Newegg.com
has come a long way since the days when it was the destination of
choice for gamers. Today, it is a thriving third party marketplace with
18 million shoppers--most of whom are young, tech-savvy males. Now
retailers have a greater opportunity to reach these shoppers.
Recently,
Newegg.com lifted the restrictions on its most popular categories for
marketplace sellers. As a result, retailers specializing in Consumer
Electronics can now list products on Newegg.com. In addition, the
previously restricted IT category has been opened for sellers with
refurbished products only.
If
you are a retailer with products appealing to those who have a penchant
for technology, Newegg should be high on your growth plan. The
technology savvy-- whether they be guys or gals—frequently start their
searches on Newegg.com. What’s more, these shoppers tend to be
incredibly loyal.
There
are plenty of other successful categories on Newegg outside of Consumer
Electronics and IT. At ChannelAdvisor, we’ve seen sellers with
products in Sporting Goods, Home/Car Audio and Office supplies do
incredibly well on this thriving marketplace. In addition, Newegg
offers a wide variety of promotional opportunities for retailers.
In
short, if you have products for techies whether they be girl geeks or
gadget heads, you don’t want to miss this opportunity to reach them.
If you're interested in finding out more about selling Consumer Electronics on Newegg, you can sign up for more information.
Blog post by Sheridan Orr, ChannelAdvisor Director of Product Marketing
This is Part III of our three part series digging into Amazon's Q4 results. A summary and guide to the series is here:
Part I: High level overview of Amazon's Q4 (Available here)
Part II: Deep dive into Amazon's Q4 3P performance (Available here)
Part III: Under the hood of Amazon's FC network (FC = Fulfillment Center) (You are here)
Important Note on this blog post before we get started:
All of the information in this article is from publicly available sources including, Amazon public reports, CBS, NBC, Fox news, Foursquare, google maps, The MWVPL International Supply Chain Experience, Amazon FBA documentation, wikipedia, Amazon's job listings and Amazon's fulfillment recruitment site.
Amazon's FC network is a living breathing 'entity' with new facilities opening and closing all the time. We will work to keep the data up to date on a quarterly basis. Please let us know in comments if you find an omission or have any FC news we should add to our db.
Backgrounder on Amazon+Fulfillment
If you look at the growth of Amazon compared to e-commerce (as measured by ComScore), you noticed that before 2006, Amazon grew in-line with e-commerce and then after that time, Amazon grew significantly faster. I attribute boost in growth rate to two things:
3P - Amazon's Third party marketplace is a huge win - it stocks the shelves (selection), creates price competition (value) and frees amazon's cash to be invested elsewhere
Free shipping programs - Industry lore goes that Amazon did research and decided that instead of marketing, if they put every dime into lowering shipping costs to consumers it would drive more sales. They started with super saver and then introduced Prime (free all-you-can-eat 2 day shipping for ~$80)
Most readers know this, but just in case: these two programs 'intersect' with a program that Amazon calls FBA - Fulfillment By Amazon. In this program, Amazon allows 3P sellers to use their FCs for a fee. The beauty of this program is that it allows 3P sellers access to the Amazon Prime program which we estimate is 10% of Amazon's customer base (approx 20m), but they spend 4X the average - so Prime represents about 40% of the Amazon wallet.
In the past two posts, we covered the important 3P results from Q4, and in this post we want to dig deeper into fulfillment because it is the heart of the Prime experience and strategically very important to Amazon's success.
Why does fulfillment matter?
Amazon has been building fulfillment centers (FCs from here out) at a rapid pace and following a pattern where they enter a state/country/region and build out 2-5 FCs around population centers. During the Q4 conference call there was an interesting Q+A exchange between Morgan Stanley's internet analysts, Scott Devitt and Amazon's CFO, Tom Szkutak that I have snippet-ed from the transcript (here if you want to read the whole thing):
"Devitt: ...it looks to us that you have successfully begun to transition your logistics cost in the direction of being more of a fixed fulfillment cost, with lower unit based shipping costs...."
Szkutak: "In terms of fulfillment, you're right. Over the past few years, we have expanded our FCs pretty extensively to the point where we are closer to customers; and you are seeing that reflected in our transportation costs...."
This makes logical sense. Let's say that before it built a FC near SFO, the closest FC was Las Vegas which is 550 miles away. That's a lot of ground for packages to cross and thus high transportation cost. Now let's say that the product moves to within 10 miles. You have taken essentially 550 miles out of the trip that package travels (assuming you can be smart about getting the right products and limiting the movement intra-FC, etc.)
In this post, we'll look under the hood of Amazon's FC network and get a good feel for:
How large is Amazon's FC footprint both domestically and abroad?
How many of the top US cities does Amazon cover with their FC network?
How many FCs has Amazon already announced for 2013?
What is it like inside Amazon's FCs?
Finally if you stick around and you are an FC geek like me, I have a collection of interesting videos and pictures of Amazon's FC network that I've found over the years.
This is very timely because as more and more retailers, manufacturers and sellers are leveraging FBA and programs like FBA export, we are getting a lot of questions about Amazon's fulfillment network. The top question is....
Two relatively quick, but interesting pieces of news out this week we thought were of interest to Amazon sellers.
Amazon settles with Connecticut
First, if you read the part III of our Q4 report, we did a deep dive into Amazon's fulfillment network. Just when we finished it, Amazon announced a deal with CT:
In November, Amazon will collect sales taxes in CT
Affiliates can fire back up (Amazon nuked them in June last year when CT claimed they created nexus)
Amazon is going to invest $50m in the state over the next 2yrs in the form of a FC
FC location was not announced.
That brings our 2013/2014 FC build out to 14 (bringing the total to a whopping 103 FCs)
Amazon's annual report (10k) reveals new international details for first time
Amazon filed their annual report with the SEC (called a 10K) and for the first time they have included some details around the breakout of their non-domestic businesses. Specifically they included detailed (2010-2012) sales break-out for the UK, Germany and Japan.
Here is the new data with y/y growth rates also calculated:
I think many Amazon watchers will be surprised at how large both Germany and Japan have become and how fast they are growing. I've read reports that Germany is growing 10% and that's clearly not the case. It's also interesting to see how rapidly the 'other' regions are growing - 47%.
Here's another view of the data. In this table we look at the 2012 share of international revenue per region:
Or if you prefer to look at it graphically, this pie chart shows Amazon's global revenue per country for 2012:
As is usually the case, Amazon leaves us wanting more data. While it is great to finally know that Germany, Japan and the UK are the three top non-US markets, but what about 'other'? While it's only 5% of sales, it is growing 47% and is 12% of the non-US revenue. One way to get a view into that is look at the FC footprint:
What this (directionally) tells us is that China and some of the other EU countries (France/Spain/Italy) are probably the lion's share of that Other slice of the pie.
If you are interested in selling into new markets leveraging Amazon, we have two posts out recently in an excellent series on this very topic:
Yesterday, Google acquired Channel Intelligence. There's been a lot of coverage in the press about Google's growing concerns over Amazon's dominance in e-commerce. Over in sister blog, CSEStrategies, we have a post that we thought would be interesting to Amazon-watchers as well.
Last week we put out the first part of our Expanding
Internationally with Amazon series that targeted US retailers; this week
we’ve got the EMEA edition. To touch on
a few of the highlights, here are a few reasons why you should consider
expanding with Amazon.
First of all, Amazon has third-party
marketplaces in the US, Canada, UK, France, Germany, Italy, Spain, China &
Japan*, and is trying to help retailers with programs and tools to ease the
transition into these new selling channels.
Some stats from
Amazon:
Amazon’s European marketplaces
had over 164 million active customers last year.
30% of total Amazon units were
sold by 3rd party sellers.
Amazon.co.uk receives about 20M
unique visitors monthly. Amazon.de has 24M and Amazon.fr has 13M.
Source:
Amazon Webinar that sources Amazon Investor Relations
We recommend a phased approach to expanding internationally via Amazon and
ChannelAdvisor. Your own international expansion may begin
with getting orders to international customers via export or it may mean
getting your product in front of new international customers by selling on a
new Amazon marketplace
NOTE:
Please keep in mind that each country has legal and industry requirements
concerning sales of products to consumers. Please review the Amazon Terms &
Conditions and Product Category Restrictions for any market you hope to sell
into and seek the appropriate professional legal and tax advice.
*As
of January 2013, ChannelAdvisor advisor supports listing in the US, UK, Canada,
France, Germany and Italy. We hope to add support for the other Amazon
locations in 2013.
1. Consider selling
throughout Europe
The Amazon marketplaces in the UK and
Europe are large and growing! ChannelAdvisor can help you list on Amazon.co.uk, Amazon.de, Amazon.fr
and/or Amazon.it.
(a) Amazon FBA Export:
If you are located in the UK and have or consider having some or all of your products in
Fulfilment by Amazon (FBA), the Amazon
FBA Export program allows buyers located in other EU countries to buy your
products off of your listings on Amazon.co.uk.
While using this program does not add new sales channels, it increases
the potential number of buyers who will be able to see and buy your products.
For example, if you list on Amazon.co.uk, a buyer in France will be able to buy
your product and have it fulfiled via FBA from the UK.
Benefits: Today, outside of your FBA fees, there are no
extra fees for using this program. Your listings are in English and listed on
the Amazon marketplace that you are familiar with. The
program provides export to either a 9 or 26 country set of European countries.
The country list can be found on Amazon Services Europe website.
Considerations:
When you select either a 9 or 26 export country set, you will need to comply
with the requirements for selling in these countries. Your products must be
allowed in these countries and you must consider the VAT implications. Amazon
Seller Central provides many resources for addressing these considerations.
(b) Amazon Marketplace Account
and the European Fulfilment Network (EFN):
Establishing a European Marketplace Account unifies all of Amazon’s European
marketplaces and gives you access to new Amazon sales channels in the UK,
Germany, France and Italy. ChannelAdvisor supports this setup with an EU Unified Account so that you can list from a single
Amazon Seller Central account allowing you to keep your products in sync across
all marketplaces. You can self-fulfil or use an Amazon service. If you are considering Amazon fulfilment, the European Fulfilment Network enables you
to send your inventory to the fulfilment center in the UK and to fulfil your
cross-border sales anywhere in the EU.
2. Expand Offers
Internationally
While many
retailers are interested in expanding internationally, one of the largest
challenges is that listing on a European marketplace requires the listing
details (e.g. product tile, description) to be translated into the local
language. To address this point raised by their retailers, Amazon has recently
launched a new tool in Seller Central called Expand Offers Internationally. With this tool, you can identify
which products in your inventory are already
in the Amazon catalogue for a targeted country. For these products, you only
need to provide the local price and quantity of your offer. This will help you
expand quicker with reduced costs.
Considerations: There are
requirements for listing on European marketplaces such as policies, tax
considerations and regulations. Your (out-of-catalogue) listings must be
translated into the local language.
Buyers in other marketplaces will still have Prime
advantages but shipping may require an additional 2 days. Finally, you
will need a local return address as Amazon will consider it a poor customer
experience if a foreign buyer needs to ship a return back to an address in the
UK.
Pricing: If using FBA to fulfil from
your home country, the fees are the FBA fee
(from the destination country) + EFN fees.
Sellers should become familiar with the rate card from each country they
intend to list in.
If you want to keep up with Amazon’s
updates, the Amazon Services group in Europe offers an excellent monthly
newsletter and set of webinars for retailers in Europe. Visit the Amazon
Services Europe for more information and to sign up.
Blog
post by Gina DeFrank, ChannelAdvisor Business Analyst, Marketplaces
This is Part II of our three part series digging into Amazon's Q4 results. A summary and guide to the series is here:
Part I: High level overview of Amazon's Q4 (Available here)
Part II: Deep dive into Amazon's Q4 3P performance (you are here)
Part III: Under the hood of Amazon's FC network (FC = Fulfillment Center) (Available here)
In Part I we discovered that Amazon's Q4 showed very strong profitability growth attributable in large part to the growth of the third party selling platform (what we call 3P for short).
How big was 3P in Q4?
Amazon provides a couple of datapoints that we use to triangulate the 3P GMV. For our analysis, we choose to use the % of items that are 3P as the 'anchor' and use some educated (and conservative) guesses around take rate, and 1P/3P average prices. Some Wall St. Analysts use a reporting line item that Amazon provides to do their own analysis and for Q4 ended up at around $40b in GMV as well (1P+3P).
Here's our analysis for Q4:
Highlights:
As mentioned in Part I - total paid units exceeded 1b for the first time
GMV from 1P was $19b and GMV from 3P was $20.5b - most people don't realize that 3P is actually larger than 1P. Amazon's metric that 40% of paid units are from 3P understates this fact. The reason why is the bulk of media sales are 1P and thus the bulk of 3P are in EGM, so you have different mix and ASP profiles there.
Amazon's 3P of $20b was another first - the first time they've crossed the $20b mark.
3P revenues were $2b - that's also a first - the first Q that 3P revenues crossed over $2b. If you assume this revenue is almost all margin, that's a $8b run-rate high margin business. Amazon puts the high-margin AWS business in 'other revenues' which where ~800m for the Q, so if you assume that the bulk of that is AWS, you can see that 3P is a $2b/Q high margin biz and AWS is $800m/Q high margin biz - which is why we tend to believe that for now at least 3P is driving a large chunk of Amazon's margin out-performance.
All in, Amazon's total GMV for the Q was $40b.
Amazon's GMV over the last two years
Here's a table that shows our analysis of Amazon's 1P+3P GMV over the last two years. It's quite impressive that a business so large ($15b in 2011 Q4) can still grow > 40% - essentially 3X the rate of e-commerce.
You can also see from the table that the first time the '1P/3P lines crossed' was Q3 of 2011, and for every Q in 2012, and thus for the whole year, Amazon's 3P GMV was greater than their 1P.
This chart shows the total Amazon GMV with 1P in blue and 3P in red:
Amazon's 3P GMV hits a bunch of 'firsts'
In addition to this being the first Q we've seen 1b paid items sold, the first $20b GMV Q and the first $2B in revenue from 3P Q, Amazon's 3P business appears to have hit another big first.
I stumbled upon this one when I saw the $20b in 3P and started to wonder how that segment of Amazon's business compared to eBay's GMV (apples to apples - marketplace to marketplace). I built the following table to compare the two:
As you can tell from the table, for the first time ever based on our estsimates it appears that Amazon's Global 3P GMV has exceeded eBay's global GMV (ex-vehicles). Amazon is very seasonal and I fully expect the trend to reverse in Q1 2013 and with eBay's accelerating growth rate, they may only cross again next Q4, but it's interesting to see how they have closed the gap there over the last two years.
Here's the same data in chart format:
Since both eBay and Amazon are growing faster than e-commerce, they are both in 'gaining share' mode.
Up next...
In the next and final section of this post, Part III/III we'll look at Amazon's Fulfillment network and examine the role it plays in increasing Amazon's profitability, and spinning the 3P flywheel.
Scot Wingo, CEO of ChannelAdvisor wrote this blog post. eBay is an investor in ChannelAdvisor.
Yesterday, Tuesday, January 29th 2013 Amazon announced Q4 2012 results after the market closed. Since the announcement, we have had an unusual number of inquiries from customers about the quarterly results and what it means for Amazon, e-commerce, Amazon's 3P business, etc. Therefore instead of our usual short-form summary of the q, we are going to expand our coverage this quarter into a three-part series:
Part I: High level overview of Amazon's Q4 (you are here)
Part II: Deep dive into Amazon's Q4 3P performance (available here)
Part III: Under the hood of Amazon's FC network (FC = Fulfillment Center) (available here)
Before we dive into our usual dashboard and cube discussions, there was an important new 'first' for Amazon we wanted to share.
You know what's cool?
One of favorite scenes from the movie, The Social Network, is when Sean Parker (played by JT) says that a million 'isn't cool', a billion is cool - in that context it's dollars, but in the context of Amazon's Q4, you know what's cool?
For the first quarter, our analysis shows that Amazon sold over 1B paid items for the first time in a quarter.
Doing the math on this is fun:
That's 126 items sold a second
Or 7,548 items sold a minute
OR 452,899 items sold an hour
**OR** 10,869,565 items sold a DAY
Think about that - 10.8m items sold a day during Q4 2012. Oh and BTW, 1b is from rounding down from 1.05b. While some of these are digital goods and what-not, the bulk are still physical. 39% of these items are 3P (410k) and the other 640k are 1P. This helps explain why Amazon has announced 8+ 1,000,000 sq-ft FCs already for 2013 - that's a LOT of items to deliver.
The detailed analysis of 3P and unit sales is in part II and a look at Amazon's FC network is coming in part III.
Finally, with that in mind, here's a clip for you:
Every Q we go over some of the highlights from the Q that we believe online retailers/sellers should takeaway from Amazon's results. They are collected in this handy dashboard that has columns for the results, Wall St's consensus estimates and Amazon's guidance. This Q we have added two new Key Performance Indicators:
1P unit growth - Amazon discloses the % of sold item growth as well as the % that are 3P. From there you can deduce the 1P unit growth and 3P unit growth.
3P unit growth - see above
Highlights from the Q:
Revenue and profits - when you look at the results this way Amazon 'missed' expectations on both fronts - this is what most of the headlines out of the Q have focused on. This has caused a lot of retailers to ask us: "Ok, Amazon's profit and revenue were down, why did the stock go up and why is everyone on Wall St. so excited?!" We have details on that below. The short answer is: profits and profitability are actually up and significantly above expectations due to 3P and other factors we'll dig into.
Growth rates - in our regular feature, the quarterly Amazon growth rate cube in the next section we detail these.
Active users - Wow, Amazon grew active users to 200m - up from 188m last Q and this represents 22% y/y growth. To put this in perspective, eBay grew active users 12% to 112m - with a big chunk coming from new mobile users. Amazon doesn't disclose the source of user growth, but given the popularity of their mobile apps and the kindle devices plus their aggressive international segments, those would be our best estimates of drivers of this metric.
Paid unit growth - Paid units grew 32% which was a bit of a step down from Q3's 39%. The real story here though is looking at the 1P/3P mix.
% paid items from 3P - Amazon reported that 39% of paid items were from 3P sellers. That initially feels like a step backwards because in Q3 we were at 41%. But if you look at Q411, the metric was 36% so it's actually seasonally quite a bit of an up-tick.
3P paid unit growth - Amazon' reported that 3P unit growth was > 40% y/y - note this is 2-3X the growth rate of e-commerce (14% as per ComScore)
1P paid unit growth - When you do the math on the datapoints (paid unit growth, %3P, 3P unit growth), you can deduce that 1P paid unit growth was in the 23-25% range.
Other highlights not in the dashboard:
Amazon added 20 FCs in 2012 (more on that in part III)
57% of revenue is NA and 43% is international
Amazon continues to invest heavily in China
EGM is now 65% and media 31% (other is the remainder). Looking back, this is the a new high water mark for EGM.
Q4 2012 Amazon growth rate cube
Note: EGM stands for Electronics and General Merchandise - Amazon-speak for anything that isn't a (e)book, movie, dvd, cd, mp3, videogame. Also, the industry 'watermark' we use is ComScore who has widely reported that Q4 2012 e-commerce growth (ex travel and grocery) was 14% y/y.
In the following cube we summarize all of the different Y/Y growth rates that Amazon reports (ex-FX). We find this helpful as you can quickly see where the growth is (Intl EGM) and where things are slowing (intl media).
Looking at the categories of media/egm - Amazon's media business is now growing slower than e-commece (10% vs. 14%), and Amazon's EGM business is growing 2X. From a geographical standpoint, each region is actually growing at the same rate 23%. In the US, media is growing in-line with ecomm and whereas internationally it is growing quite a bit slower (perhaps they aren't as far down the Kindle/eBook adoption cycle as we are in NA).
If you think of another dimension to this cube which would overlay the 1P and 3P growth rates, you can see that the fastest growing segment at Amazon would be: 3P international 3P followed by North America 3P EGM. Amazon doesn't disclose that detailed segmentation, but given that 3P units grew over 40%, each of these segments are growing at least that fast and probably 2-5% higher - giving the non-media Amazon 3P business a growth rate 3X that of e-commerce (14% as per ComScore).
Amazon's revenue and profits are down - why is the stock up!?
And now we come to the big question of the Q (and for the last 5 Q's really. Why is everyone on Wall St. viewing what looks on the surface like a terrible quarter with lower then expected revenue and lower profits as a huge win?
The answer lies in several important profitability measures that we haven't covered yet:
EBITDA - (This stands for Earnings Before Interest Tax Depreciation and Amortization you can read more here) Amazon's Q4 EBITDA was expected to be around $1b up from $821 last year and came in at $1.3B
Amazon's gross margins last year Q4 were 20.7% and expectations were for an improvement to 22.7%. Amazon's Q4 came in at 24.1%
Finally, Amazon releases CSOI (Consolidated Segment Operating Income) which is a way to look at how the business is doing in different segments (e.g. NA vs. Intl) when you take out some things like stock-based compensation. CSOI margin was expected to be 2.2% and Amazon came in at 3.2% - the fifth straight quarter they have blown away CSOI expectations.
Gross profit was up 41% y/y.
If I lost you in some accounting alphabet soup, Colin Sebastian @ RW Baird has a great chart that show this in a way we can all understand:
If you agree now that several key measures of profitability are up, then that begs the question of how can a business be getting more profitable as revenue growth rates come down. This is actually a very unusual combination and the reason lies in three areas:
3P - There's a 'hidden' part of Amazon's business that is growing > 40%, but amazon only recognizes revenue on 10% of it vs., 1P where they recognize 100% on 1P - therefore if a single $100 item to be sold moves from 1P to 3P, you lose $90 in revenue, yet you gain the same/more profit. It's very counter intuitive unless you live in our e-commerce world. Now play that out to the tune of 40% growth in 3P and only 25% in 1P and you can see that creates some serious revenue growth headwinds and actually masks what (IMHO) what really matters - GMV growth rate (more on this in part II).
High margin businesses are growing rapidly - in addition to 3P, Amazon has a couple VERY high margin businesses (because little or no incremental costs)- Amazon Web Services (AWS) and advertising. Those are outside the scope of what we cover here.
Last but not least, Amazon's shipping costs are coming down. details on that coming up.
So you can see that in the Oct 2009 Q, Amazon had good shipping margins that deteriorated as the company started to make heavy investments (FCs, DCs, Kindle, AWS, intl, etc.) and since September 2011, that trend has reversed with Q4's results getting us back to that early point. Also, international ticked up nicely which could be promising.
Amazon's fulfillment costs are going down??
One thing that I've been discussing with retailers is that Amazon's fulfillment costs are going down - one of the reasons they are opening massive FCs and agreeing to tax nexus in states like CA and TX. The logic is that if they can get a FC next to a big population center (SFO, LAX, DFW, etc.) then the costs to transport goods actually go down because the product is closer to the people When this cost goes down, they can...lower prices! And if they are doing this at scale, the prices they get from scale and a better mousetrap can make their products a better value after-tax than they were pre-tax.
Here's a chart that says all that in one picture:
Amazon is shipping more and more products, but the net shipping costs are effectively going down. We are getting a lot of questions about Amazon's FC capabitities so have more coming in part III.
Conclusion and up next:
Amazon's Q4 results sounded rough on the surface, but when you dig a layer down, you realize that while growth has come down to the low 20's, Amazon's metrics around profitability were way up and dramatically exceeded expectations. Shipping costs and the growth of high-margin items such as AWS and ads played a role, but we (of course we are biased) believe that 3P played the biggest role in this interesting trend.
In the next installment, we'll do a deep dive into Amazon's Q4 3P sales where we'll highlight some other amazon 'firsts' and then in part III we'll look at Amazon's growing fulfillment center network.
Written by Scot Wingo, CEO, ChannelAdvisor. eBay is an investor in ChannelAdvisor.
It’s a New Year so we’ve put together a new roadmap series
for expanding internationally with Amazon.
This week we’ll concentrate on US retailers expanding abroad, then next
week we’ll have a post dedicated to EMEA retailers.
Selling
outside of your home country can be a daunting task considering all the other
projects and priorities you have in 2013. That said, increasing sales by adding
new customers and incremental sales channels is probably near the top of your “to
do” list. Plus, being able to call
yourself a Global Retailer is just,
well, impressive!
Amazon has third-party marketplaces in the US, Canada, UK,
France, Germany, Italy, Spain, China & Japan*, and is trying to help retailers with
programs and tools to ease the transition into these new selling channels.
We recommend a phased
approach to expanding internationally via Amazon and ChannelAdvisor. Your own international expansion may begin
with getting orders to international customers via export or it may mean getting your
product in front of new international customers by selling on a new Amazon
marketplace.
In this blog post we
have tried to summarize the various Amazon marketplaces and fulfillment tools and
presented them in a way – easiest to the more complex – to get you going.
NOTE: Please keep
in mind that each country has legal and industry requirements concerning sales
of products to consumers. Please review the Amazon Terms & Conditions and
Product Category Restrictions for any market you hope to sell into and seek the
appropriate professional legal and tax advice.
*As of
January 2013, ChannelAdvisor advisor supports listing in the US, UK, Canada,
France, Germany and Italy. We hope to add support for the other Amazon
locations in 2013.
1. Consider selling on Amazon Canada
It’s right across the border for our US customers and lists in
English, making Amazon.ca an
easy next step for marketplace expansion.
Amazon recently launched the Amazon Prime program in Canada and is in
the process of adding support for additional selling categories. Today on Amazon.ca
you can use ChannelAdvisor to list Consumer Electronics, Home & Garden,
Sports, Tools and Watches. Additionally,
you can self-fulfill orders or use the Fulfillment by Amazon (FBA) service for
some or all of your products.
When it comes to getting paid, Amazon recently launched the Amazon Currency Converter for Sellers in
Canada. With this optional service, Amazon will convert your sales proceeds to
U.S. dollars and transfer funds to the U.S. bank account that you designate.
To get started, contact ChannelAdvisor support to request
the setup of a Canadian Dollar account.
2. Consider selling in the United Kingdom and
in Europe
The Amazon marketplaces in the UK and Europe are large and growing!
ChannelAdvisor can help you list on Amazon.co.uk,
Amazon.de, Amazon.fr
and/or Amazon.it.
Some stats from Amazon:
Amazon’s European marketplaces had over 164
million active customers last year.
30% of total Amazon units were sold by 3rd
party sellers.
Amazon.co.uk receives about 20M unique visitors
monthly. Amazon.de has 24M and Amazon.fr has 13M.
Source:
Amazon Webinar that sources Amazon Investor Relations
In expanding internationally, you may choose to start with
allowing orders from buyers outside of the US and then moving on to listing on
the UK marketplace. At a later time, you may decide to expand to listing on the
other European marketplaces in Germany, France and Italy.
Programs to assist sellers in reaching and fulfilling orders:
Amazon FBA Export:
In the US, for eligible products using FBA Global Export, orders
can be placed from international locations if the buyer is in a supported
country. When you enroll in FBA Export, all of your qualifying listings will be
eligible for international orders on Amazon.com, and there is currently no
extra charge for this service. While this program in the US is, currently,
mostly for media products, eligible non-media products can also apply. There is
a report in Seller Central where you can view which of your products are
eligible (Reports > Fulfillment > Eligible for Export).
If you choose to create an account in the
UK to list on Amazon.co.uk, you can also hold products in FBA in the UK. Products
must be exported to a UK FBA location and the FBA Export program allows
buyers located in other EU countries to buy your products. While it does not
add new sales channels, it increases the potential number of buyers who will be
able to see and buy your products. For example, if you list on Amazon.co.uk, a
buyer in France will be able to buy your product and have it fulfilled via FBA
from the UK. Today, there are no extra fees for using this program and the
European FBA Export program supports a much wide list of supported products.
Amazon reports their Q4 2012 results after the bell today January 29th 2013 (Tuesday). eBay and Google had a very strong showing, so now all eyes are on Amazon to see if they lost share from those two Titans, or all Titans took share from the rest of e-commerce.
The following table details the usual key metrics we track in Amazon's results for sellers/retailers that we think most illustrate how not only Amazon is doing, but most importantly for reader's of this blog, the health of the third-party (3P) marketplace.
1P vs. 3P for Q4
One area I have been writing about a lot lately is an analysis that Amazon's 3P business is getting large, in fact so far for 2012, I believe it is trending larger than 1P on a GMV apples-to-apples basis. For a refresher, here's a chart from a past blog post:
If Q4 comes even close to where I projected, then we'll have the first year that 3P > 1P on a GMV basis.
Jordan Rohan, Internet Analyst @Stifel had a Q4 Amazon preview report that had a couple of interesting datapoints along these lines based on his analysis and thoughts. First he had this chart that shows his analysis and projections going forward for GMV from 1P and 3P:
As you can see, he also has a similar view that for the first time, in 2012 3P GMV should be slightly larger than 1P. Then going forward, you see that by 2014, 3P is quite a bit larger in his model.
The second datapoint I thought was interesting was a look at the growth rate of 1P and 3P:
In this chart, the blue line is overall product sales growth (uses the left axis) and the right side is 1P's share of overall product sales - when you look at the delta of the two lines (where the red is below the blue essentially, you have 3P growth taking over.
For Q4, Rohan's thesis is that 1P will bump up as last year's comp was tough due to the Thai floods. We'll be watching this trend very closely and digging into the numbers to figure out what's going on with 1P and 3P.
What else to look for?
Additionally, we will be keen to hear anything about:
Distribution center build out - right now we are tracking 8 US DCs that have been announced but not opened. Sometimes in their quarterly releases Amazon offers some details on new initiatives in this area which we'll be looking at closely. Stay tuned for a new blog series diving deep into Amazon's DC network - as more sellers expand into FBA, we are getting more and more questions about this and have some interesting datapoints to share.
Any Prime/Fire updates - Prime is the turbo-booster of Amazon and we're always keen to see if there are any interesting new tidbits that Amazon shares. The Kindle Fire family of devices include a 30-day Prime trial and we suspect a good up-take from that offering which accelerates the Amazon flywheel, so we'll be listening closely to any new information there.
As usual, we'll be posting our analysis of the results shortly after they are posted.
Scot Wingo, CEO of ChannelAdvisor wrote this post. eBay is an investor in ChannelAdvisor.
Today we've launched the 2013 Winter Release, providing retailers access to some exciting new sources of demand on a global scale.
We've put together a summary slideshow at the Winter Release landing page, but we've included the highlights here:
New Marketplaces we support:
Groupon Goods-Submit your product for consideration and get in front of Groupon's 25 million subscribers
SHOP.COM-Number 70 on the IR 500, SHOP.COM is worth checking out, especially if you sell baby, apparel, shoes, electronics or home & garden products.
Trade Me-New Zealand's most popular marketplace, with 660,000 visits daily. Selling on Trade Me is a great way to introduce your products to a new audience.
Amazon Italy-Say "Buon Giorno!" to a new audience with support for Amazon Italy. This brings our Amazon support to include the US, UK, Germany, France and Canada.
Google Shopping
Google Shopping expanded into Europe and Asia, and so did our support. We now offer an enhanced technology to help retailers manage and optimize their PLAs anywhere Google Shopping is supported.
Power your Amazon Webstore through the ChannelAdvisor platform, synching up your Amazon Marketplaces and Webstore to best manage price, quantity, etc.
We've also added several platform enhancements to offer more options and control in the platform. You can find out all about the Winter Release by joining the.....
Winter Release Webinar! Tuesday, January 29th 2:00 PM ET With Link Walls, Director of Product Management
