Welcome back! 🙂
In today’s post, I will give you a quick update on my Pan-EU expansion. This time, I’m covering Amazon Italy (Amazon.it).
When I first started to think about expanding into the European Amazon marketplaces at the end of last year, I did some research using Jungle Scout to see how well products similar to mine were performing abroad. I was particularly interested in how many sales these products were generating per month.
While I saw great sales volume in France and Germany, Italy and Spain showed very little potential. So, although I didn’t have great expectations for Italy, my plan remained the same: to make at least enough sales to cover the monthly VAT filing costs that I need to pay to VATGlobal.com
IMPORTANT!!! I have arranged a special deal with VAT Global for my blog readers. You will receive a special discount on the VAT registration and returns fees IF you mention this code when contacting them: ANDYVAT2020
In Italy, that meant I had to make more than 40 sales per month because the FBA fees in Italy are much higher than in the UK, France or Germany, for example. I’m selling my product at €9.99 and the FBA + referral fee is €4.64!!!
This means that after VAT and the product cost, I’m left with a small profit of just about €2.50. If my VAT accounting costs for Italy are about €100 per month, it means that I have to make at least 40 sales to cover those costs before I make any profit.
Of course, I could increase the price of the product to €10.99 or even €11.99, but knowing that the average salary in Italy isn’t nearly as high as in the UK, Germany or France, I didn’t want to position my product as being too expensive. I hoped that my low price would attract the small number of people who do shop for the product on the Amazon.it marketplace.
Seeing the low sales numbers beforehand, I was quite nervous about the sales. And rightly so! In the first month, October, I sold just 18 units:
That made me think that this venture wouldn’t go that well… but I was hoping that my Christmas-themed variations would do better and that maybe the Christmas sales would cover the whole year’s expenses and possibly even make me some profit.
There are no real extra costs associated with selling on all the platforms, apart from the VAT filing fees. In the beginning, you will have to invest some money into translating your listings into the Italian language, though. I used this translator from Fiverr and was very happy with the work I received.
Maria did an excellent job on the translations (as far as I can check with Google Translate), AND she actually went the extra mile and provided further information on competitors, gave me marketing recommendations specific to the Italian marketplace, and she even did keyword research for backend keywords as well as PPC.
At the time of writing this post, her service cost for one product is just €28.43, which I find to be an extremely good value for the work that Maria does. So, if you need your listings translated into Italian, make sure to check out her gig on Fiverr!
Going back to my results: after a rather slow October, November came as a pleasant surprise! Along with the everyday variations of the product selling better, the Christmas sales started to come in and the results truly amazed me:
I sold 635 units, making almost €6000 in sales!!! 635 units x €2.5 profit per unit meant that I made €1,587.50 EUR in profit! Now, I did spend around €260 on PPC costs, but still, the profit I made in November (€1200) will cover my VAT costs for the whole year! This means that every sale on top of that for the next year will be profit!
December has just started, but it also looks very promising:
We have yet to see if this sales volume can maintain momentum up until Christmas or if I will run out of stock sooner than that, but if I sell 1000 units in December on Amazon.it alone, I will be very happy! I will give you an overview update of how all of the marketplaces performed in a separate post (or possibly a video), so keep an eye out for that sometime in January.
Obviously, this sales spike is mostly due to Christmas shoppers, so I will have to wait three to six months into 2020 to see how well my everyday variations of the product perform. But even if Italy is only good for Christmas sales and I can make, say, an extra €5000 NET profit per year, I would be very happy with that!
Essentially, after you translate your listings and set up everything, there’s no extra work involved, so it’s all pure profit!
I haven’t created A+ Content for Amazon.it yet, so this is something I plan on getting done next year, and hopefully, that will further help the sales grow.
I have also noticed that on the Italian marketplace, I get a lot of B2B customers. The proportion is definitely higher than in the UK. Many of them will ask for an invoice via the Amazon messaging system, so I have to send a prewritten answer informing them about where they can download it. It seems that Amazon is not doing a very good job of explaining the whole invoice thing as many buyers are not aware that their invoice is available right from their Orders page when the order has been shipped out.
Just make sure that you have added all the VAT numbers in your account settings and have enabled the Amazon invoicing system. Otherwise, you will have to create/generate these invoices on your own, which can be a pain (as I have now discovered doing business on Amazon.es, but more on that next week).
Also, it was great to see that PPC click costs on Amazon.it are extremely low. I’m talking about two to three times cheaper than the UK marketplace in some instances. This makes the whole PPC process much easier, especially when we can’t properly evaluate the keywords. I’m running Auto campaigns—which, by the way, are performing extremely well, especially on the product placement side—as well as basic Exact, Phrase and Broad campaigns for my main keywords.
I would definitely recommend that you use Auto campaigns extensively for the EU marketplaces. The search volume is not that high (at least for my products), but Auto campaigns perform very well as they will automatically advertise your product on similar/competitor products.
The search volume is quite low, but this is due in part to my product being quite specific and having English text on it. It’s not the most suitable product for international sales, but that doesn’t mean that your product is the same. Check out the sales volume for your particular products using Jungle Scout. It could be that there’s tons of demand!
And, of course, the final piece of the puzzle: competition. Competition is extremely low in Italy, and if you have an amazing product with great a listing and images, you will find it very easy to rank your product quickly as the average review counts across the platform are very low compared to the UK market.
Lots and lots of listings don’t have any reviews at all, so it’s like the old days on Amazon UK! If you have at least one review, your product already stands out in the search! That’s amazing!
Ok, that’s it for today. Next week is the last week I’m publishing posts before the Christmas break, and then I will have an update on my results in Spain. If you haven’t seen them yet, you can find my update posts about my results in France and Germany here.
Then, in January, I will also create an overall update on my progress so far across all of the European marketplaces.
I really hope these posts bring some value to you—especially if you’re new to the Pan-EU program and are still sceptical of it. I have already said this, but I will repeat it many times: 2020 is the year that every Amazon UK seller should expand into the EU marketplaces! It takes some effort initially, but after that, it all works on autopilot and can basically DOUBLE or TRIPLE your business in no time!
If you have any questions about the things I have covered in today’s post, please leave them in the comments section below. I personally reply to all comments on my blog, so the time you take to write your question is never wasted! 🙂
And if you do want to learn more about my Amazon FBA strategy and business model, make sure to head over to the Amazon Sharks website to learn more about the best way to start a successful Amazon FBA business in 2020 and beyond!