Page 16 - Export and Trade

US Market Focus

“For the New Zealand product business,
the Amazon channel continues to represent
a great market entry option, reaching
almost the entire US consumer base,
provided it’s done properly and well – as
there are plenty of traps and pitfalls,” says
Grey.
Best practice US marketing and
distribution strategy now takes it as a
given that a product will end up on Amazon
one way or another, he says, and the brand
owner’s decision is no longer whether the
product is sold on Amazon, but how best to
manage the Amazon channel.
Grey recommends the recently published
“The Amazon Marketplace Dilemma” on
Amazon.com as a good example of current
thinking.
Grey’s advice for Kiwi consumer
products exporters is to make the most
of the Amazon.com channel, and consider
supporting your Amazon presence with a
brand website that tells your brand story
and represents your products well to the
US consumer.
“Even if many shoppers prefer to buy
from Amazon, a branded web-store can be
the anchor for brand-building,” he explains.
For those peddling products for
business, he suggests they consider
Amazon Business, which just 18 months
after launch has more than one million
registered business buyers.
He also advises exporters to make sure
they get their tax compliance in place.
“US states are no longer tolerating tax dodgers, and the shopping culture there, he says.
IRS might not be far behind. This is particularly important ³5HWXUQ UDWHV FDQ UXQ ¿YH WR WHQ WLPHV ZKDW \RX¶G
if yoau plan to store products in the US or use Amazon’s expect in most other countries, and returns handling is
)%$ )XO¿OPHQW E\ $PD]RQ RUGHU IXO¿OPHQW VHUYLFH ´ expensive. It needs to be factored into pricing.”
Selling on Amazon.com gives national reach, an The US tax system can be a bit of a mystery to
audience of hundreds of millions of active and loyal businesses new to the market too, he adds, especially
shoppers, and, when utilising the FBA service, a high with the sales tax nexus rules having changed so much in
level of service including guaranteed two-day delivery the past few years, and many states becoming so active
nationwide for millions of Amazon Prime members, QRZ LQ LGHQWLI\LQJ DQG SXUVXLQJ EXVLQHVVHV WKDW GRQ¶W ¿OH
says Grey. taxes properly.
He also sees Amazon’s opening in Australia creating ³0\ REVHUYDWLRQ LV WKDW PDQ\ ÀHGJOLQJ H[SRUWHUV WR WKH
similar opportunities for Kiwi exporters in that market. US might not be properly set up for tax compliance, and
Selling into the US market does come with its own set sadly might run into serious tax problems. Many perhaps
of challenges. Grey says the proportion of goods returned don’t realise that if you store goods in a country, you’re
by American customers can sometimes be a shock. doing business in that country, which creates all kinds of
Buying and returning unwanted items is all part of the tax and compliance exposure,” says Grey.

14 NZ Export & Trade Handbook 2018