Global Expansion on Amazon - Importing & Compliance tips⎜ Zee ⎜ EP 190
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 to another episode of Crossover Commerce. I'm your host, Ryan Cramer, and this is what we like to call Crossover Commerce. My corner of the internet, where I bring the best and brightest in the Amazon and e- commerce industry. That can mean anything from marketing, advertising, product listing, sourcing logistics. We cover it all here in my corner of the internet. And if you're playing it at home, yesterday we were joking of how many times I say corner of the internet, but we're not going to do that today. This is a fun experience that we get to chat with people who are leaders in the Amazon and e- commerce space, so that we can help you apply that knowledge to your business today, and you can help elevate your business as you continue to grow that entrepreneurial journey. Whether it be domestically different marketplaces, different channels, or just grow internationally, that's what we're all about. And speaking about growing internationally, want to give a quick shout- out to our presenting sponsor, PingPong Payments. PingPong Payments is helping sellers and entrepreneurs grow and save more time, money and effort by sending and receiving local currency internationally. What does that mean? That means if you're paying your supplier, your manufacturer, your logistics company anyone in a different currency that is not where you currently are, it's going to be important to save time, money and effort. That way you can get your goods on the water, or you can save some fees instead of paying the international conversion fees or anything like that. Depending on where you are, you can also receive foreign currency as well, depending on what marketplace you might be selling in. It's easy to do. Just sign up for free with PingPong Payments. Just go to usa. pingpongx. com/ podcast in order to see and sign up for free with a PingPong account today. And also, you can see all of our past episodes, all 189, including today will be on there as well. So if you missed an episode, go and check that out. All the video, the transcription, as well as the audio format will be there as well. But this is a podcast that is live, so if you're tuning in on Facebook, LinkedIn, YouTube, or Twitter, you can go ahead and submit your questions or your comments, or just want to say hi in the comments section where you might be listening. We'll see those on our screen, throw them up there. We would like to be interactive. So if there's something that myself or a guest have said that you may agree with, disagree with, or just want to comment on, feel free to do so and we'll make that an interactive part of our episode today. That being said, this is episode 190. We talk about PingPong being an international focus and what that looks like, but I'm really excited about today because it seems like a long time coming before this company, which I feel like not came out of nowhere, but is really making a real big establishment on the scene. And who's that company? That is Zee. And I'm not just saying the letter Z, it's Z- E-E. Zee is a global expansion company, a logistics company that's helping people grow in their importing and compliance, as well as expanding on Amazon. They offer a complete IOR with import logistics solution, which gives you the opportunity to grow your FBA business. What does that mean for you and what that looks like? We're going to answer all those questions as well, but the person we have on today, just want to give a quick brief overview. His name is Rael Lowenthal, he's the head of business development, and he's going to be talking to us about our title today, global expansion on Amazon and those importing and compliance tips that they have and they've helped their sellers and clients grow on Amazon. So without further ado, want to go ahead and get started right away, firing off those tips and information for our audience. Welcome to Crossover Commerce, Rael of Zee. Rael, nice to have you on Crossover Commerce today.
Rael Lowenthal: Hey, Ryan, how's it going? And yeah, hi to the listeners. It's very exciting to be here. I know this has been quite a long time coming, so just excited to be here and love to talk about Amazon e- commerce and all things global expansion.
Ryan Cramer: Well, before we get started, and we want to jump in right away, let's give a quick minute or two background on yourself. How'd you get to Zee and what's your background and experience always been in? Has it always been in shipping logistics, or is it more, this is where you found, they found the best opportunity right now for you?
Rael Lowenthal: So not at all. I'm an accountant by profession, that's what I studied. I spent three years training at an investment bank, both in South Africa and the UK, and then decided that the, well, the finance wasn't for me. I was looking for something a little bit more in commerce and that's where I found myself at Zee, myself and Mari- Louise, who's our managing director. We kind of formulated the product and built it out. We are a part of a larger group of companies called the VAT IT Group, which has been around for about 25 years. And using their global infrastructure, we developed the import, our record business. That's a part of the group's been around for about 10 years. We focused on various industries and now e- commerce being one of them. And it's a very exciting space, I think. We had the precipice of global expansion in e- commerce. I think people, obviously through COVID e- commerce sort of blown up, but it's been on an upward trend for the last 10 years. And now, through platforms like Amazon, Walmart, eBay, sellers have the opportunity to sell their profitable products, not only in their local market, but all over the world. And yeah, just, that's a little bit of background about me, but nothing to do with logistics or import compliance, just regular accountant, did a little bit of training in an investment bank and now this is where I find myself.
Ryan Cramer: Well, you were talking, pretty sure that you have so much going on too. You're also doing, you're doing exams, or what was the other thing you had going on? You had some other bar regulations. Are you becoming a lawyer or what was that crosstalk?
Rael Lowenthal: It's all in the journey of becoming an accountant.
Ryan Cramer: No, it's just more testing. I feel like everyone in finance or accounting is always, they always have a test that they have to take, whether it be in college or outside, there's always constant learning. So, but that's the nature of the business. You always have to stay up to date, numbers and obviously in accounting, what works and what you can do and can't do. But I just kind of want to break down really quickly. For people who are listening to us, maybe brand new to Amazon e- commerce have, or maybe going to start this journey here in 2022, what is the... Or maybe expanding internationally? I think this will apply to that as well. What's the definition of import, or the import of record or the, what you were talk talking about earlier about the title of what you guys do? Why is that important and people need to know what that is?
Rael Lowenthal: Yeah, so look. I think maybe a step back just on us, a little bit about what we are, and then I'll get into that.
Ryan Cramer: Let's do that.
Rael Lowenthal: We are an importer of record specialist for e- commerce sellers. We focus on Amazon FBA, but we will assist clients who sell on Shopify, eBay, Walmart. We will look at everything, but our really our main focus is Amazon. And an importer of record is essentially a local business in a destination country that gets listed on the import documentation on behalf of a foreign importer to make sure that the goods clear customs successfully. We take on the responsibility for paying over any duties and taxes, as well as being liable for those duties and taxes with the local customs office. Part of the service involves product compliance and logistics and various other aspects that we'll get into at a later stage. But how importer of record really applies to the Amazon world or to the e- commerce world, as sellers will know, they remain the owner of their inventory from the time it leaves their warehouse, either from their supplier or from their home country. All the way until it arrives to their new target destination. It arrives at customs. And now they're a foreign importer in a new country. And in order for a foreign importer to be able to successfully import into a local country, they need a local office with an address, with a physical presence, with employees, really a local infrastructure to be listed on the import documentation, to take on the custom's responsibility and liability of the import. Once that's taken place, the goods can clear custom successfully and then move on to the destination country performance center. And how that applies to Amazon really is, Amazon have categorically stated that they will never take on custom's responsibility on behalf of their sellers, both their sellers and vendors, actually. So even when they're purchasing goods from suppliers, they won't be listed on the import documentation. So, we sort of allow e- commerce sellers to leverage of our global infrastructure to make sure that we can help them successfully get their inventory into the target destination country.
Ryan Cramer: So it sounds like there's a lot of responsibility that for anyone in your position that you would have to be representative of that individual or that business entity when it comes into a different market. Is it as simple as that, of like, you're just being representative of them and let them operate, but you have to also make sure that they're not doing the incorrect thing too, you almost have to baby proof the way to helping them be successful? Is that, how do you guys do that in that regards to make them be successful in that regards, without you taking the brunt of it or them not damaging Zee in that regards? Does that make sense?
Rael Lowenthal: Yeah, absolutely. So, there's a reason why no one, or not a lot of companies in the world like Amazon or freight forwarders want to take on the risk of being an importer of record. There is quite a lot of risks involved. We've built an incredible infrastructure and technology to mitigate that risk as far as possible. And then, and you're right. It's part of that process is getting our clients fully compliant with the country that they're looking to get to. And so, if we look at the main sort of area is liability for duties and taxes. So how do we help in that regard? We classify the clients' products according to the appropriate HS code. So we can forecast accurately what the duties and taxes that will be payable in that destination country. We also have an intellectual property base of what value the goods need to be declared to at customs. Because again, that has a huge impact on what the duties and taxes will be. And then the third thing really is making sure that the client's products, the actual products that they're looking to sell are both compliant to sell and to import. Those two are two separate things. You can have a product that's compliant to import, but not compliant to sell. And obviously in the e- commerce world, that first needs to be compliant to sell before it actually needs to be compliant to import. And that's really a service that we can provide to our clients.
Ryan Cramer: Is that something that is so unique on a product by product or case- by- case basis of, if sellers don't know what that might be, it actually can stop you from even selling in that country altogether, right? Like if I'm selling, for example, supplements, which is a very competitive and very, I would say, not saturated, but very competitive market. There's different regulations that you have to have compliant with that product from the UK, versus the EU, versus United States, versus Canda, versus Australia. So you as a company have to almost help facilitate, " Yes, you can get in here with these documents. No, you can not because of you haven't filled out or complied with X, Y, Z." Is that something that's dizzying for you as a company to kind of make sure that every single marketplace, every single country that you would help people break into, that you would have to almost go category by category, case by case basis of yes, no, yes, no, and go from there. Does that make sense as well?
Rael Lowenthal: Yeah, look, I think one of the biggest obstacles for sellers before they want to start going global is sort of two things. One is product compliance and the other is tax compliance, and we'll get there in a moment. But what I love about this space is, and I'm not sure if you know this, but Amazon sell 45 million different SKUs globally. So for the entire life of Zee, we will see a new product we've never shipped before. Now, that's not a problem for us. It's actually something that excites us. We've built an amazing product compliance team that focuses on different product categories, as you mentioned. And the truth is, we will assist the seller in getting their products compliant. Depending on your product type, that will sort of determine the time period in which it takes to get your products compliant. And then obviously, depending on what documents you do have and what certifications you've gone through. But in the end, our team is our experts on the subject. And we really can assist sellers in getting it complete. Yes, every product category, every product type is different. And then when it goes to a different country, it's different. So, generally we like to focus on one country at a time. It's sort of the natural progression of growth. You've got a successful product in your local market. And really, if you want to start growing your business, it's about either sourcing new products to sell in your existing markets, or take your existing products that you know well and getting them into new markets. And both have their challenges, but with Zee we really try and make that as simple as possible through product compliance, through logistics, and then obviously the import compliance and the import responsibility.
Ryan Cramer: Gotcha. So if I'm an Amazon seller and I'm just selling the U. S. marketplace, for example, let's start from the beginning and kind of work from there. We're talking about today global expansion on Amazon and reporting compliance inaudible Zee. If you're listening to us, if you have questions, go ahead and submit them in the comments section on social media. If you're listening to us later on, you can also just ask in the show notes, we'll make sure we get those questions answered. So, Rael, I'm curious, when I take that next step and look internationally and I'm not sure really, what's that first conversation like with a company like yourself? Is it you're looking at marketplace first or do you have to, like we had mentioned earlier, look at product, you're funneling people into opportunity, where does that first conversation happen between myself as a Amazon seller and you as an importer of record?
Rael Lowenthal: So I think it depends at what stage of life your Amazon business is. So, if we take a seller that's only selling in the local market, let's say they're a U. S. seller, obviously the USA being the largest retail consumer market in the world. There's a huge opportunity there, and if you're based there, if you get it right, you'll be really successful. Once your products are successful there, the next sort of step is, right, where can I go next? And that really depends on product type and the destination of the seller. So naturally if you're a U. S. seller, you're selling products in English. The next biggest Amazon marketplace in the world is the UK. And that's really where we would look to send sellers first. It's the simplest because there's no translation of listings. There's no different language. The cultures, although very different from a consumer perspective are quite similar. And then, from there the natural progression from the UK is the EU. And then, the sort of more difficult markets to get into, the Japanese market is one of them that interests people a lot, Australia being a relatively new market. And I think for U. S. sellers specifically, Amazon ran a program called North American Remote Fulfillment, which essentially allows Amazon to fulfill orders in Canada and New Mexico from the U. S. But the one thing that you can't get as a seller is access to prime members. Because Amazon can't guarantee next day delivery in Canada if they're filling the order from the U. S. And-
Ryan Cramer: That'll be expensive.
Rael Lowenthal: It's expensive. And prime members are the largest spenders on the platform by miles. And what we can do is we can get you into Canada, for example, direct FBA, and then you can get access to Amazon's prime members and you don't pay the high fulfillment fees. So I think that answers your question. But again, it really does depend on the nature of the seller, the type of product, and where they're looking to go.
Ryan Cramer: Because all these offshoots, that's what I think, do you find that a lot of people are just scared to make that next step? And I say scared. It's confusing. I would say confusing because of almost you start from the Genesis point of every, almost every seller knows, or is 99.7% going to probably be starting in the U. S. market, . com. From there everyone always answers this way. It depends, and that's where it's confusing for people I guess, depends on the product, depends on the category, depends on where you want to go. What's your cost? What's your risk tolerance, all those other things? And a lot of the times I feel like that is the barrier of which that's so high that people don't want to overcome, but it's with education and the likes of a company like a Zee to help you understand, " Hey, listen, it's actually more simple than this." It's just a couple more documentations, a couple more tests, making sure that you have this paperwork. And what are the other things when you have those conversation with people that maybe help them kind of coax them along and say, " Listen, it's not as bad as you might think." We're going to be the light that's going to show you the way basically through the fog or through the darkness that they might think is in front of them.
Rael Lowenthal: Yes, I think the best example I have of this to give you is Scott Needham. He's a partner of PingPongs. He's a top 100 Amazon seller. They sell, Buyboxer sell over 100,000 different SKUs, incredibly successful business in the U.S. And incredibly experienced sellers on Amazon, but rarely didn't like or didn't want to go global because there was just so much red tape and a lot of hoops to jump through. And a lot of confusion, a lot of people telling them a lot of different things. And I reached out to Scott back in April. We had a discussion around what would be the best sort of target destination, where were they looking to go? They sell various brands. Australia was their first target. And within about three weeks we had their first shipment delivered successfully to a performance center in Australia. And now we've taken the same brand into Mexico as well. So I think, you can be the most experienced Amazon seller in the world, but going global, because it's not something that you're familiar with can be scary. And it is complex. There are a lot of hoops, but we've made that our business. We've made it our mission to understand it and know it. And when you come to us, we will basically make you feel that going global is almost like going local. So yeah, in terms of what are people the most scared of? I'd say, or the sellers, what are they most afraid of? It really is the product compliance as a first point and then the tax compliance. For U. S. sellers, generally the first place they like to look at is the UK or the EU and the VAT system that works in the EU and the UK is very different to how it works in the USA. So that generally tends to be the first thing that they kind of not, they don't want to get involved with it, it's too complex, it's another government, I don't want to be there. But again, we can help guide them through that process.
Ryan Cramer: So with that regards, I also want to make the distinction too, because I hear the term's kind of be used interchangeably, freight forwarder versus importer of record. Two very similar, I would say very similar lights of helping people get goods into a different country. What's the difference? I want to make sure we have this clear and concise for people who are out there and say, " Oh no, I work with a freight forwarder, so I don't need to work with an importer of record." What would be the natural distinction between the two?
Rael Lowenthal: So I think for the benefit of the audience, I think in any international transaction, so wherever you're trying to get goods from one country to another where you are not based, there are three, essentially three parties that you're going to interact with. The first is a freight forwarder, and a freight forwarder's responsibility is to pick up the goods from wherever they got to leave from, put them on a plane, put them on a ship, get them to the destination country and then make the final delivery to the fulfillment center, to where the goods need to go. The second party that you're going to interact with is a customs broker. A customs broker is the agent in the destination country that has the direct relationship with the customs office. So you as a seller, you can't interact, you can't contact the customs office yourself. You've got to go through a customs broker who will submit your import documentation and essentially pay the duties and taxes directly to customs, just to simplify the process. And then the third party that you're going to speak to as an importer of record. And that's really our specialty, which is a local office in that destination country that gets listed on your import documentation, takes responsibility for the import with the local customs office and makes sure that the goods clear custom successfully. It doesn't end there. Part of our service is to prepare the seller's import documentation for them so that there's no confusion. It's what we call a clearance instruction. So it's a very clear, easily readable instruction that gets given to our customs broker, who we contract with ourselves, to make sure that the goods clear customs in the correct and appropriate way. And in countries where VAT is applicable, what's extremely important to sellers is that they are able to reclaim the import VAT that essentially that we have to pay over on their behalf. And a very important part of our service is to prepare the import documentation in a way that facilitates that VAT claim. And I think it's important for sellers to know that are listening to this, we never take physical ownership of your property. You'll always remain the owner of your goods. We act as a third- party agent on your behalf. And then, what's the difference between us and a freight forwarder? We don't specialize, we don't rent spaces on ships or own our own vessels. We, as a value added service to our clients contract with various couriers, the likes of FedEx, DHL, and UPS, and other freight forwarding options to facilitate the international movement of the good, so that we can make it an end- to- end service. So we'll pick the goods from your export country, arrange for the international freight, appoint our independent customs broker to fulfill the clearance. Act as the sellers importer of record and then allow the freight forwarder or courier to make the final delivery to the Amazon facility.
Ryan Cramer: Right, you're almost the top, and your facilitating all these ones underneath that. And that makes sense to me to almost work with somebody who's going to manage all these different systems instead of individually as well. Is that where you see a lot of opportunity as Zee? Because again, I'm thinking through this as a business perspective. If I'm a seller and I don't want to have to deal with three individualized, or maybe even more, if you add onto that, if the processes calls for it, I would rather just handle with one overarching person who's experts in each of those different areas. And I can only have to talk with one versus freight forwarder, importer of record, so on and so forth. And there's more and more and more, it just makes sense that would be the opportunistic way to, as a seller work with one, instead of all these different pieces that are scattered about, does that make sense?
Rael Lowenthal: Absolutely. And I think-
Ryan Cramer: Does it even sell for you, or did I just sell Zee for you?
Rael Lowenthal: Listen, it sells itself. It sells itself. It's a great service. No, and I think it goes one step further than that, Ryan. So, some of the best successes we've had have been with sellers who were able to get their goods into, let's say six or seven different countries, and they had six or seven different suppliers and three different freight forwarders doing all of these different things. And then they found Zee and they have one account manager and an app. So it can be a person or through our technology where that we can assist with the entire global distribution of their inventory, so they can completely simplify their supply chain. And because of the volume of shipments that we're doing on a monthly and annual basis across our importer of record business, we have really discounted rates with our courier partners. And we passed that benefit onto our clients as well. So, they found us, simplified the supply chain, got a saving on their freight and they're selling globally.
Ryan Cramer: Right. So let's talk about, so if I'm an international seller working with Zee, what's 2021 been like in terms of overall company wide? You're seeing probably the same headaches as each individualized consumer, is that more opportunity in terms of just backups? There's nothing you can do if there's just no way to unload cargo at some of these ports and get it from point A to point B. I know that's frustrating for a lot of sellers, especially this time of year. What do you as a company see that as an opportunity or where's the growth come in 2022 for you as a company, helping people navigate those waters and maybe help them get there quicker and help them plan out further?
Rael Lowenthal: Yeah, so I think 2021 has been, it's been sort of two sides of a coin, right? On the one hand you've had this huge growth in e- commerce, where people have realized that it's just a lot simpler and easier to buy their products online. And then you've had massive supply chain backups and issues, all the way from suppliers not being able to... Factories being closed because of COVID, or freight forwarders not being able to load at the ports because the ports are closed. And you've got this huge backup of inventory sitting both in the target country and in the export country. To be honest with you, there's not a lot that can be done to get around it. Everybody is facing the same issues. I think where we come in is, we can facilitate and have the direct contacts with the relevant people in the relevant countries to help clients troubleshoot when there are issues. If you're a container shipper, you're sending containers every so often, you're just in the line like everybody else, trying to find a freight forwarder that will be able to take your container from one place to the next. But I mean, to put things into context for you, there's about 250, 000 containers backlogged at LA port at the moment. There's not a freight forwarder in the world that can do anything about that. So, where we come in is, if you're faced with a backlog of stock that you can't get in, we have nice air freight forwarder options that can help you. It may not be the best form for you, but we can help you get stock there quickly, just to... Having some stock at a low margin is better than having no stock. So I think that's where we've rarely been able to assist our clients. But again, I think it's taken a lot more of inventory planning, lead times being a lot longer. And ultimately the issues that the consumer faces, the ref of it all, because the on charges essentially get pushed onto you and I buying our products off of Amazon.
Ryan Cramer: Absolutely. Well, that to me presents an opportunity of, it's almost like this reestablishment of, do we look at our processes in place, where we're importing from, where we are selling? If we need to have an FBM fulfillment, do we have a third party warehouse? All those things speak to me as an entrepreneur or me as a service provider that says, " Hey, maybe this is something we just take a look at as a business. And maybe we have to take that speedboat approach and ebb and flow with the massive ways that are coming, instead of the freighter approach where some of these businesses, they have just no choice." They're just too large. They can't just change their processes like that and move about. Almost in the entrepreneur space, what I always love, and I'm sure you as a company love too is, in the entrepreneurial world, online sales and marketing. You can stop, or you can resource to have this backup plan if you're smart enough and can build out those processes of maybe have a backup supplier manufacturer if my main factory gets shut down. Or maybe I'll look at sourcing from Europe instead of Asia or so on and so forth, and really have those processes and you start to walk through more of those more detailed and more nuanced approaches that you may not have thought of, instead of, "Oh, I'm just going to search from China because it's cheap. I'm going to source it just in time." So that right before I've run out of inventory, a new shipment's coming in, it's getting replenished, and we're going to be fine and never have to worry about that. Now it's almost this, all right, there's no now more ripples, but with more ripples becomes more tactical interesting, detailed approaches as well. Does that excite you as a company that helps to... Now the piece, this is almost like taking the pieces, like when you were a kindergartner or a primary school kid, and there's only four major pieces of a puzzle and you just put them in and you're like, " Oh, that was easy." Now it's almost the all white pieces that you're like, " Where the hell do I put these?" And it's just going to be a headache and you have to stare at it and there's little nuances to make it all fit together. Is that where you, can you... What were your thoughts around that?
Rael Lowenthal: No, definitely. It definitely sides us. I think, in the business that we're in, complexity is our game. We make very complex processes very simple for our clients. And having somebody on your side while all of these things are going wrong, who really understands this world, I think is invaluable. So, we've had situations with clients who are sourcing their own freight forwarders, trying to do things themselves. They come to us last minute because the freight forwarder told them one thing, and then there's another. And we've really, to put it quite simply come to the rescue in a lot of these situations to say to our clients, " Right, okay. This is what you've got. This is what you still need. This is what we're going to do for you., provide us with this information and we'll get you sorted." So yeah, look, it's required, I think it's the first time probably in history where people would be happier to have their working capital stuck in stock than not. Normally you want to turn your stock into cash as quickly as possible. I think at the moment people want as much cash in stock because that means they can actually sell as opposed to being stuck without it. In terms of the freight forwarding logistics, import compliance, all of that type of thing, if you're having issues with your freight and there's delays, the one thing you definitely don't want is problems at customs. And that's really where we come in to make sure that, " Okay, there might have been a delay of the goods getting there. But once they get there, they're going to clear customs within two days, and then they're going to get delivered to Amazon." I think-
Ryan Cramer: I was going to say, worst case, how long would... Have you seen how long product's been stuck in customs, just because they don't clear because of a certain check mark or because of a certain paperwork? How long are we talking that worst case scenario would be that you've seen?
Rael Lowenthal: So if you've contracted with us before you send your shipment, your goods will clear customs quickly. There are instances where customs offices around the world are, what's the right word? They play by their own rules.
Ryan Cramer: Like sticks in the mud or something like that. Yeah, they kind of like a nudge.
Rael Lowenthal: They play a very important role, right? They want to make sure that whoever's importing into their country is doing it in a compliant way, and they're getting the duties and taxes that are owed to them. We have had instances where shipments do get stuck at customs, not because we didn't prepare the documentation right, but let's say custom stop the shipment, they want to inspect it. That's something that's completely out of our control. What we do deal with a lot of the time is we have clients who send their goods, let's say to the U.S., to Germany, to the UK and the goods get stuck there because they haven't contracted with an importer of record to get their goods cleared through customs. And one of the products that we offer is to actually get stuck shipments cleared, because that's a lot better solution than paying the return leg, the return to shipper of your inventory, you want it through customs. So the times where we deal mostly with stuck shipments is when clients have sent the shipments on their own and the goods are stack because they need an importer, and then we step in and get it cleared.
Ryan Cramer: Makes sense with me. In scenarios where, I'm curious, with inventory, for example, I send a 1, 000 pieces of my product from factory warehouse into, from where it goes through all the way to FBA warehousing. If I lose inventory along the way, I'm working with a company like Zee, who is at fault there? Because traditionally it's the, Amazon if they lose in their warehouse, that's on Amazon. But in that capacity, there happens to be lost inventory or any sort of damaged inventory. Who, is it the freight company, who's at fault there in that specific instance? Just because, I just want to clarify that ecosystem of sometimes it's on the supplier manufacturer, if it's broken prior to obviously shipping. If it's on the freight company for damaged goods or lost goods, if it falls off a boat, there's containers that fall off the boat, like believe it or not. People don't know that it happens. And then obviously getting stuck in customs or anything like that, and might get just lost in, check in a 1,000 and they check out 997 or something like that. Who's at fault in that regards? Does Zee come in any sort of capacity in that regards, step in and help mitigate that stuff?
Rael Lowenthal: So I think it really depends. It's a case- by- case scenario. So obviously we contract with various freight companies to perform the international and local logistics. And a very important part of the process before we'll arrange pickup is we make sure that the client in the warehouse sends us a, everyone's got a smartphone, they send us a picture of the travel document. So either a waybill, or a Master Bill of Lading, and the commercial invoice securely attached to the cargo. As long as we have that, then we know if something goes wrong, generally it's the freight provider where it's gone wrong. So either they've lost a shipment or it's delayed, or it's damaged. Then we have prove to go back to the freight provider and say, " Hey, look, our client, we made sure that our client had everything that they needed." And then they'll obviously do their own internal investigation. And then, generally speaking they'll replace the goods, that's part of their service. They have to have blanket maritime insurance, making sure that the international movement is insured.
Ryan Cramer: That makes sense. And obviously there's great companies out there that help you recuperate those costs and whatnot. So, I just want to make sure, because along the way, again, handing off so many different parts of, they call it logistics because there's so many different cogs in the wheel. It's just like, whenever it hands off to different people, who's at default here. It's not typically the seller in that capacity, but obviously if you're losing pieces of inventory, that's money lost. So we just wanted to make sure, obviously you're an asset in that corner too, to make sure, " Hey, check mark, it's not our fault. It's definitely going to be." All these different pieces of evidence, I would say that are very important to have if something like that happens. And it does happen quite frequently, that's why I bring that up for sellers. Well, in the couple, the few at the back half of this episode that we have with you, I'm curious, as we were looking at opportunities on Amazon. Amazon now has 20 different marketplaces available technically they can sell, and most recent is Egypt. There's been a lot of growth happening, obviously in Europe, in the Middle East, I would say, or like in UAE territory, Saudi Arabia, UAE, as well as Egypt. What a lot of people don't understand is just the cross border nature of how e- commerce happens. And I think you know where I'm going with this is, is that people in China can shop on Japan's amazon. jp, so and so forth. People in Australia are shopping in Japan, visa versa. Is there almost like a hub that you would suggest that people will just say, " Hey, if you're located here in these nice little hubs, if you will, you're going to get audiences from all these different surrounding areas, which means more eyeballs, which means more opportunity and whatnot." How do you help educate people in that cross border selling nature of, " Even though my product might be in one country, you're still might get customers in all these different surrounding countries as well."
Rael Lowenthal: It's a great question. So, and I think this is really how a lot of sellers decide that they want to actually move into a new market. They'll come to me and they say, " Look, I'm selling on Amazon U. S., and I see, every month I'm getting a 100 orders out of Canada and it seems like my product has a market in Canada. I'm going to, I'd like to actually get it there directly. And that's where we come in and we do it. So, the most efficient way of selling your product is by getting it into that country. It's not by getting it into the U.S. and saying, " Okay, from the U.S. someone in Canada will buy it. The best way to get that audience is by getting into that country. And that's really the benefit of using a platform like Amazon. So, I speak to a lot of sellers all the time where they say to me, " Look, I set up a Shopify store. I'm based in the U. S. I set up a Shopify store in the UK. And my margins are probably 15% or 20% high on my Shopify store. But the volume of transactions that I get comes nowhere near what I can get on Amazon. And Amazon have given sellers this incredible opportunity to leverage off their brand. Everybody loves their, because they've made customer service their number one priority. Being an Amazon customer is much better than being an Amazon setback, I can tell you that for sure. But the fact that they've done that has provided this incredible opportunity for sellers using this FBA model. So there's no point in saying, " Look, I want to get my goods to Japan so I can get customers in Australia. That's not the right way to go about it. The right way to go about it is, if I want to get customers in Japan, let me get it to Japan. And if I want to get customers in Australia, I'll get it to Australia. And I'll use a company like Zee to make it really as simple and as easy as possible.
Ryan Cramer: Well, that's such the fascinating model, because if you're paying attention in cross- border payments, which is clearly what we do, the statistics of people shopping internationally in different marketplaces has grown quite significantly. I think Shopify, for example, putting a lot more investment into this globalized dashboard of cross- board selling in general. So translations, you're talking about goods and getting, making sure it gets from point A to point B and working with a company like a Zee in that capacity. But just the nature of the percentage of growth that's happening. I believe of all of Shopify cross- border selling, I would say, was roughly 27 to 30% of their overall business as a company. So that would be, if someone in Canada is buying my goods in the United States Shopify store, if I'm in Australia, again, Japan's buying from you. So that continues to shoot up for direct to consumer stores as well. So it's really a big opportunity. I would say, even moving into 2022, I think the buildup was 2019 to 2020 there was going to be a lot of international growth for sellers as businesses were growing and developed. Obviously with different restrictions and whatnot with the pandemic happened and that kind of throttled lot of the momentum that was going internationally. But what I guess, statistically, are you starting to see a lot more people get more appetite for that growth internationally, compared to years when Zee was just starting? Because I know the company is still evolving, but of recently, is there more appetite to grow internationally, more and more people are like, " You're right. There's more opportunity, that means more profits. That means I can be a global brand instead of just a seller on amazon. com."
Rael Lowenthal: Absolutely. So I think I'm going to deal with two parts of what you said. The first one, about the growth in, let's say a customer in Australia buying off a website in Japan. I think the biggest friction there really is that the customer has to pay the duties and taxes when it gets to their country. And the length of time that it takes to get that product from the one country to the other, because you've got to engage in drop shipping, and that's really not the most efficient way in doing it. It's a nice add-on to your business, definitely, because if you're the seller, of course you want customers from all over the place. But from the customer experience point of view, if you're... You've bought on Amazon before, within a few hours it can arrive at your door. That's really what you're looking for from an e- commerce perspective. You don't want to wait two weeks until you get your product. But again, it's opening up that door is what gives the seller the vision into which countries they're starting to see a lot of demand from. And that's why I said, often I speak to sellers. They say, " Look, I see a lot of orders on my U. S. side, coming from Spain, coming from here. I want to get my products there because I can see there's a market there." So that's the first point. The second point about global growth in e- commerce sales, I think we're really just at the starting point. I think people are really starting to see that the world, it's moving into this kind of digital format or it's a small... It's a big place, but it's a small place. So, and technology and e- commerce has really made that possible. And I guess, sourcing new products, designing new products, that takes a lot of effort and is very difficult. Once you've already gotten to that point, getting that product into a new market is a lot more of an efficient way of growing your business, number one. And number two, I've had conversations with multiple Amazon aggregators. And a lot of sellers, Amazon sellers out there are looking to exit their business at some point. And their preference is lower number of SKUs, more country sales. So again, our product offering can help sellers in getting to the point where they're efficient enough to be bought out.
Ryan Cramer: Right. Well, that was a good data point too. And I know recently because of, I think it was in the article with Marketplace Pulse, and I'm right there with you. I'm constantly having those conversations with people of, they would rather handle small SKUs. And then obviously, if you're having thousands of SKUs, it's harder to dictate which ones to maybe span globally that catalog, it may not be worth putting into certain markets, only certain ones. But it's more of a headache, but if you have a small amount and it's diversified like that, it's a lot more palatable to understand, " Okay, I only have to worry about three products and put it in those different categories instead of thousands of products where it's maybe some go into Canada and some go into Australia, everything's going to EU." It's a lot more of a headache in that regards too, which I found a very fascinating strategy, but it makes sense? Of not everything is going to make sense on a international scale, but it doesn't mean that nothing will. So there's that fine line of it's between zero and a 100% of your products that will exist in international waters and make a good place. So that means said, what's the exciting nature of what Zee's doing, and what's exciting about 2022 moving forward? Is there just opportunity with the likes of aggregators growing internationally. Brands getting recognized as actual brands on Amazon and getting that international feeling and helping people grow in that capacity and making sellers more of a business, not just a, " Hey I'm buying and selling and trading goods online.' What is that exciting nature for the company right now?
Rael Lowenthal: I think the most exciting thing for me is a one- stop shop for making global sales feel local, and doing that powered by technology, so powered by our app. I'd say that's our vision 2022 is really just making global sales feel local, powered through technology, but with a professional, with a trained professional on the other end to hold your hand and make it a simple process. And from all the way from tax compliance to product compliance, to import compliance, and then obviously logistics as well.
Ryan Cramer: Gotcha. No, that's amazing. Is there, what final tip can you tell sellers as we're going into the next year? What is that thing people should really be looking at? Maybe one or two things that now is the time to go internationally or something to get ready. So when they come to you, they're ready to start moving that process of growing internationally?
Rael Lowenthal: I think there's so many tools out there for sellers. I think in e- commerce data is a huge thing. And there's so many tools out there that sellers can use to research the products that they're looking to send into the new market to make sure that there's really a market out there for that particular product, instead of it being kind of like a blind move. So, my advice is, utilize those products. There's products like SmartScout. That's Scott Needham that he's bought that product, he's a seller himself. There's Jungle Scout, there's inaudible, there's various tools out there that can be used to research your product, make sure that you're happy that the market that you're targeting, there really is a market for that product. And then come and see us and we'll really just help you in assessing which markets we think would make sense for your products based on our experience. And then obviously, assisting with the compliance elements and getting the products from the export country, from the supplier, all the way to the fulfillment center, where it's ready to be sold.
Ryan Cramer: Outside of Amazon, is there a marketplace that excites you of the ecosystem? Internationally I would say.
Rael Lowenthal: From an Amazon perspective? I would say-
Ryan Cramer: I would say outside of Amazon, is there a marketplace that you're excited, I'll give a quick run, like Rakuten? Or I'm trying to think of, I'm escaping, or like MercadoLibre? Marketplaces that are of international opportunities. Is there one that excites you and the team at Zee?
Rael Lowenthal: To be honest with you, the one that excites us most is Amazon, I'm not going to lie. I think that-
Ryan Cramer: No, that's fine.
Rael Lowenthal: I think that, yeah, no, no. I think that there are other ones out there definitely. And there might be more localized ones that are more tailored towards that particular country. An example is Cogent in Australia. There's other French ones in France, but I think what a seller wants is simplification. So, doing everything through Seller Central is simplification. Finding one supplier to simplify your supply chain, that's simplification. Focus on getting your products good, focus on improving your margins, focus on trying to get your costs down as much as possible, focus on your PPC. A huge part of 2022 for Amazon sellers is going to be paid advertising on Amazon. I mean, paid advertising on Amazon is starting to get to the level of Google and Instagram and Facebook, it's huge. And sellers are going to have to keep paying for it, so it's something that they need to keep in mind while getting their products onto those platforms. And I'd say the two markets, the countries that excite me the most, I would say probably are Germany, Canada, and UK, and then probably Japan.
Ryan Cramer: I'd agree with that. Sorry, I found myself on mute and I almost started talking on mute. I've told myself, I won't do this, but it is what it is after 190 episodes. No, I would agree with that. I think there's a lot of opportunity in those markets. The ones you mentioned are, I think, outside of Australia in the top three to four, in terms of eyeballs and monthly traffic, Japan continues to surprise me, even though with the amount of volume. And again, I talk about the global market share of different regions in the world. Again, you talk about Singapore and the southeast part of Asia. You talk about Japan in general and their context of China audience, just Middle East, Europe in general, there's so many different opportunities. But I would agree, a lot of people feel like it's all or nothing, but it's not all or nothing. It's be strategic in adding on those percentage points. Canada can maybe add 10% of your yearly revenue or lift, I should say. And all these marketplaces do add up over time. It's not going to maybe be at a one to one ratio. We can certainly help you grow internationally and make your business more profitable and sellable. That's always what, now it feels like it's always, how do we make it profitable and how do we make it sellable? That's what the nature of everything's come down to, now at least in 2021 and moving forward. Rael, I already have taken a lot of your time today, but because you're the man in charge of talking with sellers and we've talked about all the different things that they can do to grow internationally. If I like what I hear, and I want to talk to you a little bit more, what are those ways to do that and how to get in touch with you?
Rael Lowenthal: Great. So look, you haven't, I mean, you've taken some of my time, but this is really what I love doing all day long. I love talking about sellers. I love talking about our clients, and I love talking about what we do. Maybe a little bit too much.
Ryan Cramer: That's a good partner, man.
Rael Lowenthal: Yeah, exactly. We're very passionate about what we do. But the best way to get in contact is you can actually contact me directly. My email address is raell @ zee. co. Either I will help you, or I'll pass you on to one of our very capable consultants, who will get an understanding of your business and be able to prepare quotations and do a bit of consulting. And then obviously for the benefit of having us on the podcast, we will give anyone who tells us that they've come through the Crossover Commerce podcast with you, a 50% discount on their fixed fee on their first shipment with us. So yeah, if you just, if you come to our website or you email me directly, just mention that you heard about us on Crossover Commerce, and we'll be sure to apply that discount to you.
Ryan Cramer: Amazing. And also the links are in the comments section on social media. If you click on that link as well, make sure you click on the links in there, you'll be notified and the team will appreciate that as well. Rael, thank you so much for hopping on Crossover Commerce today, for providing great information. I think there's excitingness, a buzz about looking into the future in 2022. Hopefully you and your team continue to improve. And hopefully we'll be seeing you guys in- person in events and things in 2022, but we're excited to be partnering with you and your team over there. And it's just great things moving forward for Amazon sellers, e- commerce sellers in general, partnering with the likes of you guys. Exciting for me in general, so thank you so much for hopping on the show today.
Rael Lowenthal: Thank you very much. Thanks for having us, we're very excited to be your partner as well. And thanks to all the listeners, I hope that I provided something useful and really looking forward to hearing about you and about your business and seeing how we can help you grow.
Ryan Cramer: Sounds good. Thank you so much, Rael. Thanks so much. And again, everyone else who is tuning into Crossover Commerce live on our social channels, thank you so much for coming in on LinkedIn, Facebook, YouTube, or Twitter, and listening to us on your favorite podcast destination. Again, you can go to usa. pingpongpartners. com/ podcast to catch every single episode that we've had. 189 all the way up to today's episode will be available there. But thank you so much, Rael Lowenthal of Zee. Again, so much fantastic information. Again, growth opportunities makes you look more valuable to exit potential aggregators and companies like that as well. But doing it smartly, again, doing things more simplified, make yourself more profitable with the likes of using Zee or using PingPong in general are going to put more money back to your bottom line, which makes you look good and feel more profitable. At the end of the day, that's what we all want to do. That's why we're in this business and why we create these services. That being said, I'm Ryan Cramer, this is Crossover Commerce. Tomorrow we have one more episode, this week we've been jam packed. We're going to get to 200 by the end of the year. So with that being said, tomorrow will be 191. We have the likes of, I'm going to go ahead and throw it up, the graphic up there, growing your e- commerce business through influencer marketing with Cody Wittick of Kynship. I'm excited to talk about that too. So that's going to be, we're going to talk about influencer marketing. That's what this podcast is all about. We're going to span everywhere and anywhere in the Amazon e- commerce space. So if you're excited about that, go ahead and follow us on social media as well, and make sure that you subscribe to our channels as well to be notified of future episodes. I'm Ryan Cramer, this is Crossover Commerce. We'll catch you guys next time, take care.
Ryan Cramer of Crossover Commerce talks with Rael Lowenthal of Zee one-on-one as they discuss global expansion on Amazon as well as importing & compliance tips for sellers.
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