Wall Street Journal writer, Jonathan Elmont came out with an article blasting Amazon's approach to Chinese Amazon sellers versus Westerner Amazon sellers. He accurately writes that many Chinese Amazon sellers look at what westerners are producing, replicate them, and sell for a lower price. What happens when you have the West and East both selling on Amazon? Elmont's article title, "Amazon’s Heavy Recruitment of Chinese Sellers Puts Consumers at Risk."
I'll just share the fun stuff:
• A new product listing is uploaded to Amazon from China every 1/50th of a second.
• Chinese merchants collectively represent more than half of Amazon’s physical gross merchandise sales.
• Amazon recruits Chinese factories to sell on Amazon—direct from factory to consumer.
• The Journal earlier this year uncovered 10,870 items for sale between May and August that have been declared unsafe by federal agencies, are deceptively labeled, lacked federally-required warnings, or are banned by federal regulators.
Let's put this into perspective. Of the 3 billion listings on Amazon worldwide, if those 10,800 products were all the bad ones, this means that 0.00036% of Amazon’s products are "bad." Based on this Wall Street Journal report, this means for every 277,777 listings on Amazon, there is one bad product.
Imagine a car company with a faulty vehicle every 277,777 cars. They'd win an award.
I understand Western Amazon sellers' frustration. I've sold on Amazon for a long time, spending money, time, and heart making something unique only to find copycats and hijackers listing my product on Amazon.
But honestly, if I were a Chinese seller, growing up in China with a limited understanding of Western culture but access to building products at a third the cost, I'd do the same thing they do. Naturally, if you were in the East, you wouldn't understand the American or European consumer as well. Your English is limited. Your comprehension of the Western-thinking customer is limited.
Imagine you were born and live in China. You don't know what original idea is going to sell in Western markets. What do you do? You go online, see the other products, find what's selling and eureka! I can go to my local factory, negotiate good terms and make the same item for less. USA patents aren't being enforced in China, so what can they do to stop me?
If you think about it, we Westerners are taking the same approach: leveraging our strengths based on what we know.
Instead of fighting Chinese Amazon sellers. Why not learn from them? I'm doing that right now while writing this to you from Shanghai, China.
The biggest mistake Westerners making when selling on Amazon is trying to beat the Chinese at their own game: price war. Trying to beat them at cost. It’s like a cat trying to be a fish at swimming. The way you win in the market is by leveraging your strengths, not copying what is a natural strength of your competitors.
If your differentiation is price, you made a mistake. It's the perfect recipe to be outdone by China. You'll never win the price war against Chinese Amazon sellers.
That’s why it’s so important to understand what you, the Western seller, already have as a built in strength that the Chinese will never be as good at.
Do you know what it is? You are the buyer! Chinese are selling to the Westerner. You are selling to the Westerner. But you also are the Westerner! Do you realize what a massive advantage this gives you? No wonder the Chinese Amazon sellers copy what you do. You are their window into the consumer.
You as the Amazon seller from America or Europe can build a brand that people love, so they buy the product because of its brand, not because of its lower price.
But don't most Amazon products sell for $15-$25? Not at all. My team did a huge study on this and the results were mind-blowing. The most common product price on Amazon is just above $60. The vast majority of Chinese Amazon sellers won't even touch a product this expensive. This gives you a massive advantage, especially when you consider that higher priced items are far more profitable.
Think about it: assuming your higher priced product is the approximate same size and weight as a lower priced product, the fixed costs give you an incredible advantage. Your shipping fees, FBA fees, storage fees, and PPC keyword fees are the same as a lower cost product. Only Amazon's referral fee is higher. In fact, in many cases, because so few sellers sell higher cost items, your PPC cost is significantly lower than a lower cost item because fewer competitors are bidding on that keyword.
Put your brand name in front of the eyes of the buyer every chance you get and create a fabulous experience so that customers don't just buy the product for its features. They buy it because they associate your brand with that remarkable experience—a brand they have grown to love and trust. How? We teach you how to do this.
Kind of like Steven Yang did with Anker—funnily enough, a Chinese man himself! But Steven Yang understands Western culture, as an employee of Google before he set out to build his own business on Amazon.
No, Chinese Amazon sellers are not the biggest threat on Amazon...unless your differentiation is just price.