• 26/02/2024 05:50

How small businesses can enter new markets: from starting on Amazon to multichannel sales

The domestic market of Ukraine has shrunk since February 2022. The main reason is the decrease in the number of consumers and the reduction in real incomes of the population. Therefore, an increasing number of domestic business representatives are looking for opportunities to expand their geographic presence. Companies with a strong background and financial strength are opening representative offices in Poland and other EU countries. But small businesses cannot afford this method of entering new markets, which involves significant investments and a long time to achieve profitability. The optimal solution for such small companies with a limited budget is trading on electronic platforms like Amazon.

How small businesses can enter new markets: from starting on Amazon to multichannel sales

How to start sales in this largest online store in the world for small and medium-sized businesses, how to scale trade after a successful start and understand that the time has come to develop a multi-channel sales system, said Andrey Pevkin, an expert on e-commerce. As a member of the Ukrainian Union of Industrialists and Entrepreneurs, Mr. Pevkin is well aware of the needs of Ukrainian business. Thanks to his consulting support, more than 120 Ukrainian brands found their niche on Amazon in 2023 and continue to increase their turnover.

A good start is the key to success

For small businesses with limited financial resources, Amazon provides unique opportunities that open the way to new markets. Here are five reasons why Amazon is the most effective start in a new country:

1. Global reach and access to millions of customers.

Amazon is one of the world's largest online platforms, providing access to millions of active shoppers every day. This opens the door to a product at a global level without the need for significant marketing budgets.

2. Using the Fulfillment by Amazon (FBA) infrastructure.

Amazon takes care of the storage, packaging and delivery of goods, freeing businesses from the costs of warehousing and logistics. This service is not free, but it significantly reduces operating costs, allowing you to focus on product quality and growth strategy.

3. Minimize Marketing Costs with Amazon Advertising.

Amazon provides effective advertising tools that allow you to attract customers without huge marketing budgets. And targeted advertising and results analytics allow you to maximize conversion at minimal cost.

4. Easy start without the cost of renting retail space.

Without the need to rent physical stores, as well as the cost of sales staff, equipment, etc., significant savings can be made that can be used to improve product quality and marketing innovation. At the same time, a virtual presence on Amazon provides businesses with the flexibility and opportunity to explore the market and adapt to changes in consumer behavior.

5. Access to insights and analytics for strategic development.

Amazon analytics data allows you to better understand customer needs and optimize your assortment. This helps in making strategic decisions aimed at growth and maximizing profits.

All these factors make Amazon an ideal partner for small and medium-sized businesses looking to expand their presence in new markets while minimizing costs and maximizing efficiency.

p>

How to scale your first financial success

When the business has found its niche on the platform and has effectively organized a sales system, you can move on to scaling your success. These steps will help ensure stable sales.

Expansion of the range of goods. After analyzing your sales data and identifying popular categories and products, it's time to consider expanding your assortment by adding products that meet the needs of your target audience.

Listing optimization. Descriptions, images and keywords in product listings require constant updating and optimization. It’s a good idea to use customer reviews to improve product descriptions.

Effective advertising campaigns. Use Amazon Advertising to create different promotion methods, test keywords and advertising strategies to optimize costs and increase visibility.

New markets and locations. Consider expanding into new regional and international markets using Amazon Global Selling. Conduct market research to understand demand and competition in new markets.

If a business has successfully leveraged these scaling opportunities on the platform, it can create a sustainable foundation for long-term success and retail growth.

How to understand when it's time for the next step

The decision to develop a retail business in a new market depends on various factors, such as the size of the business, the nature of the products and strategic goals. However, there are several signs indicating that the time has come to develop the retail business.

Sustainable sales volume. If a business on Amazon demonstrates stable and sustainable sales volume, then this can be a good indicator of continued demand for this product.

Strong brand and loyal customers. If you have created a strong brand and a base of loyal customers who prefer these products, developing your own retail can help you better manage your customer relationships.

Desire to control the customer experience. If it is important for a brand to control every aspect of the customer experience, including packaging, delivery and customer service, in-house retail will provide more opportunities to manage these processes.

This approach will allow you to start a business in new markets with minimal investment, develop it in a safe environment, then scale it up and transfer it to a multi-channel format.

Andrey Pevkin: “Amazon is the most effective way to start a business in a new market . He does not need such significant capital investments as developing his own online store or physical retail. In turn, it makes it possible to explore the market and its capacity, find your niche, study the characteristics of customer demand, customer expectations from product quality and service, test various marketing hypotheses and adapt the development strategy if necessary. Once a business has done this homework, it can scale on or off the platform. It's convenient, safe and profitable. I am sure that this approach will allow Ukrainian business to find new markets and sources of income. This is an issue of great importance for the country, because successful small and medium-sized businesses are the key to economic stability.”

minfin.com.ua

Leave a Reply