The eCommerce industry is growing at a rapid rate ensuring the growth of businesses. Amazon has operations both in India and globally. However, it seems to work differently across various areas.
Over the years, since its inception, Amazon has built a strong network of sellers. Whether you want to grow your business, in the country or globally, you can rely on Google. It bridges the gap between small sellers and big sellers.
Businesses and individuals can think alike in this world especially to foster personal and professional growth. Amazon Global Selling and FBA (Fulfillment by Amazon) are two key models aimed at empowering sellers to increase their reach to customers. However, their major difference lies in fees, market exposure, operational complexity and logistics.
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Overview of Amazon Global Selling
Amazon Global Selling plays an important role in allowing the sellers to list and sell their products. The products can be listed in international marketplaces of Amazon such as Japan, Germany, US, UK, Canada and more. Therefore, registering in Amazon Global Selling provides a better reach, especially allowing to connect with millions of customers across the world.
With the help of Amazon Global Selling, businesses can create accounts across multiple global marketplaces. Amazon Global Selling can assist with a wide range of scenarios like taxation, compliance and currency conversions. Amazon Global Selling model is the best for businesses that succeeded domestically and want to expand globally.
Overview of Amazon Domestic FBA
Amazon Domestic FBA, as the name suggests, is for businesses and sellers who want to sell only in their home country. The sellers will have to send their inventory to the local/domestic fulfillment centers in Amazon.
Amazon will then take over the delivery process ensuring growth of businesses. It will handle numerous functions such as storage, packing, shipping and even handling domestic customer services. New sellers can also adopt domestic FBA considering the convenience. Through domestic FBA, businesses can focus on building brands locally and also enhance operational simplicity.
Key differences
Some of the notable differences of Amazon Global Selling and Amazon Domestic FBA are as follows:
| Aspect | Amazon Global Selling | Amazon Domestic FBA |
| Logistics | Helps with global shipping and customs clearance. | Businesses need to ship their inventory to the local Amazon warehouse. |
| Fees | Requires paying FBA fees, cross-border compliance rates and currency conversion. | Requires paying only the local FBA fees, with shipping within the country. |
| Compliance | Needs to comply with foreign tax, and legal packaging standards. | Needs to comply with only local regulations. |
| Market Reach | Access to multiple marketplaces globally. | Focused only on the domestic market. |
| Revenue | Currency exchange is involved with a longer settlement timeline. | Faster payout options for local currency. |
Pros and cons of each model
Both, Amazon Global Selling and Amazon Domestic FBA are great for businesses. However, each of them come with pros and cons. These include:
Amazon Global Selling
Pros:
- You can expand your business internationally.
- Conduct business in high-demand areas such as Europe and the US.
- Reduces the need to depend on a single market.
Cons
- Slightly complex tax regulation procedure.
- Currency conversion and logistics costs are supremely high.
Amazon Domestic FBA
Pros
- Operations and setup is easy.
- Fosters quick delivery.
- Sellers get better control on inventory management.
Cons
- Limited country-specific customer base.
- Saturated market leads to increased competition.
Who should choose what: seller profiles/scenarios?
While both Amazon Global Selling and Amazon FBA have their advantages, they have their cons too. Choosing between either of them can be a tough call. Below are key scenarios under which you can choose:
Amazon Global Selling
- You’ve established your business domestically and want to expand internationally.
- You want to increase your revenue streams.
- You have a product that can cater to the international market.
- You are profitable enough to invest in regards to international compliance and logistics.
Amazon Domestic FBA
- You are new to the eCommerce and Amazon marketplace industry.
- You have very limited capital to invest in global logistics.
- You want to establish a strong local brand before going international.
- You are just starting to test new products.
Tips to transition from domestic to global selling
If you’re moving to Amazon Global Selling, making the transition from domestic FBA can seem like a tough call. Here are some of the key ways to transition smoothly without any hiccups:
- Research and check if there’s a demand for the products you sell internationally. What sells here in India may not have the same impact globally.
- Don’t rush into selling. It is advisable to start with one international market and then expand the business elsewhere.
- Be familiar with compliance, VAT and labelling rules.
- Work closely with the global logistics providers.
- While selling your products internationally, it is advisable to localise them with the right use of keywords and tonality to appeal to the local audience.
Conclusion
As a business, you can get a wide range of growth and selling opportunities using Amazon Global Selling and Amazon Domestic FBA. However, it completely depends on what your long term business goals are. Selling on Amazon can help to expand your brand’s journey. However, if you need faster and better compliance standards, you can choose QuickShift. Schedule a demo to integrate it in your business and understand how it would help your business in the long run.