize sales on the American Amazon! 📨 david@expan.do
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