How does an aggregator manage your brand after you exit?
A case study of Peak Coffee’s expansion to the U.S. T
oday, Amazon reaches consumers across 17 different marketplaces , ranging from the US and UK, to Egypt and Japan. The retail behemoth’s global brand combined with its extensive FBA program can help you reach customers in new geographies, drive the financial growth of your e-commerce business, and cement brand awareness globally. But the process of taking your brand to new geographies can be daunting; you need to wrap your head around localisation, taxation systems, varying consumer tastes, order fulfilment & returns, and more. At Olsam, we took on all these challenges (and many more!) to launch the entire range of one of our star brands, Peak Coffee , in the U.S. Peak Coffee started out in the UK, generating most of its sales in its home market, alongside listing just two of its SKUs in the US Today, post US launch, 30% of Peak Coffee’s total sales are generated in the US, as we have successfully tapped into the strong demand for coffee pod holders in this market.
Launch strategy: Understanding Demand
Before launching your brand into any new market, you need to assess how the demand for your products in the new market differs from demand in your home market. The key to doing so successfully is through understanding the keyword search volume for individual products across your brand. In Peak Coffee’s case, we found that our Nespresso Vertuo Tray had higher demand in the US than it did in the UK. This was clearly reflected upon launch as the Vertuo Tray became an instant best-seller, quickly reaching #11 in the Coffee Pod Organizer sub-category and selling as many as 140 units per day early on. In contrast to this, other products in Peak Coffee’s range did not generate as much as demand as they did in the UK, and the success of these varied materially. You might also need to consider a deeper dive into demand across specific regions, in some cases, particularly If you plan on launching in Europe. This might mean understanding the demand for your product in individual countries across the continent.
Timing and listing strategy: In line with our strategy to rebrand Peak Coffee as a premium and giftable product, we decided to launch in the U.S. just before Q4, so we could leverage increased demand during the holiday shopping season.
Another critical element of the launch was our listing strategy. You might be tempted to expand into a new geography by launching products from scratch. Yet, where possible, try launching your products as variants of existing products. By doing so, you can make use of existing traffic, and eliminate the need to spend more to get eyes on your page. Implementing this strategy with Peak Coffee allowed us to break even and attain profitability in just over a week.
Logistics and Amazon inventory limits: We faced a range of logistical challenges, as many sellers did in Q4 2021, especially with rising freight costs. The largest container shipping line, AP Moller-Maersk , was predicted to generated $14.5 billion in operating profit in 2021. By utilising data analytics and finalising ordering requirements by SKU in June 2021, we were able to place early orders, and ensure that we remained in stock across 3 PLs and Amazon fulfilment centres throughout Q4.
Secondly, the marketplace limits the number of units you can store within its fulfilment centres; each new seller gets to store 1000 units of standard sized items, another 1000 for oversized items, and 1000 for apparel products. Many sellers under-utilize the ‘oversize’ units as they typically sell standard sized goods. For Peak Coffee, we were able to send in more units, as our products were oversized, which in turn enabled more sales. Working with an Associate Partner Manager: If launching in a market is on the radar for your Amazon business, it’s worth your while to work with an Associate Partner Manager (APM) at Amazon. This is a free service for any seller who wants to grow geographically on Amazon. APMs benefit when your business does well – they typically aim to have a proportion of your revenue attributed to them. They can help increase your restock limits upon launch, and help you deal with platform related issues, as they did with us, when Peak Coffee faced ASIN hijackings upon launch.
Going global with your brand is increasingly a non-negotiable for success on a marketplace as competitive at Amazon. At Olsam, we specialise in taking brands to new heights, and navigating the issues that geographic expansion typically entails.
Get in touch with us at nickysingh@olsamgroup.com to learn more!
