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Global Marketing

Amazon: Technology Making International Marketing Easy

 

According to a Reuters article from earlier this year, more than one-quarter of all Amazon sales for third-party sellers on the platform were cross-border transactions. Leveraging its supply chain infrastructure, brand recognition, and international customer service operations, Amazon is able to provide sellers with a level of support that makes selling internationally nearly as easy as selling domestically.  Amazon offers both international Fulfillment By Amazon (FBA) in an expanding number of countries and FBA Export to sellers of all sizes.

Through its FBA program, Amazon is offering small and medium-sized businesses a means of quickly and effectively expanding internationally.  Amazon is able to distribute these sellers products to countries throughout the world with minimal shipping time, handle taxes and tariffs as required, and provide customer service in the local language on behalf of a business. Additionally, Amazon is able to provide sellers with connections to services that will assist with customizing product detail pages and messaging to adapt to local cultures on country-specific Amazon platforms.  Smaller companies are also able to capitalize upon the trust that consumers have for Amazon, reducing the need for individual sellers to build trust beyond that of Amazon reviews and rating.

This offers a significant opportunity for smaller businesses that may not have considered international sales an option.  An increasing number of these companies are opting to sell in Amazon’s expanding international channels, which has led to cross-border sales growth for Amazon increasing at a rate that is outpacing its 31% overall net sales increase.  This trend also means an increase in competition in all international markets that Amazon is able to serve as a growing number of sellers begin taking advantage of Amazon’s programs. For marketers, it may be difficult to continue with differentiation or low-cost strategies as more and more markets become saturated.  This may eventually lead to a large number of companies developing a more focused differentiation approach in order to target a niche market that may value a very specific product offering.

With the successes that Amazon is seeing from employing robotics, information tracking, and internet technologies to allow companies of all sizes to sell, market, and distribute products throughout the world, it is likely that other large global e-commerce players like Alibaba, jet, FlipKart, and Rakuten will work towards copying this strategy. There is a high likelihood that marketing globally will become more cost-efficient and simple for businesses of all sizes to incorporate into their businesses.  In domestic markets, companies will need to consider the potential threat that this ease of market entry by international competitors will generate. Additionally, companies, especially those that are early adopters, will have the potential to greatly increase their revenues and global reach.

References

https://www.pymnts.com/amazon-commerce/2018/amazon-vendors-international-payments/

https://www.reuters.com/article/us-amazon-com-trade-exclusive/exclusive-on-amazon-a-quarter-of-merchants-sales-are-cross-border-idUSKBN1GW1AE

Think You're Too Small to Export? Amazon Can Help

http://www.supplychainquarterly.com/news/20180501-study-amazons-fba-onsite-program-poses-a-threat-to-3pls/