Gateway to Amazon Europe ⎜ Marketplace Distri ⎜ EP 212
Ryan Cramer: What's up everyone? Welcome to my corner of the internet. I'm your host, Ryan Cramer. And this is, Crossover Commerce presented by PingPong Payments, the leading global payments provider, helping sellers keep more of their hard earned money. Hey, everyone. Welcome back to another week and episode of Crossover Commerce. I'm your host, Ryan Cramer, and this is my corner of the internet where I bring the best and brightest in the Amazon and e- commerce space. What does that mean to you? If this is your first time or your 212th, which that is what today's episode is 212, we appreciate you tuning in just to learn and elevate and get more knowledge about the Amazon e- commerce space. That's where I bring a guest, a lot smarter than me clearly, but I bring them into my corner of the internet so we make sure that you can apply this to your business, your e- commerce brand, your growing enterprise, if you will, all the way up to if you potentially might be exiting a brand or business, or just happen to do business in the e- commerce space, this is the podcast for you. But before we get started, just want to give a quick shout out to our presenting sponsor, PingPong Payments. Who's PingPong Payments? They are a cross- border payment solution, helping sellers keep more of their money. If you're selling or nationally, which is what we're going to be talking about today, or in different marketplaces all around the Amazon ecosystem, you are receiving funds in different currencies. News flash. Amazon might be doing that for you and charging you a high conversion fee. You don't want to be paying more fees than you have to. Use PingPong Payments to receive more funds, have control of over them, and when they hit your bank account, and just ultimately have control over your business. Sign up for free usa. pingpong x. com/ podcast, in order to sign up for free and catch all of our episodes that we've released on the audio format and video format. And catch the transcriptions, if you will, if you miss key takeaways or if you miss to a couple of notions from past episodes and guests, you can go and check it out there. But we're on all your favorite podcast destinations, whether it be Amazon Music, Google Podcast, Spotify, Apple Podcast, or if you're watching live, this is an interactive show. So if you have questions and are watching on LinkedIn, Facebook, YouTube, or Twitter, go ahead and ask your questions, let us know are you're listening from, and we'll make sure that we get your questions answered if they're applicable. And of course, we'd love to say hi to people that are listening and engaging with us as well. So without further ado, we're kicking off the week really strong this week. Lots of great content coming to your way. Today's no exception. We've titled today's episode, for those who haven't read the description, Gateway to Amazon Europe. What does that mean? Amazon Europe and what functionalities you see right there on the screen. If you're watching this, EU that doesn't necessarily mean EU. It could be Europe, it could be England, it could be all sorts of other functionalities. Over 20 now marketplaces in the Amazon ecosystem. What does that mean for your brand, if you're looking to grow internationally? If you're selling just on amazon. com, you might be looking to different marketplaces, like in this case, Germany or United Kingdom or Italy, for example. If your brand or product fits those descriptions, we're going to be talking about what makes sense for you and how to get into that ever evolving ecosystem. So without further ado, we actually, with episode 212, we brought on guest who is with Market Distri and his name is Stef van Boekel. He is the founder and one of the actual... Let me pull up real quickly his little bio, if you will, there is a... I'll just actually bring him in because he's one of the founders and helpers of this marketplace, growing over I want to say six figures in ASINs, that is helping grow internationally across the all Amazon brands. Stef, welcome to Crossover Conference. That's the button I was looking for. How are you doing today?
Stef van Boekel: Thank you, Ryan. I'm doing well. I'm excited to be part of your show.
Ryan Cramer: I'm just glad we can see you and hear you today. For those listening, we were having a little video camera troubles today, but that's Tuesday for you. It's the Chinese New Year, and I also want to wish everyone who might be listening to this a happy Chinese New Year, for all of our international friends and partners out there too. So this is February 1st. Thanks for joining us on a quick... I guess it's the first part of the year, calendar year, but we appreciate the time for you hopping on today and talking about a really cool topic in Amazon Europe. But before we get started, tell me a little bit about, Stef, where you are, where you're coming from, and just a little bit about background for yourself and for Market distribution or distri season.
Stef van Boekel: Sure. So I'll start with me, who I am. So my name is Stef, I'm from the Netherlands. 37, tomorrow turning eight. So don't forget to put it in your calendar. I'm from the Netherlands. I lived actually in five countries. And now, for the last two years, I've lived in Italy also, where now the majority of my team is located. So we are in a city called Lucca that is in Tuscany between Pisa and Florence. So I'm actually looking now over the Tuscan Hills, nice view.
Ryan Cramer: Very nice view.
Stef van Boekel: Married, two children, and in the Amazon industry since 2011. So I'm a real dinosaur, I think, especially for European standards. And always been active, actually, on the European level. So from Italy to Norway, from Switzerland to Ireland, worked with Amazon for several years. But also, I mean, a lot of marketplaces, especially locally, and I worked basically with all the major ones over the last 10 years. And yeah, now we're focused on still marketplaces but little more experience and supporting all kinds of brands in Europe, but also a lot outside Europe entering the Amazon industry and supporting them make some extra business on this interesting sales channel.
Ryan Cramer: That's a very conducive and very well rounded way to put it. So there's a lot of ways that I look at you. You said that you're a dinosaur in this space, which again, in comparison to the industry standards, that can be you've experienced and seen a lot of evolution, is what I like to call it. You're very well versed in all the changes Amazon has made. Your focus is in what? Dot com, but you said mainly getting people into the European Amazon marketplace. Is that correct?
Stef van Boekel: Yeah, I've been doing business also outside Europe, but my main expertise is always on a European level. So I worked within companies as mainly in the majority of years as an interim manager, as a freelancer. And then when a company had the ambition to start selling to the end user through marketplaces in Europe, basically they hired me to set that up. So I was looking at the customer support that we speak different languages, at the payment providers, at the warehousing, the logistics, the local return addresses, basically everything that's necessary to be able to sell on a, let's say on an optimized level, towards the consumer. So, yeah.
Ryan Cramer: That's amazing. So ave you ever sold to Amazon yourself? Or is it always been helping other brands kind of scale and find that growth ecosystem?
Stef van Boekel: No, I never. I work for many brands, small brands, big brands. Never actually, I'm not that creative. I'm maybe creative in business, but I'm not that good in product ideas. I like to work with the product entrepreneurs. I often see within the business that are two type of entrepreneurs. One is the product guy or as well, the commercial guy. Well, I'm actually the commercial guy working with all the product guys that can focus on the product and I can actually focus on the business development part.
Ryan Cramer: That's amazing. So what about what made you get into the Amazon ecosystem, if you will? What about the opportunity presented itself, even back when you said you were starting the business? And how did you forecast that as a this is an opportunity where it'll just yield results long term, not just of, hey, this is a flash in the pan, Amazon's going to be around for many, many years and this is going to allow businesses, both big and small, to flourish online and find a different channel of growth?
Stef van Boekel: Well, it actually started in 2011 with Groupon. Groupon used to be just a marketing website where you would buy coupons, and that was only, let's say for experience not for products. And then they launched a new concept and there was Groupon products. They were only selling one product for 24 hours while nowadays there are probably thousands of products online. So basically, I was working for a company and that company had, the owner, was also doing some trade. He had overstock and he said," Stef, can I do something with it?" I was client of Groupon. And I said," Yeah, well, I don't know, Groupon, let's give them a call." And so I called them and said," Yeah, we like the product, we'll put it live but you have to manage everything yourself." So basically, people would buy a coupon and they would need to go to a landing page. So basically, you need to set up a web shop or at least a temporary web shop, a payment provider in case they also wanted to pay for delivery cost, but also the rest of the operation. You need to have stock, you need to have shipments, you need warehousing, the return addresses, everything you need to set up. So I start as a pilot project, as a more of a favor towards to that company owner. And I mean, then I knew more products or know more owners so I sold quite quickly a lot of those products. He was happy with it so then I contact to some other people. And before you know it, it became my full- time business. And so what I did in those years was always directly working on an international level, and that was by then, it was really not common. If you would go to the tax authorities or to any logistical company, there were no international contracts or you were paying consumer price to ship to those countries. So to give you a bit of a background, if I wanted to sell in France, I actually needed to fly to France to talk to La Poste. I went to the UK to talk Royal Mail. I went to Scandinavia to talk to Bring. So I really had to set it up locally, and obviously, that gave me a good idea of what actually eCommerce is. eCommerce, especially in Europe, is logistics, is operation. And that's how I actually got involved with it. And I think one of the reasons why we are successful is I've been talking for 10 years with brands about the importance of cross- border eCommerce and about the importance of eCommerce platforms. And in those 10 years, you've seen it all happening, right? So you were talking to the big brands and you were explaining them," Yeah, well, your future is going to be Amazon or other marketplaces." And then they would say," Well, I don't know, we have this distributors there. They have exclusivity. We don't know, cross border sales is scary, et cetera." And so that's basically been my whole job, is on one side look at are we operational on a level that the end user is happy with his experience. And on the other hand, I was always talking to brands about the importance of to start thinking about an international level. Because before, I mean, keep in mind the inaudible market was quite a luxurious market for several years. If there was a trend, for example, I'm now in Lucca. And if the case I would sell, for example, televisions, and I would sell the television for 500 Euro. And then in Florence, and that's like an hour drive, the same person would sell it for 50 or cheap, hey, no problem. I mean, nobody from Florence on would drive from an hour to Lucca. So what's the issue? So when the moment obviously e- commerce came down, the whole ball game changed because there was one shop, one guy, that started playing around with prices or was smart with market campaigns. And they were attracting people from every store or every location. But the good thing actually was, is look at it inaudible, I mean, at least the revenues, and also the taxes and also the work, stayed in that country. But nowadays, through cross border e-commerce, there are companies with much more resources. So basically, the staff is no longer in that country. The taxes are no longer paid in that country. So from that perspective, it's not only for your own business reason that you need to be smart. Because otherwise, I mean on European level, there are much more smarter guys than 50 kilos around you or than a country or than on a European level. So I always try to convince people do it. I mean, don't... It's going to happen left or right. And I can tell you, with all brands I've been talking to in the last 10 years, there is literally none that didn't decide now to focus on cross border e- commerce. It's part of the game. And what helps me, I'm no longer getting stressed when certain new compliance come up or new operational complexity. I mean, when I was starting, I could ship a product with two weeks delivery and there was no issue. Yeah. Except when you would ship to South Europe, because they were directly giving me all kinds of names. But that was the service level. That was okay. That was acceptable. But by now, if you don't ship within 24 hours and provide the track and trace and they can able to change, for example, the address, you're no longer a good provider. So a lot changed, let's say, but it's good to have the very basic fundamental of how business actually is being run from an eCommerce space.
Ryan Cramer: That such a fascinating evolution, and you touched on a lot of fascinating points. And what I mean by that, is just the evolution of expectations, I think is a major component of both seller and buyer, of how quickly a product gets to doorstep. But then also, like you said, the compliance and the complexity of which has now made it more difficult for some people. For you, I'm sure, it's a walk in the park. It's not a shake your head, what do we do? It's not this detrimental notion to you because you've had to deal what you change so often. So what is it that makes Amazon in Europe so difficult to comprehend or grasp? If I'm a brand that kind of evolves and I want to start selling in dot com, and that's where a lot of people initially start, moving it to a different marketplaces. Again, each country has its own marketplace for the most part, in Europe. What makes it so difficult for people to grasp the notion of there's a small tweaks you have to make, but it's not as difficult? Or it might be... It's not as difficult as maybe one would suggest or expect, but more of a opportunistic approach. And it might take a little bit more time, but that's worth it, ultimately.
Stef van Boekel: I mean, in general, if you want to grow as a business, you can do two things. Or you sell more to your existing market, basically by improving your product or get variance on your current product. Or the second solution is you open up a new market. And what is a luxurious position in America is that you can reach 300 million consumers that all know UPS or can pay to one bank account. Can you talk in English. While if you want to reach 300 million consumers in Europe, you need to talk five languages. Currently, Amazon is active in eight countries. So those are right now, you have Polish złoty, you have Swedish Krona, you have the pound and you have the Euro. So there's already four euros and you have all different VET levels. So, and then you have different logistical costs, because in every country it varies. Also, the return costs varies. So to set it up is one. You need to set it up all focus on the local market because is no such thing as a European product strategy. But then also you need to control the variable cost, because to give you a simple example, if you would ship something, for example, from the UK to let's say Germany, the largest Amazon market, and you would, for example, use fulfill merchant of FBA, but that's in this now you use fulfill by merchant. Then you ship a product with Germany. Then it arrives in two days. This person is not at home. So if you do not have a good contract, that the product stays in Germany. After the ringing twice a door, the product will automatically go back to the international return hub. To ship a product from UK to Germany is maybe costing eight Euro, whatever, depends on the volume and the weight, but actually to get a return probably is going to cost you double. So you paid eight to ship, I paid 16 to go back. That's 24 euros, but actually the product doesn't come back immediately. It stays in the hub. So basically, it can stay there for a month or two months or three months. Then you get a back. The parcel is completely F'd. So you are unable to reuse the product anymore. But in the meanwhile, obviously the client is not happy because he said," Yeah, I shipped it. I bought a product. Why it's not here? He said," Yeah, it's returned to, I want to have it." So you send it again the same product to the client. So basically, you are paying again a shipment. You have two products gone right now. So and in the meanwhile, your customer support is quite heavily. Plus, you need to have a German person focusing on the German mark cause otherwise you're going get complaints. So this is just one example how you can think you set a good network, but because unable to control the variables, the business is actually not, not really profitable. So I think every country has its own rules when it comes to buying online. Every country has its own VET levels, currency is several levels, so there are much more cost to keep in mind. And I think for somebody that is not from this industry, I mean, and not been working international, I think it's just too much to really understand how to oversee the complete operation and to make a profitable business. Especially in the first year, you're going to have a very painful and costly learning curve. So the European market is, if you look at on the number of online users, is twice the size of America. So from that perspective, if want to open new market, Europe is the best market to go to, but it's not a side project. And you go also that can hire a project manager that's going to understand to be able to talk to local accountants that understands the local laws, understands the local warehousing, et cetera, et cetera. So I think that all those different for variables, that makes it a different business. So I always say it's also one of the reasons why I say we are not an agency, because I'm also a Northern... In a Europe at least, or any eCommerce business in Europe, it's not a marketing business. If you want to set up a business for Amazon in Europe, it's not that the majority of marketers. It's actually operating business and you need marketers, but without actually controlling the operating, then you can have good marketers but you're going to have a bad customer experience at the end and then you have a short term business.
Ryan Cramer: So it makes sense, obviously, when I hear that you have to have a unique strategy for almost every marketplace, not just a European marketing strategy. You need to have a Germany strategy. You need to have an Italy strategy. I need to have a UK strategy. Is that how you educate and you kind of break down for brands entering the space? It's more unique and different, you need to be cognizant the localization and really play by the rules, in that regards. Is that as niche as you go, or do you want to play a broader approach in that regards?
Stef van Boekel: I think, in general, when you settle, for example, when you make contracts with, for example, logistical company, you talk European, obviously, because you want to make sure the volumes are going to one logistical party or maybe two and that's about it. You don't want to work with all kinds of local logistical companies because basically, the more volume, the better you can negotiate the pricing. But you need to understand the specifics of the countries to avoid any risks in the future. So we personally, at least from our company, we do not have a European strategy. So we have a German in- house, just a German marketer, a France in-house goes to France market. Because if you would hire a translating company, you're just going to translate your product pages, but actually knowing the local behavior of the client, the trends of the client, of the local market, surely you're going to do some business, but on the long term, the guys that are smarter and have a better idea of how it works locally are going to win. And the one that is winning on the end create more resources that at the end, they will win on the long term. So no, there is no things as a European strategy. There's only a local strategy. That's the only way, if you want to win on the long term.
Ryan Cramer: So tell me about, Stef, and the data is super fascinating about the cross borderer buying aspect of everything. Of when we have customers or clients and they are in different countries, the notion of, Hey, the customer, unlike the United States where it's all just dot com, there's a big notion of cross border buying as well. For example, if I'm in Italy and I'm buying in Germany, I will have people that are buying in the amazon. de instead of Italy. And so there's more of a notion of cross border buying instead of just maybe in that central marketplace that you're attacking. So there's a lot of different components. If people had to choose, you're putting, I'm assuming, listings in one area or all areas to make sure that they're capturing every sort of customer, if that makes sense. Or is there one major one where you can probably capture, if I'm in Germany, I will capture an Italian share. I will capture a Portuguese share. I will capture a Spain share. Anything of that notion that you're seeing with data, or that can back up in that regard?
Stef van Boekel: So basically, especially if the client is not really familiar with your brand or the platform where you're buying, it's all about trustability. When a client in the Netherlands sees the product is not coming from the Netherlands, it's coming from Germany or even further, the chance that they're going to buy at the platform home is quite minimum. So the idea is always to focus on the local clients. So the domain doesn't have to be that domain, but at least you want to show there's local customer support in their own language, and they preferably also a local return address, because people are going to judge you on that. If they're able when they buy it, they can buy it but are they also able to return it, for example. So surely, there is some cross border sales happening. Also, actually there is a lot of cross border sales happening. But does the end user actually know he's buying something outsides own country? I think most cases they don't really know. And that's also because it's presented like that. If the client would do research, then surely they're going to find out. But often, it's an emotional buy. They don't check it. But then, if you want to close the quick one, the quick decision, it's focused on giving the client peace that they're buying it from a local shop.
Ryan Cramer: Absolutely. Well, and that's, especially in a notion where we saw even the data of returns, especially this time of year, lots of different brands are seeing a spike in billions of dollars across the industry, billions of dollars in returns. It's actually more cost effective, I'm assuming in Europe. Is there a strategy for returns that maybe not apply to other marketplaces? For example, you said it's cost prohibitive to keep going to different marketplaces or different countries across the border, just because of the natural costs associated with it. Is there a notion which more Europeans are... And again, I'm not there and I'm not living in it. Maybe this is a notion you could see firsthand. Is there a lot cognizance, in terms of returns, or just keep it and not have to resend it because of the-
Stef van Boekel: No, actually, depends a lot per country. For example, if you look at the Netherlands, the Netherlands is one of the most highest customer... It's all about customer service. So in the Netherlands, you've been expecting next day delivery already for, I don't know, minimum five years or maybe even longer while Amazon introduced it here in. So, for example, in Italy. So it depends per country on what they expect. So if they see a web shop where the customer service is bad, meaning that you have to wait several weeks before you get the money back or it's complex delivery, in general, they don't really buy there. But the companies that have a really high customer service level. So for example, inaudible, they are the one that are able to attract the majority of the sales. But also, inaudible overseas, also kind the clothing industry, you have a lot of returns. So I think it varies per country how the client is behaving, simply how they've been educated what to expect, from a service level point of view. If you look at the owner of the web shop, obviously when he's selling cross border, the cost is much higher. Not only the return cost, but also the time of actually receiving the parcels back. It's often shipped to different trucks. So the quality of the cards are worse. So I think from that perspective, the cost versus in America are going to be much higher.
Ryan Cramer: Well, and that's something to consider because of just the cost in general of those marketplaces into your bottom line, like you said. That actually, if I'm hearing that, is that opportunity for optimization or is that should I be afraid of knowing that going into the marketplace? That this is going to be part of business on an everyday transaction, that there's going to be maybe a higher return rate or higher cost when it comes to that regards. And margins might take a little bit of a hit so we need to either sell higher or figure out a little bit more of a different product to be putting in. So maybe those are the higher margin products that I put into Europe instead.
Stef van Boekel: I think, in general, it's always case by case. So if you have a product that has a high return ratio, you're going to have that same experience everywhere. And then again, if I'm understanding you correct, yeah, you need to calculate it, like everything, all the other additional variable costs that you maybe don't have in your local market. You need to calculate because I'm talking a lot about Americans going to Europe, but also for what people... A lot of people actually think is that okay, you are in Europe. So for example, when I meet somebody in America and they say," Where you from in the Netherlands?" Then they think that I'm visiting Paris in the weekend because it's just a four hour drive.
Ryan Cramer: So easy.
Stef van Boekel: But basically, that maybe happens once in a few years. So a lot of the local, let's say the European companies, when they go cross- border, it's actually almost... I don't want to say it's the same step as an American goes across the ocean, but it's still a big step to be taken. And often, the step they are taking is just saying, okay, I'm in Netherlands so I go to Germany. Or if I'm in Germany, I go to France. So you always go to your neighbor countries. But actually the are just a few that really look at the market on a European level.
Ryan Cramer: So what about crosstalk-
Stef van Boekel: And that, I believe, actually is the opportunity also for the European market, to do not consider the country next to you, but focus more on Europe in total. And once you're actually are live in all the countries, then actually focus your area, focus on the area, the country, where you have the majority of the profits
Ryan Cramer: Is there, with Amazon. How, because as of United States as its own essential market, obviously. Is Amazon looking cross- border more closely, in terms of pricing or optimization for shipping logistics? Is there a way to, if I'm a brand, to kind of tie into that notion? If they're saying, Hey, it's cheaper and actually more efficient, instead of buying from Italy, maybe if somehow buying from Germany is actually more efficient and cost effective. Maybe I ship it and, or you want to buy it from that marketplace. Is there a notion, or is there a proven track record that Amazon is working in that capability? Or is that still somewhat unknown, or is that a notion to not even worry about?
Stef van Boekel: I know, I mean, basically on Amazon, you have your 1P and your 3P. As a 1P, Amazon is the selling party and they then decide. They then the invoice partner to the consumer. So they then decide what is the selling price of that product in that country. Amazon constantly checks what is the local price. And I know that when the market price in Italy is, for example, lower and the operational costs are higher, the product based ranking will go down. So obviously, their system constantly are checking what is the best price to sell per product per country. For sellers, it's the same. I hear so often that I ask for pricing and then they said,"Yeah, the pricing is 35 euros for all Europe." And then I just say," Okay, well, let's say, okay, we have a 35 Euro in the middle. What's the minimum, the max, and then we can start playing around on country level." And then you're going to recognize that in certain countries, you need to sell a bit more expensive or more higher, simply because the competition is different or the demand is different. So also, what you need to keep in mind, for example, Amazon, if you want to sell in a country, you need to... So for example, if I store goods in Germany and ship to Germany, I need to have a German VET number. From the moment Amazon was offering FBA, so that means you can ship it and you ship it to the Amazon warehouses when you have an importer but at least let's say you have to stock in Germany, and then you can start shipping it also to Italy. So the client in Italy, sale goes to amazon. it, but actually the product is shipped from Germany to Italy. The delivery time is a little bit longer. You pay a little bit more, but it's quite a doable operation to set up. But once you reach a certain revenue level, for example, I think in Italy it's 35, 000 Euro, you also have to need a local VET number. That means that you need to have a Italian VET number. From that moment on, once you have that, you can also start storing your goods in Italy. When you store your goods in Italy and ship it to an Italian customers, you can imagine that also the logistical cost goes down. So on that way, you can start looking at on a European level. But at the end, you're going to probably end up, at least if you do some good business, to storing your products locally and also having a more efficient, lower price towards that consumer.
Ryan Cramer: Absolutely. Is that the pay-
Stef van Boekel: Well, so that answers your question.
Ryan Cramer: Yeah. I was going to say, that sounds like the Pan- European program. Is that correct, what you were describing there?
Stef van Boekel: Indeed, that's what I'm describing.
Ryan Cramer: Yeah, okay. So yeah, for listeners out there, if you're listening to Stef, it's essentially a program that you have to either be accepted into, I believe still, with the notion that put in one facility, Amazon will market as a Prime labeled product. But like you said before, taking it from journeying and delivering it to Italy, it might be a couple days delayed, but essentially it is marked as that in that operation too. There's a North American remote fulfillment program as well. Very similar concept. If you have goods in FBA in the United States, you can distribute to Canada or Mexico as well, so crosstalk-
Stef van Boekel: Keep in mind, I mean, the pan- European business is a good business, I mean, to use the Amazon fulfillment business.
Ryan Cramer: Sure.
Stef van Boekel: But Amazon doesn't take import risk. So if you are non European company, that means you need to have an import of records. Import of records has 10 years product liability. So if you do not have a local hub in Europe, that means you would never be able to use the Amazon system because you cannot ship direct Amazon without having a local hub first that receives the good. So once you have that first base set up, then it's a good step to start working on a European level. But you need to make first step of actually opening up a company in any of the European in countries.
Ryan Cramer: Right. And there's companies like that too. That's not something that you handle directly, is it?
Stef van Boekel: Yeah, we handle that also. It's for me, it is necessary to... I prefer to have everything in control, so yeah, that's also something we organize.
Ryan Cramer: So that's a curious fact, that you have to have 10 years of liability on that. What does that mean to a seller? What does that look like of why is that important?
Stef van Boekel: Well, basically, you have product responsibility. So if your product, for some reason, is not compliant with local law and somebody goes to the lawsuit, you are responsible. So you need to have an importer that says, I will take that product liability. So that's something you cannot avoid, obviously, because you want that is for European way to protect themself of goods that are not good for the consumer.
Ryan Cramer: Absolutely. I mean, that's very important to know too, because working with a good importer of record, very, very important in that regards to make sure your business doesn't get attacked or anything of that sort. Again, or even come into just a notion of liability, you want to protect your business and all those assets as well.
Stef van Boekel: Yeah. So what we normally do, to give you bit of an insight, or for your listeners to think how they should do it, so there are local laws. So Europe was seen as a big country, but obviously it's not German laws are different than Danish or Polish or Dutch. So you need to make sure that your products are compliant against local demands. So if you receive your product label, for example, needs to be in the local language. So what we, for example, do is we receive it often just with the English label, and then we ship it to German. We just put the German label on it, but you first obviously have to check if the ingredients actually is able to be sold in that country. So what normally is you want to do check, you want to start checking what the local laws are to make sure your products are compliant. And then you go to Amazon to see what their rules are to start selling products in that specific product category. And once you have that all set up, then it's going to... Yeah, then you at least are okay. But then I can recommend product liability insurance, and then they're going to check if there's a way to insure yourself against issues. Because what you want to avoid is... Some people have trend products. And so basically, you launch new products and then you go to the next trend that happens obviously. But people, if they're still using your product after five years and you forgot about it and something goes wrong, somebody swallows it and there is a certain whatever can happen, then you're going to be liable. And then we not talking about small fines, you're talking about major, major fines. So that's definitely important to make sure you control that part, because otherwise on the long term you're screwed.
Ryan Cramer: Yeah, for a light term. Does that make the decision of which products to put into those marketplaces a little bit easier and more defined of, Hey, because of certain complexities, whether it be laws or whether it be certain notions of each of these marketplaces, maybe not the smartest idea to enter my electronics brand into Germany? Or is there a topic kind of definition that makes it a little bit easier or more difficult to find success there?
Stef van Boekel: I think, in general, it's the majority of products that can be sold, for example in America, can also be sold in Europe. But to give you an example, a really unique example, but it gives a bit of an idea of which direction it can go. We had a company that was selling Manuka honey. So it was a company from New Zealand and they were pretty successful on amazon. com. And then we said, okay, we were interested in distributing your product in Europe and then we start doing research. But then we realized honey is the only product that's being produced by an insect. So no other product is being produced literally by an insect.
Ryan Cramer: Yeah.
Stef van Boekel: So you come in a product segment that almost no logistical... Because you need to be able to also ship it in a container and in a container you need to fall within a sort of product security. And if you're in a certain product code, as what they call it, that nobody knows nobody is... Even though if you just explain this honey, they say," Well, we are not going to do it. We don't know that product code. We don't have any experience." So then you had just... We could organize the import. We could organize the liability risk, but we were unable to find a company that was willing to put it on their boat. At the end, we were able to find it. We have a very good partner when it comes to that part inaudible. But then we came to the next part, is then you go to storage and then your warehouse also needs to be on a certain certificate. And then getting the certificate was not that complex, but that certificate means that three times per year, somebody can come in your warehouse to check if you're still storage saying the product for that according their requirements. So it's just per category, a bit different on the things you need to be focused on. But if you are specialized in a certain category, you are often already bit familiar what to expect. That specific case with honey, obviously, I never been able to think about what can happen. But that's, let's say, a learning curve also for us.
Ryan Cramer: Well, every product's so unique and different, like you said, even just the storage functionality of, if it's sitting in a warehouse, whether a capabilities of, if it's a product of long term cold storage or something of the sort, then that's not capable in those marketplaces. You have to really do the research and kind of really think it through in that regards. Because like you said, in dot com makes a little bit easier notion to figure that out. Maybe not so much in Germany or Italy or whatever that may be.
Stef van Boekel: No, but that, for example, that specific product was in inaudible more complex than, for example, in the UK. Or we have also cleaning material that is in the UK more easy than versus, for example, in Germany. So it's there's always some local laws you need to at least check a bit. But I'm talking a lot about the complexity of the market, but it's-
Ryan Cramer: Right, where's the opportunity, Stef? I'm hearing problems. Where are we overcoming?
Stef van Boekel: I believe that the company only has a few to when they think about the international way. And yes, it's complex to set up the operation, but once you have the operation set, you have the largest eCommerce market. I mean the largest versus America, we are double of online users, but also the average spending per user is higher because simply the salaries are a bit different than the US. And also people are more common to, depends per country, to buy and online. So it's a massive opportunity from market size opportunity. But also, like I said, I've been doing this for 10 years, right? So obviously, for me, it's like, okay, I've been doing it for so many companies setting that up so I know what to do. But what I saw is for the companies that actually do it, they are always successful. Maybe more in one country that the other. That's fine. But basically, there's always a market in a country. So for example, if a product would not work in America, you have an issue. But in Europe, Amazon is active in eight countries and they launch new countries a lot. So you have the opportunity to exploit a lot of markets for products that maybe didn't sell in America, but maybe going to sell better inside Europe. So what's happening is that when you have different trends on a country level, that means that your business in general is experienced trends but from different countries so it creates a sort of stability. So the market size good. The type of clients are good. The spreading of the risk is good. But I think what one of the most important things is for people to understand is that, like I told in the beginning of and in the middle of this meeting, is that it's not that a Netherlands company always thinking on European level, right? So there is a lot that are a lot of marked opportunities. If you are a market leader in Germany, you're not a market leader in France, you're in Italy, you're in Spain. So a lot of local, small market leaders, and often those companies don't think international. They have less resources. So for the companies that actually start looking at it on a European level, you see that they're able to get strong positions on every country level, basically because they gain reviews, they get more resources, they improve the product because of the more resources. So I think that is a massive of opportunity. So also, to give you a little bit more insight on that part, so we work for a lot of big companies, like multibillion companies, multibillion brands. And I also talk to them about you need to go on a European level, but the majority of those multinationals actually never work on a European level. So that's weird, obviously. I mean, it's one company, but what happens is that every country has a local sales office and a local sales office has focus on what kind of revenue goes to my local office and how can I get commission out of that? So they're often blocking concepts or solution opportunities like Amazon because then you are opening up the market for the cross border sales. So when the headquarters is gathering a lot of pushback from the local sales offices not to work with that country or that country, that country, often decisions are being move further. But especially the big companies say," Let's talk in six months, let's talk in a year." But when I see that a product category is being launched, that gives a big opportunity. So even though there are a lot of big companies, also as a small company you're able to get a lot of markets, simply because the big companies are just not value there. And that I think in America is totally different because they don't have that issue like we have. Obviously, you have states but there's not that in every state is an own Amazon. So you can imagine in the scenario, if that was the case, what kind of issues it would bring. Well, that issues do we have. So once you have avoided that part, let's you say you have an open market to really gain big business. So if you do good business in America, you should be able to do the same business in Europe or even more.
Ryan Cramer: Yeah. You've painted such a bigger picture, which I think a lot of people just take for granted, of looking at separate marketplaces. Which again, it makes sense to have a different marketplace strategy, but looking at the opportunity as a whole. Europe, twice as many people collectively as the United States, not just as one entity, but as a collective whole. And I even think on your website, when I was looking through it, just the twice of buying power, people who are shopping online that are very customized to online in your reaching, and more marketplaces, more people, which again, more buying power. So as an approach, it makes a lot more sense to think of as a entering Amazon Europe instead of Amazon Germany in those regards. So if I'm looking at this, Stef, and I'm like," Where do I start? What's the process of? Where do I even begin my expansion going into Europe for the first time?" What are some tips or a couple tips that you can maybe suggest for people just to start out and get going?
Stef van Boekel: So the three ways to get started. One way is you're going to hire a project manager. That project manager needs to start looking for the local partners. So who are the main partners? One, you need compliance, you need company's going to support you with the import. Then you need a company for multilingual customer support. Then you need a marketing agency and you need a warehouse. And that normally, such warehouses have often contracts with logistical companies. So through that warehouse, you can also often get good contacts with that logistic company. The good thing is that it all, let's say bigger companies, that are doing Amazon but often not specialized. So you need to really be careful if they understand Amazon. Because also Amazon, for any size of company, it's not a side project because of the complex and changing rules, the system, how it works, you need to have really trained people focusing on Amazon. So that's going to be a crucial part. So if you're going to start looking forward to part logistical warehouses, really make sure they have a dedicated Amazon space with people that don't do anything else than Amazon. Because otherwise, you're going to get chargebacks. And believe me, the warehouse is not going to pay you for the chargebacks. So it's a process that will take you minimum six months to get it organized, to understand the contracts, but then you have local partners to work with.
Ryan Cramer: Gotcha.
Stef van Boekel: The second solution is that you're going to set up an internal team. But that is a very costly operation that I can only recommend for the big, big companies, because like I said, you need a German for the German market, but probably Germany is not directly a full- time position and you're not able to recruit someone part- time. So if you're a big company, then you can make such decisions to invest in the long term. Then you are able to hire a digital marketer, customer support, and a financial controller for managing the complete operation. The investments obviously are very, very high, and it's going to take you a year before the recruitment process is done and before you are a little bit open and running on a design level. And the third solution is you can work with us. We offer inaudible Amazon infrastructure as a service. So basically, we manage it end- to- end, our operation is designed for Amazon.
Ryan Cramer: That's a nice little dovetail into that. So, if people are inaudible option number three, door number three, Stef, what is the best way to figure out more about Marketplace Distri or yourself and get more information?
Stef van Boekel: Well, I think the companies that need to... If companies are... The companies that should look at us are companies that want to accelerate in Amazon on a European level. So always on a European level. So basically, you need to have a winning product that you want to start accelerating without investing in your own infrastructure. So because we have our infrastructure completely designed for Amazon, we do our own import, all everything. We can actually pick up the goods in your warehouse in China or America, wherever it is, and we can be up and running, having actually the first sales in the second month already instead of six months to a year. We are a company that in case you have, for example, a catalog of 20 products, you're talking about maybe two and a half, 3000 Euro per month for the inaudible business. So we always say for the price of a half FTE, you get a designed infrastructure of 25 people working every day on developing your business. If you want to really scale rapidly without any inaudible the quickest way to do this, but also cost effective, obviously because we are working quite efficient. We have a catalog of managing 300,000 of products. We know how it is to, let's say, work with volumes and set up processes that work. So we are the European accelerator that is a complete design with Amazon. So that are the clients that want to, should work with us, that they want to make quick decisions, quick scaling. Then we are the right partner.
Ryan Cramer: That's amazing. Well, congratulations on success. 300, 000 ASINs that you're managing, it is not a small feat. So, if you're seeing success in those marketplaces, again, opportunity at scale makes a lot of sense for a lot of brands who are looking to take that next step level but in the measured approach. So if they're going to try to get out in touch with you, is it email? Is it through website? What is that way?
Stef van Boekel: Yeah. Well, the website is www.marketplacedistri. com. They can also reach out to my LinkedIn profile that you also shared in this post. And so, basically, what normally happens is that we look at the catalog and then we come back, often within a few days, with a plan of approach with the estimated cost. And then the client has a really good end- to- end idea of what to expect, what their responsibility is, and when we should be up and running against base cost.
Ryan Cramer: Amazing. Well, thank you so much, Stef, for hopping on today. Just talking a little bit about just the opportunity in Europe as a whole, obviously marketplace to marketplace a little bit more different, on Amazon, on different marketplaces that are not Amazon. Because there's a lot out there that we've talked about on the show before, but just shedding light on that opportunity in 2022, makes a lot of sense, I think for a lot of listeners who are taking that next level approach for their brand. So thank you so much for hopping on today in Crossover Commerce, now friend of the show. So always-
Stef van Boekel: I appreciate it. Thank you. Thank you very much, Ryan. And again, I really want to point out that I think the biggest opportunity really is Amazon Europe. You see, for example, a lot of aggregators also really buying up all those brands focus on the American brand. But I think, because of the complexity of the market, that's actually the large opportunity. So once you control that, then you are in a much stronger position because also your competitors are unable to just copy paste your operation. So look at it as, I think, the biggest opportunity when you already are successful on amazon. com, then I think Europe is the next step to really scale. You don't have to invest in your products. It's just working with good partners and get started. And then on the long term, you're going to be very happy, and with a bit of luck also can come sometimes to Tuscany. Enjoying the sun and the wine in the meanwhile.
Ryan Cramer: I have a trip that's on hold right now for 10 days in Italy, so-
Stef van Boekel: Oh, nice.
Ryan Cramer: I'll have to take you up on that. It's supposed to happen so soon enough I'll be over there for sure. But hey, I-
Stef van Boekel: Good.
Ryan Cramer: Yeah, exactly. Well, we'll make sure, I have to touch base when that happens. But hey, thank you so much, Stef, for hopping on today on Crossover Commerce, now friend of the show. As always, welcome back, anytime you wanted to talk, you're welcome back in this corner. So thank you so much for hopping on today.
Stef van Boekel: Sure. Thanks, Ryan.
Ryan Cramer: Oh, I'm going to unmute myself. But thank you very much everyone else for coming on episode 212 of Crossover Commerce. This is my corner of the internet, where I bring the best and brightest in Amazon e-commerce space. We talked Amazon Europe, so many great opportunities. Think about it at scale. Think about your brand entering a marketplace, not just on country to country level, but it's going to be holistic picture. And in businesses like that, they've done it for a long time, like Marketplace Distri, they're going to be doing and helping your brand grow to a significant level of opportunity, growth, and what that valuation looks like for your business. If you choose to grow it or even it just trying to build a DOW for you, your business, reaching those markets and those different places all around the world. Not just your street or your country, and now it's worldwide business and it takes it to a new level. It might be scary first, but there's resources out there that help with that. I'm Ryan Cramer, this is Crossover Commerce. Thanks, everyone. Will catch you guys next time on another episode. Take care.
Ryan Cramer of Crossover Commerce talks with Stef van Boekel of Marketplace Distri one on one, discussing the complexity and opportunity of Amazon in Europe.
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