China’s ecommerce sales are expected to surpass 2 trillion USD in 2020. Therefore, many online vendors are wondering how to sell products online in China, the largest ecommerce market in the world.
In times like these, making money while working from home, and passive income is becoming more and more important. Are you new to the idea of becoming an online vendor? Or are you a successful Amazon FBA seller, wondering how to scale up your business and tap into a new market?
This article by Tenba Group, your Chinese digital marketing agency, reveals how you can amp up your Amazon sourcing strategy, tap into a large new market, and expand your Amazon FBA business successfully!
What is Amazon FBA?
To begin with, let’s start with the basics. Fulfillment by Amazon (FBA) is a popular and profitable way of selling products on Amazon. In fact, more than half of all Amazon sellers utilize FBA as their fulfillment method.
It works as follows: You source your products and send them to an Amazon warehouse. Amazon then takes over. As soon as a customer orders one of your products, Amazon packs and ships them on your behalf.
Keep in mind that, at the end of the day, the Amazon FBA business is a trade-off. You won’t need your own storage since Amazon will take care of this for you. Consequently, Amazon is charging you for this service in the form of a commission. This depends on the product category and your location, as well as shipping and warehousing costs.
To date, the most profitable product categories for Amazon FBA sellers are books, products for babies, jewelry & accessories, sports gear, and electronics. Keep in mind that your startup business or SME can’t do everything and can’t compete with everyone. Therefore, identifying a niche is the pillar for your future success in the online world!
A Word About Your Niche
To find your niche, consider your passions and hobbies, where you have special knowledge and interest. Secondly, check the demand and market value, as well as future trends.
For example, you can use tools like Google Keyword Planner or SEMrush to find out what people look for on search engines and where you potentially have a lot or little competition. Make sure to optimize your online presence for these keywords to appear on the top of the search engine results pages.
Speaking of Keywords...
Likewise, identifying keywords that are sought after on Amazon and rank well is important. For example, you can use the Keyword Tool by Ahrefs to research Amazon keywords. Add them to your product description and title to ensure that your potential clients find your brand easily. Stand out from the competition, for example, by doing a keyword gap analysis.
As the competition is very intense on Amazon, and most sellers optimize their content, you may want to consider Amazon PPC ads (pay-per-click campaigns) to appear above the organic results on Amazon. Amazon marks these results as “sponsored”.
Finally, identify products from your niche and make sure to check if (and how) your audience is willing to spend money on them. Keep in mind the commission you pay to Amazon as part of the FBA model, when selecting your product.
Start & Scale Up Your Amazon FBA Business
In this section, we will look at opportunities for sellers, who are new to Amazon as well as Amazon FBA experts.
Let’s start from the beginning!
I. New Amazon Sellers
If you are new to selling on Amazon, you will have to set up your business first. In order to do so, follow these 7 steps below:
- Create your Amazon Seller Account
- Research your niche & products
- Source your products, e.g. from China
- List your products on Amazon
- Market your products with Amazon PPC ads
- Sell your products on Amazon marketplaces around the world
- Hire a digital marketing agency to help you out, if you get stuck
An investment in physical products can start with as little as 500 USD to establish a basic inventory. However, the majority of sellers invest 2,500 USD to 3,000 USD in products at the beginning.
Once your business is established, most Amazon sellers make at least 1,000 USD worth of sales per month. But the sky's the limit!
Sourcing Products from China
You may remember that at the end of the last century China was known as the ”world factory”. The Middle Kingdom was famous for producing and exporting fashion, shoes, electronics at great value for money.
Today, this trend is becoming even bigger, although the concept is slightly changing. Of course, we are talking about “Made in China 2025” (中国制造2025).
China’s new export strategy since 2015 aims at producing higher-value products and services at an increasing volume. There are a number of tax incentives from the Chinese government, enabling the Middle Kingdom to become a more independent and technology-intensive nation.
This also affects Amazon, and contributes to the variety of attractive products and ultimately the success of its online marketplaces. In fact, more than 40% of Amazon sellers are based in China, and the majority of sellers source from the Middle Kingdom.
Click here to read an in-depth article about sourcing from China - whether you are using dropshipping, reselling, white-labeling, or creating your own products.
Keep in mind that establishing a good relationship with your supplier plays a special role in China. Building and maintaining an excellent Guanxi (relationship) is key to a successful business partnership. Click here to read more about doing business in China.
In particular, if you are sourcing from Alibaba or AliExpress, simply communicating in English won’t get you a good deal or a long-term partnership.
II. Amazon FBA Experts
Since you are already familiar and successful with selling your products on Amazon, we may also have an idea or two how you can boost your business!
1. Start Your Own Online Shop
There are various ways for selling products on Amazon (and other online marketplaces). Besides Amazon FBA, you can also register as a traditional seller (without using their fulfillment services). Or you can sell your products on other major marketplaces like Target, Walmart, or Google Shopping. The number of online platforms, including niches, is sheer endless.
But...we’ve also got another idea. Successful Amazon FBA sellers can take their business to the next level by starting their own brand and webshop for higher revenue and more control of your business and brand. You can continue selling the same products via Amazon FBA until your brand takes off or keep doing both for maximum reach. Just make sure you don’t cannibalize your own business!
As a first step, you can take your existing products and put them on your own website and webshop, which you then promote via SEO, social media, PR, and more. If you previously used Amazon FBA, you can continue to do so for your WooCommerce shop. Alternatively, you can also manage the fulfillment part yourself or hire an external fulfillment partner.
Getting started with a WordPress website and a WooCommerce shop is easier than you think. Or you can always hire a web design agency to give you a helping hand.
Alternatively, you can take inspiration from a successful product you are sourcing and selling, and create your own product. Make sure to don’t infringe any copyright or appear as a (cheap) knockoff. You can improve the product based on consumer reviews, add new features, improve the quality, and much more. Click here to read about manufacturing your own product in more detail.
Next, let’s look at the ultimate goal, you may be striving for, when you sell products online - whether on Amazon or other online platforms.
2. How to Sell Products Online in China
Chinese consumers are “hungry” for exclusive, high-quality products from abroad. They associate luxury, safety, and excellent quality with them. In particular, imported products for babies, cosmetics, fashion & accessories, jewelry, and organic food are extremely popular in the Middle Kingdom.
The Demand
To give you an idea about the demand, let us impress you with the following numbers. In just two months (January and February 2020), China’s import and export volume of the CBEC retail was 2.45 billion USD. That’s plus 37% compared to the same period the year before - despite the ongoing Coronavirus-pandemic!
CBEC shoppers are typically 25-34-year-old, well educated, and have a higher income.
Products & Platforms
Foreign companies from around the world have discovered this special market and are hustling to sell to China. Did you know that Amazon left the Chinese market in 2019 because it didn’t adapt to the local structures? As a result, the Chinese ecommerce giants Alibaba and JD took over.
However, there are still many opportunities for your products (and services) to sell in the Chinese market. For example, cross-border ecommerce (CBEC) makes entering the Chinese market possible.
Keep in mind that Chinese social media sites play an enormous role in the everyday life of Chinese consumers. In order to reach them, make sure to be active on those commerce platforms in China which fit your brand, do cross-promotions, and engage with your audience.
The largest CBEC platform is Tmall Global (Alibaba), targeting consumers who seek branded products and a premium shopping experience. Besides, Chinese consumers love JD Worldwide. Since Tencent, the tech giant behind WeChat also invested in JD, this platform also cross-promotes products in WeChat searches.
Amazon FBA Vendors: Sell Online in China
Amazon FBA experts, who have mastered their online store outside of the Middle Kingdom may be curious to scale up their business by tapping into the largest ecommerce market in the world. Get ready to sell to China with ease and amp up your online business!
If you manage to sell your products on online stores in China, you truly are a master of the online selling world. So, get your international products online and sell them in China via cross-border ecommerce.
Keep in mind to
- Ensure that your product is legal to sell in China and on the CBEC list of allowed products
- Register your trademark in China
- Create a Chinese website to increase the legitimacy of your business and provide localized information. You can even set up your own ecommerce shop if you like.
- Implement Baidu SEO and/or PPC to rank high on China’s largest search engine
- Run online PR to create initial brand awareness
- Implement social media marketing campaigns to increase your reach
- Choose your initial POS (point of sale) with the best fit for your brand (e.g. your own website, a WeChat store, Taobao, etc.) and join Tmall, JD & Co. as a second step.
- Hire an expert for the Chinese market to save time and money
The Takeaway
More and more people are starting their own business, selling products online. Amazon FBA is a great way to get started. It comes at a price but gives you the flexibility to test the sales and market response of new products at relatively low risk.As with any business, make sure to research your niche, target audience, and competitors before getting started. You may be tempted to start with more fun parts of the business, but having this foundation will ensure your success in the long run.
New Amazon sellers got to know the basic steps on how to get started, including sourcing from China. Likewise, Amazon FBA experts got inspired to start their own webshop and learned how to sell products online in China.
For more tools, resources, and courses on Amazon FBA click here.
Contact the China ecommere agency of your choice, Tenba Group, to boost your business in the Middle Kingdom and around the world - from influencer marketing in China to WeChat advertising and China SEO. Ask for our FREE CONSULTATION to get to know us!
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