80/20 of E-Commerce Newsletter – February 02, 2024

Amazon soars Q4, US economy at risk, 6 Bridges to Japan – From Hokkaido

Hey Everyone,

This week I’m writing to you from snowy Hokkaido Japan.  It was my birthday last week and my family and I are taking a trip in the northern part of Japan. 

Even in the most remote areas of Japan, Amazon fulfills.  

I even got snow gloves and a sleigh for my son delivered here by Amazon Prime Japan!

There are some highs and lows to report in this week’s edition of the 80/20 of Ecom newsletter.

Q4 was a record-breaking Holiday shopping season and closed out a robust 2023 for Amazon

According to EcommerceBytes “Amazon grew sales 13% in the fourth quarter of 2023, the same for each of its segments – North America, International, and AWS – when factoring out the impact of exchange rates.” 

The recent 2023 numbers show improvement as “North America segment operating income was $6.5 billion, compared with an operating loss of $0.2 billion in fourth quarter 2022; and International segment operating loss was $0.4 billion, compared with an operating loss of $2.2 billion in fourth quarter 2022.” 

Amazon FBA 3rd party sellers continue to account for the majority of sales on Amazon as they accounted for “61% of worldwide paid units” in Q4.  

Takeaway: Amazon continues to be the dominant ecommerce platform worldwide as growth and margins improved in Q4.  Also 3rd party sellers continue to be the dominant force on Amazon. 

The U.S. economy may be at risk due to the Red Sea disruptions 

This problem is getting serious guys.

The US government House of Representatives Coast Guard and Maritime Transportation held meetings this week to review the shipping problems caused by the Houthi rebel pirate attacks on commercial ships along the Red Sea. 

For US importers, the most affected route is from Asia/China to the US East coast because traffic is being diverted south of Africa (Cape of Good Hope).  This adds hundreds of thousands in fuel costs and thousands of more miles in distance.  

Source: Sayed Hassan via Getty Images

To avoid the backlog shippers are diverting traffic from Asia to the West Coast (e.g. Long Beach).  

Then they are using rail to move the goods inland to the get the products to the east coast final destination.

This is causing longer lead times and delays.  

And added costs.

“Rail dwell times are starting to tick up, and that rail car imbalances combined with increased demand could later lead to even greater congestion and dwell.”

“Shipping experts warned of possible congestion and higher inflation if the situation prolongs.“ 

Takeaways: 

Now’s a critical time to review your supply chain and gauge whether to source closer to your marketplace or diversify to other sourcing destinations and marketplaces.

Amazon looks to improve inbound fulfillment processes in 2024 | Supply Chain Dive

The master of shipping Amazon is using Generative AI to make their logistics even more efficient.  

The best is getting even better. 

Amazon President/CEO Andy Jassy said on a recent earnings call “Amazon aims to improve its inbound fulfillment processes and inventory positioning this year as part of its continued push to reduce costs in its logistics network.” 

Source: Justin Sullivan via Getty Images

According to Supply Chain Dive “Amazon is using generative AI to help its inventory positioning efforts, as it has built an application using the technology that forecasts how much inventory it needs in each of its fulfillment centers” according to CEO Andy Jassy.

Takeaway: If even Amazon is using AI to optimize their supply chain and logistics to cut costs – we should definitely learn from them.  How can you use tools like AI to cut your shipping costs?  Make shipments more efficient.  And boost your bottom line? 

6 Bridges to selling on Amazon Japan – 40 min training

Given the ongoing supply chain challenges and the fact that Japan is right next to the source, it makes sense to consider Amazon Japan as a marketplace if you want to expand your business in 2024.

I know many of you have questions about selling on Japan so I’d like you to signup for my “6 Bridges to Selling on Amazon Japan” at the “Convert More Clicks Summit” online on Feb 8th.  

I will walk you through each of the 6 Bridges to sell onto Amazon Japan and what tools you can use to get started right now (even if you don’t speak the language).

You can [REGISTER HERE] for $9.

I put a lot of time and effort into making this a valuable training for you.  If you feel it adds value, I would appreciate it if you would vote for me for the “Most Valuable Presentation”.  

7 Figure Seller Japan Mastermind in Okinawa, Japan Apr 8-10, 2024

Japan is the niche that smart Amazon sellers are focusing on in 2024.  

Did you know that in Japan, a “bestseller” yoga mat only has 3.9 stars and 373 reviews!?

This is a prime marketplace, 4th biggest Amazon marketplace in the world and growing.  

This is a 3 day in person event in Okinawa Japan where you will learn:

• Updated 2024 Roadmap how to sell on Amazon Japan
• New strategies to sell on Rakuten Japan
• How to get into offline retail stores
• External marketing strategies to instantly generate more sales 
• How to use AI to scale your business in Japan without speaking the language

You also will mastermind with 7 and 8 Figure Amazon Japan sellers like Nick Katz, Brandon Young, Tim Jordan and more.  

But we are keeping this mastermind intimate to maximize the experience for each seller.  You will get all your questions answered on how to sell up to an additional $300k to $965k in Japan in 2024.

Limited tickets are still available at https://7figuresellerjapanmastermind.com/

Thanks

Gary

Why should you care about selling on Amazon Japan?

3 Myths and 4 truths about Amazon Japan

When it comes to ecommerce and Amazon selling, everyone knows that the most important thing is selecting a profitable product to sell.

Well before even selecting the product, most sellers overlook the fact that they need to select the right marketplace to sell in.  

In fact, Japan is the 4th biggest Amazon marketplace in the world and still almost nobody is talking about it.

Here are some additional facts about Japan

• Amazon.co.jp is the #1 ecommerce site in Japan with revenue of US$13 billion in 2021
• 93 million online shoppers in Japan with an Ecommerce penetration rate of 74% 
• Ecommerce is forecast to grow at a yearly rate of 6% in Japan
• Japan has a population of 126 million (2021) which is DOUBLE the population of the UK
• Japan has the 4rd largest GDP in the world

But one key thing people overlook is this…

There’s far less competition, unsophisticated, weaker competition in Amazon Japan. 

In terms of absolute numbers, Japan has far fewer sellers than other major marketplaces.  In fact it was ranked #8 in number of sellers behind smaller marketplaces like Italy, France, and Spain.  

Moreover the competition is a lot less sophisticated in Japan than other countries.  

For example some foreign sellers don’t even bother to translate their listings from English to Japanese.  They even entered English into the description and in the backend.  They’re doing NOTHING to win over the Japanese customer so the bar is set really low in Japan when you have these lazy competitors.

Take for example this is the listing that has the Bestseller badge for “Thick Yoga Mat” in Japan.  

It only has 3.9 stars and 429 reviews.  

Note that the seller didn’t even bother translating the infographics into Japanese (they are left in English!)

You don’t need to be the best seller in the world to compete and WIN against weak competition like this.  

In addition, Japan has tremendous supply chain advantages

As the world keeps changing and we are hit with black swan events like the Suez Canal crisis and pirates firing at container ships which are driving up shipping container costs 2x-3x and adding weeks to shipping times, Japan enjoys a tremendous advantage because it is China’s neighbor.

You are going close to the source and you will save a ton of MONEY and TIME on shipping. 

In fact it only takes 7-10 days for a product to ship from China to Japan versus 30-45 days (or more) from China to the US.  

But at the same time it can be intimidating to sell into Japan.  

I’d like to debunk some myths about selling in Japan

MYTH 1 – You have to know Japanese to sell in Japan

FALSE – You can sell in Japan without knowing Japanese (I’m a case in point) 

Recently I was talking with Ecommerce veteran and host of the AM/PM Podcast Kevin King about selling on Amazon Japan.  

Then something interesting came up.

Kevin King asked me how do you get started selling on Amazon Japan?  

I said first you need to figure out your Product Market Fit for Japan.  You need to do product and keyword research.

Kevin said “I don’t read Japanese. How do I do that?”  

I told him I don’t really know Japanese either and I did it.  

So I told him 

– Which tools to use

– Where to look

– How to make sense of Japanese keywords if you don’t know the language

– So you can launch your product in Japan with less risk and more confidence

He was blown away – he didn’t know you could do that for Japan if you don’t know Japanese.  

And we did a training where we show you exactly how to do this.  – https://youtu.be/rBp9bwfn4WA

MYTH 2 – You need a Japanese company to sell in Japan

FALSE – You do not need a Japanese company.  In fact you need a what we call an ACP (learn more here) 

MYTH 3 – You need to register for JTC (Japan VAT equivalent)

FALSE – when you first start selling in Japan you can sell without getting a JTC number – save this for later until you cover a certain sales threshold.

In fact if you are already selling on Amazon US or Amazon UK, Germany or other marketplaces you have many advantages selling into Japan.

ADVANTAGE 1 – REVIEWS 

If you already have a seasoned listing in Amazon US or Amazon’s EU marketplaces, you can carry over the listing and the reviews.  

This means if your SKU has 700 reviews on Amazon.com then you can essentially launch on Amazon JP with 700 reviews.  

And with fewer competition the average review threshold in Japan will be much lower than in other marketplaces.  

This means that you will enjoy higher conversion rates as well with your existing reviews launching into Japan.

ADVANTAGE 2 – Amazon Seller Central in Japan is in ENGLISH

If you are already familiar with Amazon US Seller Central then you will feel right at home in Japan as the menu and navigation is virtually the same. 

ADVANTAGE 3 – PPC costs in Japan are much lower than US or EU.

According to a recent case study by PPC Ninja, average PPC costs in Japan are as low as $0.29 per click which is nearly unheard of in other Amazon marketplaces.  

ADVANTAGE 4 Product Research tools are available for Japan

You can do product and keyword research tools with your exiting tools such as Helium 10, Jungle Scout, and Data Dive, all of whom support Amazon Japan.

Moreover, even Pickfu now supports Japan so you can do additional market research using familiar tools.

All in all these are the reasons why Japan should be on your Amazon Selling Radar in 2024.

If you’d like to accelerate your selling into Amazon Japan, I would like to invite you to a 3 day in-person event in Okinawa Japan from Apr 8-10.  

You will learn the exact roadmap on how to sell up to $965k on Amazon Japan in 2024: https://7figuresellerjapanmastermind.com/

Hope to see you soon,

Gary