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Why Selling on Smaller Amazon Markets Can Be More Profitable

by Lewis Civin, CEO

“BIGGER IS BETTER”.

Growing up, we’ve always been made to believe this old adage.

So it has become second nature to us to have this desire for bigger things…

Bigger TV sets.

Bigger car.

Bigger house.

While this might be true in some cases, it certainly doesn’t apply to everything.

Take the sneakers business as an example.

It’s a pretty big market cause practically everyone needs a pair, right?

And to fill in this huge demand, it’s quite tempting to sell to everyone that comes in the pipeline.

Sure, you can do exactly that…

But the most successful sneaker companies knew how to choose which prospects to sell to.

They didn’t try to cater to everybody who needs shoes!

Instead, they focused on very SPECIFIC targets and became the BIG fish in those small ponds.

Nike is into fitness, sports, and winning.

It targets “all athletes” and with its iconic “Just Do It” slogan, customers associate wearing Nike sneakers as a first step to achieving greatness.

Converse, on the other hand, has positioned itself as the “shoe of self-expression”.

Its Chuck Taylor All Stars with a studded collar is no longer just a style but has turned into an icon…

This strong brand personality now made Converse a symbol of trendy yet simple kicks.

Lastly, Puma caters to those people who are interested in style, fashion and awakening inner motivations.

It has a deeper understanding of the modern female athletic consumers and has positioned itself as the haven for women “where the gym meets the runway”.

You see…

All these successful brands have helped us know exactly which sneaker fits our personal needs, whether we are super competitive or ultra fashionable…

Which in return has made them stand out and became the go-to store for sneakers we need.

So what I’m trying to say is…

Going for small ponds like what these big brands did can be applied to your Amazon store too!

And what does this mean?

READ ON…

Selling Outside Amazon US

As a new Amazon seller, you might be tempted to launch your store in the biggest marketplace (Amazon US).

True, Amazon US is the biggest among all marketplaces with over 300 million active users making it the go-to pond for new sellers.

But guess what?

It is by far the MOST competitive marketplace too. 

In fact, active sellers in Amazon US alone are about 1.1 million (Statista 2019 data) while the UK only had 281,257 sellers and Canada with 163,595.

Here you can clearly see that in small markets like Canada, everything is shifted to a smaller scale having only about a tenth of sellers compared to the US.

With that being said, why not consider selling in smaller ponds like Canada and the UK and be the big fish there, especially if these are your home countries?

Okay you might think that, 

“Hey, those are small markets. Why bother?”

And while that is true, opening your store to Brits and Canadians can actually work quite well in your favour.

Why?

Well itt has something to do with lower competition, higher profits, and same buyer-seller ratio.

Let’s discuss them one by one!

Small Ponds Have Less Competition

The 2019 e-commerce trade sales in Canada amounted to almost 1.85 billion Canadian dollars, with approximately 28.1 million Canadians having made purchases online. 

Not bad at all!

And since Canada has fewer Amazon sellers (about 10% of the US headcount)…

Imagine how much sales you can potentially make should you decide to operate your Amazon store there?

The thing is…

The Canadian market is less saturated and competition is less intense, so PPC ads are more effective and less costly for Amazon Canada sellers.

And the fact that there are fewer users on Amazon.ca means that search volume is also lower, and so bids tend to be lower for most keywords too! 

Giving you more bang for your buck!

Small Ponds Offer Potentially Higher Profit Margins

Greater competition among sellers often results in a lower product market price.

Come to think of it…

If a popular item is sold by many sellers, the prevailing market price would be lower because sellers know that customers can easily buy it somewhere else.

But outside Amazon US, this narrative changes.

Since there are fewer sellers in Amazon UK and Canada, the power now rests with the sellers instead of the buyers.

Amazon sellers now have more wiggle room in setting prices a bit higher and not always depend on the competition.

Smaller Amazon Markets Share the Same Buyer-Seller Ratio as Amazon US

Canada has a population of roughly 35.6 million while the US has 328.2 million. So basically, your market is reduced to a tenth if you’ll be selling in Canada.

Yes, that would mean lesser customers, but remember…

Canada only has 163,595 active Amazon sellers compared to the 1.1 million sellers the US has.

This makes the seller headcount reduced to a tenth too!

Skeptic? Ok let’s do some Math!

US: 328.2 M /1.1 M = 298 potential buyers per seller

Canada: 35.6 M / 0.163 M = 218 potential buyers per seller

So you see, smaller markets like Canada share the same buyer-seller ratio as the big ones like US…

Which means you can potentially earn as much or even more if you choose to explore these underrated marketplaces.

Wondering how you can start?

We’ll tackle that next!

How to Sell on Amazon Canada

So once you decide to go for smaller ponds like Amazon Canada, here are some points you must know before you start selling:

  • Canada has higher duty rates than the USA.
  • The exchange rate is not stable.
  • A Business Number is a requisite in importing products to Canada.
  • For shipments to be delivered by FedEx or UPS, make sure to send them Delivered Duty Paid (DDP) to prevent getting rejected by Amazon.
  • Canada implements Federal Sales Tax.

Once you’re all set with the pointers above (which warrants a whole new discussion), you can now begin selling on Amazon.ca by following these steps.

  1. Get registered.

If you already have an Amazon Seller Central Account, there’s no need to register for a new one. Otherwise, secure a new account and register your business.

  • Choose the product category in which you want to sell.
  • Select your selling plan: Individual or Professional Plan
  1. Create your Product Listings.

After registering your business, the next step is to upload your products on Amazon.ca. 

If you’ve decided to fully switch from Amazon.com to Amazon.ca, you cannot transfer your inventory directly.

Instead, you have to create new listings and set up other things like shipping on Amazon.ca.

  1. Fire up your Sponsored Ads for Canada.

Once your inventory is available in the Amazon warehouse, you can now start launching your sponsored Ads.

  1. Monitor the exchange rate monthly.

Exchange rate changes regularly so you must track this to adjust your prices accordingly.

  1. Sell your products on Amazon Canada.

Once your product listings and Ads are running, get ready for some sales!. When a client places his/her orders, Amazon will notify you and if you’re signed in FBA (Fulfilment By Amazon), Amazon will do the shipping and handle client services on your behalf.

Watch the YouTube Video – https://www.youtube.com/watch?v=LCm3YAtyfH0

Final Thoughts

Listen…

You can easily start selling on Amazon Canada and UK and begin making good money out of it.

And the good news is…

Aside from Amazon US, ZonBase’s powerful tools and services now extend to these 2 countries too!

ZonBase now has access to both UK and Canada’s databases to help you navigate these marketplaces and be the big fish there!

Lower competition.

Same seller-buyer ratio.

Higher profit margins.

The possibilities are endless really!

And as long as you’re willing to take your Amazon business to the next level…

ZonBase has all the tools and services to help you make it happen.

Get in touch with the experts NOW!

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