EP #322] [ENG] - What to consider when scaling brands internationally - Natalia & Alexandra

EP #322] [ENG] - What to consider when scaling brands internationally - Natalia & Alexandra Unknown Speaker: Welcome to The Ecommerce Lab By Ecomcy. This is the place for everything related to Amazon private label and e-commerce. Learn exactly what you need to start or scale your business. Get insights from the top industry experts who will discuss the latest trends and best practices in the world of Amazon. From choosing products and sourcing from a supplier to setting up your Amazon account and marketing your business, you will hear it here. Let's get started. Here is your host, Vincenzo Toscano. Speaker 1: Hello, guys. Speaker 3: Welcome to another episode of The Ecommerce Lab By Ecomcy, the place of air related to Amazon FBA, Pro Reload, and e-commerce. My name is Vincenzo Toscano, founder and CEO of Ecomcy, and today we bring you two special guests. Her name is Alexandra and Natalia from Avast, my top partner when it comes to helping my clients and brands when it comes to international expansion, anything around BAT, compliance, you name it, they are your trusted partners. And that's why I wanted to bring them today to my podcast because I know with everything going on with Atari, especially in the US, Global expansion has been a topic that has been very hot because people are really looking for ways to diversify, how I can mitigate the instability that the U.S. is going through, how I can expand my horizon as a brand, tap into new consumers, and today we're going to be talking about that, what are some of the things you have to consider, and also how Avast can help you throughout that journey. So, Alexandra, Natalia, welcome to the show. How are you guys doing? Speaker 2: Doing good. Thank you for having us, Vin. Speaker 3: Pleasure. Pleasure. Thank you for being here. Thank you. Thank you so much. I always say, you know, every single time I have somebody from from us, we always have, you know, very engaging episodes. So you guys always, you know, dropping insightful information about what is happening, things around taxes, compliance. I'm sure today is going to be no different. And as I mentioned, today's topic is something I'm sure you guys are having this conversation on a daily basis with your clients as well, which is, you know, global expansion. And why that is critically important in 2025? I think that's a question that I'm sure is in everybody's mind. And I guess that could be, you know, a very good starting point. But before we go into that, maybe we can start with a quick intro about Vodafone so people can get to know you. Wait while you guys do it in a mask and then we can go from there. Speaker 2: Perfect. I'll go ahead and get started. My name is Alexandra Ramirez, also known as Allie Ramirez. I work with Avast and I run the the U.S. sales team. We're actually opening our new office in Fort Lauderdale next week. So I'll be working with our sales team in the U.S. and alongside Natalia. So hand it off to Natalia. Speaker 1: Thank you. Hi, everyone. Lovely to connect with you. I head up the UK office, so on the other side of the pond. So no matter where you are based, you have someone that you can speak to. And just like Ali, we help sellers like you guys expand into other markets. Happy to have a chat with anyone today that just wants to discuss what they're doing and what they want to do and help you from there. Speaker 3: Awesome. Thank you so much. So I guess going back to the topic then I guess. That's, you know, the one million dollar question is like, why should we expand outside the U.S.? Why shouldn't I start just stay in the U.S.? And that's it. Like, why should I complicate my life? I guess let's start with that question. Why is it so important to go global? Speaker 2: I can take that one. One of the things that usually people talk to or ask us exactly, like you say, like, why would I complicate my life when I could just expand in the U.S.? I could just expand to other marketplaces. You can actually become very stagnant as a brand because there is so much saturation in the US. We're not talking Amazon in the 2015s or 2020 when everybody was really launching in those areas that they could. It's just so, so saturated. And along with saturation, cost per click has gone up. Advertising has gone up. The logistics prices has gone up. Not to mention even tariffs when you add the tariffs into all of those things. The fact is that expanding in the U.S. has become harder and harder. And I'm sure we all know that, especially if you as a seller are in supplement category, pet category, baby categories that we've seen just become absolutely just saturated. So like as a brand, you have the opportunity now to really be one of these And I'm here to talk to you about how you can be one of the bigger first movers to move into the UK and Europe, where a lot of these categories just aren't saturated. The cost per click is lower and the demand could actually be higher than the US. Granted, that's going to be very different category by category and keyword by keyword. But you would be surprised when you look up a lot of these keywords that you're already ranking for in the US. You might actually be ranking even higher or not ranking, A couple of case studies that we can share with you later on that we didn't even, we had a client that didn't even notice that there were resellers of his own brand in the UK doing absolutely fantastic because the keyword was just like, the opportunity was massive. So they decided, well, why am I going to let somebody sell my own brand? When I myself could just expand into Europe, it was actually in the German market. So there are things that we've been seeing, like if you're not doing it, somebody else might be doing it either with your own products or within your keywords. So it's not just about growth. It's also about protecting your own brand because you could be or somebody could be cannibalizing where you could actually be expanding. So overall, going across border, like saturation is less, the opportunity could be higher. You don't have to deal with a lot of the same tariffs that the US is now facing and the flip-flopping that we're all seeing. And it just helps you diversify overall. Speaker 3: Yeah. And I would say just to build on top of that is that sometimes it's also the opportunity cost. Like I have this conversation a lot with US sellers. Well, usually what you're going to encounter is, let's say, for example, they already control 34% of the market. And they really want to get an extra 5 to 10 percent. Sometimes what is going to cost you to get that extra 5 to 10 percent, it could be the same investment you might require just to expand to Europe, right? And the opportunity cost can be so much bigger exponentially because of the compound effect it's going to be in terms of having other sources of revenue and also not relying only on one, which is why so many sellers are struggling. Like when the tides essentially kick in, everybody was struggling because That was the only influx of revenue. So it's definitely super important for the future of so many Amazon brands. Now, when it comes to this expansion, though, I feel, of course, there comes a series of things you have to be aware of, especially when it comes to the compliance side of things. I think when it comes to compliance, there's so many moving parts and it's very easy to sometimes overlook some of the ones that can end up being very costly for your business. So I guess that's another question I wanted to bring to the table. It's like from the experience of you guys working with so many clients that are doing this expansion right now, what is usually the thing that most people are overlooking that is something that is definitely you should be aware of? Speaker 1: I think in terms of overlooking, it's not maybe overlooking, but trying to One of the first things that we would not have to deal with it is the VAT side of things. It's something that we talk about every day. And I know it's not a general nice topic to talk about, but it exists. So VAT is one of the first things that we would always discuss with a client just to make sure that they're set up. But EPR now tends to be overlooked slightly just because it's the most recent thing that's been introduced. So it's just an eco tax that's been applied to products. It maybe sounds more complicated than it is, but it's a tiny, tiny piece of the puzzle, which cost-wise isn't large either. You do have to have it to sell in Europe, but it honestly is minor. But things like that you can't overlook because without it, you can't activate your listings, for example, in Germany. So those tiny things that if you just talk to someone and we could give you like a checklist of what you need before you expand. So make it VAT, EPR, check your customs, and then you're ready to ship. It's just having that narrowing it down and just making a checklist might help you understand what you need to expand. Speaker 2: Oh, sorry. Speaker 3: No, go on, Aleksandra. Speaker 2: I wanted to jump in and just like to expand a little bit on that ecotax Natalia speaking about for those that have never sold in Europe that I know a lot of US sellers are not very familiar with EPR. It basically means you as a seller are in charge of recycling and disposing packaging. So it's basically you're bringing additional plastic into the country. So they want to force you to basically be in charge of that recycling. So it's added, an added ecotax. So you don't have to find logistically how to recycle. They're just going to charge you a very specific price. And to Natalia's point, it's very nominal, but each country is very specific. If it's plastic, if it's batteries, if it's electronics, And that's what Avast can help you navigate so you don't have to worry about it. We'll just ensure that you're enrolled in the right country for the right category. Speaker 3: Awesome. So I guess we're very quick on this. I know this is depending on a lot of business, but just a quick question in terms of timeline. Do you have at least to consider X amount of time to get compliant with all these things? Do you recommend six months in advance when you're in advance so people have some sense? What is usually the timeline you recommend? Speaker 1: Yeah, like anything, things take time, especially when you deal with tax offices. So it might not be necessarily a vast timeframe, but it's the tax office timeframes. So to your question, I would say give it at least three to four months before you're hoping to have product in the country. That's when you need to start thinking of all of this. Obviously, things can be quicker and we can push that to be quicker. But just to make sure that you have realistic timeframes, I would give it three to four months before. Speaker 3: Cool. And I guess when it comes to talking about evaluating this expansion, because this is something I encounter when I talk a lot with sellers as well, which is how do I actually assess the opportunity for me to expand into some of these countries? Because I know when it comes to compliance, At the end of the day, there's a cost involved for making this compliance and BAT effective across my business, especially that's incremental depending on the number of countries. So I know sometimes people might do the mistake that let's say they expand to Europe and they might decide to go all in and then they realize the product is actually not a good fit for all the markets at once. So is there something, some guidance you guys give when it comes to making sure you move at a speed that's definitely going to be efficient, but not at a speed that's going to be super costly and not effective for you in the long term? Unknown Speaker: Absolutely. Speaker 2: And I would say that this is not necessarily cookie cutter answer. We'll give like what general usually guideline we give on this. But we do like to meet with every single seller, understand what their product is and what their goals are, and we'll give recommendations Based on that, however, if we were to start with just like absolutely have no idea what I want to do, like what do you recommend? We would usually recommend to a US seller to start with UK just because of ease of language and compliance. You're already having something in English. We do recommend that you do some research and localization because although it's still English, you do want to make sure that you're ensuring that in terms of customs and culture and things like that, you're localizing that adequately. But it's an easy first step just because it's in English. Compliance is also a little bit easier and it's quite quick to get your VAT set up in the UK. The second one I would recommend if you were to do one or two only for Europe would be Germany just because the size of it. The German market is the biggest one in all of Europe. They make it very easy for logistics, especially on Amazon. And then it also has a high trust market. They have products that they're looking for that have high quality. And usually they're also already looking for American brands outside. They're already shopping internationally. So if sellers already there are looking for brands that they recognize, brands that they trust, And American brands overall, once you bring it to their market, your opportunity of growth is actually much better and much quicker. So I would say Germany and UK would be like my first two that I would recommend. But you always want to make sure you're looking at your keyword, your keyword opportunity, you know, the product market fit to your point. Not every product is going to make sense in every single country. The logistics that you're looking at and that's something that we can help you through because there's so many different alternatives. For you to be able to make it a little bit simpler, especially as an Amazon seller, Amazon offers Pan-EU FBA, which allows you to actually use like an FBA logistics center and sell into multiple countries without having to have a VAT number in every single European country. So there's a few things that we can kind of walk sellers through depending on what they're looking to do. Speaker 3: Cool. So I would say in terms of the complexity of all of this, because I'm aware and Now when it comes to expanding to Europe, there are certain countries that by me are more complex than others because of just the bureaucracy that is specific to that country. So just to make a quick parenthesis on that, is there some countries that from experience, just so people can be aware of that, tend to be more lengthy the process than others? Like if we have to have a quick scale of, you know, which country is the most efficient, which country is the least efficient, do you guys have some sense when it comes to that? Speaker 1: Yeah, always. I wish every country was like Italy because Italy is so nice and easy. We get the VAT number in a matter of weeks, sometimes days. So Italy would be the quickest. But obviously these things you have to consider, although Italy might be the quickest, it might not be the best for your product. And then the most bureaucratic one is Spain. Spain It's very old-fashioned. They still want you to apostle and notarize documents for them to approve them. So it's still stuck in those ways. The good thing is that once you do it, it's done. You don't have to do it again. So if that is a market that you're interested in, don't be put off by these bureaucracies. There are countries that are easier than others. Germany, luckily, is not too difficult and it is the biggest value thing. So it's an in-between one. Speaker 3: Cool, cool. Nice. So I guess when it comes to this expansion, another thing that I get asked a lot, especially for brands that, you know, want to be very efficient with the cash flow operations and everything, is that it's even possible when it comes to this expansion to be profitable as soon as possible, because something I encounter a lot is when I explore the possibility to expand. And you said to some brands that it might take a certain amount of time to make it happen. Some people might get afraid because they're just a very cash flow kind of sensitive when it comes to that. But what is your take on that? Like, do you guys, especially with working with so many brands, have you seen brands that pretty much from day one, they're able to be efficient with their operations in Europe or usually will take some time for that performance to kick in? Speaker 2: I would say if done strategically, this is absolutely something that can be done profitably from the beginning. Like when you're looking to expand beyond in the U.S. in multiple ways, whether it's to another marketplace or to grow the amount of inventory that you have or to go from FBM to FBA, you don't just do the hop, right? Like that's something that sellers usually take their time, they strategize and they plan properly for that additional inventory or for that new marketplace. Same thing has to be said for here. You want to make sure you make a plan. You take your time, especially when it comes to the timing. As Natalia mentioned with the VAT, it could take a couple of weeks. It could take sometimes two to three months. So you have that time once you start applying to your VAT number to the country you're looking to expand to then make your strategic plan in terms of How much inventory should I be sending? How should I want to do it? Do I want to use FBA, PAN EU FBA, or do you want to use a local 3PL in specific countries, right? So as long as that strategy is in place, that's absolutely something that can be profitable from day one. Not only can Avast also help you kind of like navigate Which way to go in terms of country, in terms of compliance, also in terms of your customs so that you don't encounter any delays. We also have partners that we could recommend, especially for like, let's say the localization and the translations or for anything that has to do with your labeling, we have a partner that we can actually recommend. So there's different avenues that within your strategy planning, we can also assist either us or with our partners. Speaker 3: Cool. So I guess all this comes down also to another question, which I'm sure you get asked a lot, and it's, how do I even know I'm ready for this expansion? Because, of course, Euro could be a good fit because numbers make sense, because you see there's a fit for your type of product. You understand the compliance because you're working with somebody like us that can make everything possible. But at the end of the day, some people might not be ready for this jump because of a series of risks. It could be because the business is not big enough or because they have other kind of channels going on in the US that they have to prioritize before doing that expansion. So I'm sure you get this question a lot, like, do you actually think it makes sense for me or not? Like how you guys usually try to answer that question? Speaker 1: I think I'd always say that be established in your country of incorporation or in your first market. Don't take the leap just yet. So make sure that you're fully established in that country and you're profitable. And then you're going to use your expansion as an add on rather than it being the mainstream of income. Always see it as an add on. And then eventually it's going to become a stream of income. But that's the best way to do it, just because you could always then use the strategies you used in your first country to your second one. I don't think we've ever seen anyone not be successful because going back to right at the beginning, I think it's about two or three percent of US sellers are currently selling in Europe, which is nuts. The market is waiting for those clients, those sellers to come. The clients are waiting to be able to buy those products. So eventually those products are going to be bought. I would also say do your research because unlike the US, Europe has so many different marketplaces. So we see people succeeding more on C discount in France over Amazon because people would rather buy from local marketplaces. So do your research in terms of the marketplace as well. The compliance side of things is the same, whether you're selling on one marketplace, two or five. So in that sense, it's nice and easy, but I would definitely recommend doing the research and making sure that you're expanding to the right country and the right marketplace once you're established in your local country. Speaker 3: Yeah, I think that's usually an unfortunate mistake I see people doing a lot. They sometimes see Europe as a way to save their business, right, and make their business better. So they see it as a silver bullet and they think, okay, I'm not performing in the U.S. and they do the jump and then they really struggle because they might not have the cash flow and they are not associated with the timelines and everything that will take for Europe to also succeed. So that's why it's very important sometimes to highlight that, yes, international expansion is definitely something you have to pursue. But at the end of the day, you can know, you know, going to a new region if your home country, like your home base is not optimized to sustain the load of going to new markets effectively. Speaker 1: Yeah. And see it as an investment. At the end of the day, you will put the money in at the beginning, but then like the investment, it will come back as fruitful. So just see it that way as well. Speaker 3: Cool. So I guess to start coming to a closure, what are things besides the questions that we went over today you think is something that you guys think is still important to highlight that we didn't discuss? From the perspective could be compliance, from the perspective of things that you guys are seeing happening in the market, trends, like what is another thing you guys could be beneficial to highlight to conclude? Speaker 2: Yeah, I think one thing that a lot of people don't realize is how small right now retail in Europe has moved into ecommerce. And to put figures to that, in the UK, ecommerce only makes up about 26% of retail currently. And then France and Germany is about 16 to 17% in each of those. So if you think about in the US, we know that pretty much any retail location in the US exists on ecommerce. And that's the same for any brand. Like truly, I don't think I can think of any brand that I've ever bought in a store that I couldn't buy online in the US. I don't think that's the same or can be said the same for UK or Europe. And a lot of the brands that when you look up, usually they're only going to be in the US. So knowing that 16 or 17% of brands are on ecommerce only in Europe. It tells you like the opportunity is so absolutely massive. And I know we've talked about saturation, but that just gives you kind of like an even bigger number of like the saturation that is not present in Europe versus the one that is present in the US. I mean, there's over 500 million customers between Europe and UK. So that's a whole humongous number of customers that you could be missing out on that are already buying internationally. They're already looking for American brands that people know or like see on TikTok or see on Instagram. So they might be looking for your brands already and having to buy them internationally. They're just waiting for you to put them. In their market, pretty much. So that's something that I always like to highlight, like the opportunity in Europe is just so much bigger than we all truly realize is there. And Germany and UK, I know we keep talking about them just because they're like the biggest, biggest market in Europe, but the reality is that Together, both of those markets take up half of the ecommerce sales for all of Amazon. So that's why we really kind of like emphasize UK and Germany could be like a very easy step to start and then kind of like grow from there just because of the demand is so big and strong for these like, not necessarily American brands, but like brands of quality and brands that are very reliable. Speaker 3: Yeah, which I guess to add on top of that very quickly, I know a question I get asked a lot as well is when it comes to Germany and other strategies people are doing, they start with Germany as a hub. They might use EFN to try and test their countries. And then if those countries start to show kind of some fruits, that's where they go and deploy kind of a depending you. Is that something that you guys are also seeing people doing frequently when it comes to European expansion? Is that a practice? Speaker 1: Yeah, exactly. And I think that's the beauty of Europe that you're not stuck to each country separately. All those clients that we're talking about, you could be accessing them just from Germany. So you don't have to expand to every single country. You could use Germany as a hub, as you said, and then just distance sell to all the different countries in Europe, which are 27. So you could be selling to 27 different countries all from one without the need of registering anything else, thinking about compliance. You're just focusing on one country, but you're selling to 27. Which I think we often forget that Europe is one as a whole. It's not separated. There's free movements of goods you can sell to any of the countries. So that would definitely be a strategy that I would use at the beginning. Focus on the one big market, distance out to the other ones, and then use that data so that you know where to expand next. If you have a look at your sales and you say, well, 90% of my distance sales are going to Spain. Let me expand into Spain because I know that there's a market there for my products. Speaker 3: Awesome. Cool. Love it. Great. So I think, I mean, to be honest with you guys, I know this is a topic that we could go for hours and hours. It's such an extensive topic. But at the end of the day, I think today we did such a good job in terms of highlighting the main things in terms of some of the main questions people are asking themselves when it comes to international expansion. What is worth doing? What are the pros, the cons? I'm Vincenzo Toscano and I'm here to talk to you about some of the good practices and I'm sure some of the deeper questions that could be resolved by, you know, people reaching out to you guys. So tell us more about, you know, how Avast can help. And of course, if there is something like an offer that people can take advantage. Speaker 1: Perfect. Speaker 2: So Avast can actually help you. I know we touched on just a few of the things that we can actually help you with in terms of your expansion. But to summarize them, we'll start with VAT, Ship and store your goods. In that country, you'll require a VAT number. So we can start with that registration, but not only can we help you register for your VAT, we can ensure that you're being compliant with your filings. So some countries require monthly, some quarterly, some biannual, so that you don't have to be worrying about all that. That's something that Avast can actually do, not just your registration, but your ongoing filings with each tax office. We can also help you with customs. So your EORI number that you will need one for Europe and one for UK if you're in both of those. And it's just to avoid and ensure that everything within your customs will be taken care of and you avoid any delays. We also can help you with if you do need a customs representative, which some countries will require it, some won't. But that's another thing that we can also, you know, assist with, which is why I know I said a little bit earlier, like none of these solutions are cookie cutter. The way that I could present to each seller, it's going to really depend on every seller and how they're shipping, where they're shipping from, where they want to expand to, which is why we can absolutely customize these options. So customs, VAT, EPR, which we touched a little bit on as well, which is that ecotax that we mentioned, ensure that you have audit readiness for customs. And then one more thing called OSS, which is our one stop shop, which is to help you sell across like different European countries within the European Union. So all of those things are top of mind, that things that Avast can assist you with to ensure that you're ready to begin your journey of expansion. So those are the top things I would definitely say. Natalia, I don't know if you have something you'd like to add as well. Speaker 1: Now that's the services we offer. And I think the best thing that we can do is have a call with anyone watching today. If you want to run through your business, see where it's best for you to go. And based on that, what do you need? So what we can do is give you our email addresses and you can contact us directly. We can arrange a call. And obviously, we would like to offer you a discount as well for your expansion. We understand that it's a big investment to do this. So we want to give you the first VAT number for free and any additional VAT numbers that you want to add on, if you do want to, we can give you 50% off that. So we can leave all the information on screen. And if you just contact us saying that you watch this webinar, we can help you from there and apply that discount. Speaker 3: Thank you guys. Pleasure as usual. I look forward to seeing you soon at some of the events and guys, we'll find all the information down below in the description. Other than that, pleasure and see you in the next one. Thank you so much for the value. Speaker 2: Thank you everyone and thank you Vincenzo. Speaker 3: Thank you for having us. Unknown Speaker: Thanks for listening to The Ecommerce Lab By Ecomcy. Be sure to subscribe so you don't miss an episode. While you are at it, we would appreciate it if you could leave an honest rating and review on Apple Podcasts, Spotify, or wherever you listen. That will make it easier for others to find out about the show and benefit from it. Want more? Visit our website at www.ecomc.com where you can get your first consultation for free. Or find us on Instagram, Facebook, and LinkedIn at ecomc.