Grow Your Product Sales Into The UK & EU Plus eCommerce Brexit Risks with Karen Codd

Protect your brand, product or invention from the hazards of consumer product launching and go from idea to product to big brand. With guidance from retail product design and development experts Tracy and Tom Hazard. Get the insider secrets to put the right things in the right order with the right resources so you can out design, outsource and out profit your way to retail success.

Hey, product launchers. Tracey Hazard here and I have a really interesting guest for you today. I have Karen Codd and she is an Amazon seller in the uk. But more importantly, she advises Amazon sellers on getting into the UK market and Europe for that matter. And I know there's a lot of questions you guys have about that, so I was so excited to be able to bring her on here. She's been selling and coaching for over five years and she has experience and lots of knowledge to share. So I'm super excited. I'm going to go right into it with her because I have a list of questions right here, some that I got from other Amazon sellers who are like, if you're talking to her, please ask her these questions. So I'm super excited to have her here. So, Karen, thank you so much for staying up late for me.

Not at all. You're more than welcome. I'm delighted to be here. Thanks for having me.

So tell me how you got started selling on Amazon.

I guess we started the same way as a lot of money sellers. It was something of a side interest. We initially started to just kind of break into this new emerging market and we started testing different products, eventually got to the stage where we were manufacturing our own products, private labeling them, and we started in the U.S. we started in the UK and then we eventually expanded into the other European markets. So much like everybody else on this call, it was a lot of trial and error at the start, a lot of learning as you go along, a lot of trying everything that the gurus are telling you is the best way to do it.

Which doesn't always work out, right?

Exactly. A lot of going through different conflicting information that you're getting from different people trying to find out what's the best way to do it for yourselves. So that's really how we started. And then as our business grew, it became more and more time that we spent on it and from there, it's something that we spend the vast majority of our day on now.

So how robust is the UK and European markets compared to the us it's.

An interesting question because what's happened is obviously the US market is quite developed. A lot of Amazon products that they bring out themselves in terms of the services that they provide to both customers and to us as sellers are all tested in the US and then sometimes they're parallel tested in the uk, sometimes they're not until they've been tested and trialed in the US and then they're brought over to the UK and Europe. From a selling perspective, certainly when Amazon started encouraging a lot of the the US sellers into the European market, what they did was they encouraged them. And because of the language, what happened was a lot of the US sellers went on to the uk. First of all, it seemed easier, right? Yeah, exactly. And from there then they scaled up into the rest of Europe. Now, as you know, the UK and German market combined are the second largest Amazon marketplace. So it does speak to a huge potential for other sellers coming into those markets.

Wow, that's so interesting because I hear from a lot of Amazon sellers who are like, you know, while they're encouraged by the UK market and they think it's a little bit easier because, yes, English speaking and all of that, it's not all that dissimilar from what goes on in mass market. And so we see the same exact thing because I've done the majority of my work with Costco and Walmart and Target and places like that and they do the same thing as they test first in the U.S. and then if it's working, they start to explore Canada and UK next and then from there they'll try Australia and then from there they'll go German. So it's really interesting that the flow of the way that it goes. Oh, Japan is another one. When they do Australia, they usually test Japan. And so it's kind of an interesting way that retail kind of expands. And why should Amazon sellers be any different?

Exactly, exactly. Now, there are a few hazards to take in mind. I mean, Amazon is very much.

I was hoping you were going to.

Hit on those.

Because something as simple as a language doesn't necessarily mean that it's the ideal market for you to be scaling into. A lot of products need changes to them in order for them to perform well in Europe and the uk.

Well, there's standard differences, like we used to experience that because I used to do a lot of office chairs and there's much higher fire standards, much more equivalent to California because California has strict standards, but there's a lot of that. So if you've got upholstered goods, it's very, very different in UK and Europe.

Yeah. And even things like health products, there's certain products that would be allowed to be sold in the us, for example, that wouldn't be over in Europe or the market may not even exist for them. For example, I was speaking to a person recently who was talking about bear pellets, this product which basically repels bears out in the woods. We don't have many of those over here in Europe, so it's not something that certainly in the UK is not going to take off. So I think one of the biggest things that did happen when Amazon began encouraging sellers into the uk, into Europe, but especially into the uk, is a lot of sellers lifted and dropped their inventory and lifted and dropped their listings and they hadn't done enough research into whether or not the market was suitable, whether there was a desire or a need for that product in the uk. Yeah.

So, well, I think that brings up the question is like, how do you research and how do you know if your product's ready or if your brand is ready?

It's the first thing you should do whenever you're bringing a product to market. You need to research the marketplace.

Oh, you are speaking to the choir here, because that is what we lecture about all the time here.

Absolutely. And it's something as simple as we spoke about language. So you can have. For example, we have the same product in the uk, in the us and it's called something completely different. So whereas in the uk, in our UK marketplace, we may be familiar with the name that it's called from the U.S. because, you know, we get a lot of American TV, we get a lot of American podcasts, so we might have a little bit more language flexibility in terms of the actual words that are used to describe things, then maybe goes the opposite direction. Like in the US may not have the same exposure to our different language. The specific words that we use, you're.

Sort of slang for things or terminology for things. Your keywords, if you're talking about that, are different because what you most commonly call it is not necessarily something we commonly call it.

Exactly. So the first thing you need to do is you do need to research the marketplace, look into things like, obviously the usual things that you would do when you're doing any kind of research for a new product on Amazon, review your bestsellers, look at your new arrivals, your featured brands, and then the biggest source of information in terms of product development, in terms of what customers want, in terms of what they actually value, can be found in reviews both negative and positive, and obviously in seller feedback.

So that's not that dissimilar. It's just using the other marketplace and really screening through that other marketplace. Not assuming that you know all of that ahead of time.

Exactly.

And then use your metrics. Again, guys, I'm going to say that because you set metrics when you first looked at your sku, just because it's going well in the us, don't assume when you're like, I don't see quite the same mix, but it's doing so well over here. It'll be fine. It may not be fine for these reasons, Karen is pointing out.

Exactly. And as you mentioned, the different product standards in your target country. So, for example, you mentioned about upholstery, but you've things like your electrical plugs. So different from the US and the uk, and even from the UK to Europe is different. So that needs to be considered. Also the types of materials that can be used is another one. And then it comes down to is there a lack of the product that you're selling in the marketplace or is there a lack of demand for it, or is there an actual demand? So those kind of questions, the usual questions that you'd bring up when you're doing some product research entering any marketplace, is what you need to be looking at. Another thing that you need to be aware of, and this is something that you may not pick up directly in Amazon, but you can pick up from local websites, would be cultural differences. There could be something that is acceptable in the UK, but may not necessarily be acceptable in the us. In one respect, the US is more developed in terms of politically correctness than maybe we would be in the uk.

That's a nice way of saying that. That's a really nice way of saying, Karen, I love it. I'm saying that you guys are a little more accepting than we are of things.

So it might be something. And I'm talking in terms of how you look at your off Amazon, how you look at things like your social media campaigns. You do need to kind of be aware of things like that so that you don't build yourself up for something that you're not prepared for.

Oh, such a good point, Karen.

Yeah.

I mean, it's not just the product fit, it's every part of what you're going to do, how you're going to name it, how you're going to market it, how you're going to spread social media messages, how you're going to package it, what materials you've used. You know, how are you going to check that all again? So it's a really big undertaking to just say it's just not A plug and play. Oh, it works here, so it's going to work over here. That's just not how it happens. Then you know what I think is the other thing. So it's always been daunting to me as a designer because I design so many products and they do end up a lot of times worldwide, but it's not like it was purposefully designed. So I just got asked to do some work for a Polish company and I was like, you know, I don't know anything about the country, I don't know anything about the people, I don't know anything. And for me, that's critical to the design process because I want to deeply know that they're going to love this color that they're going to put in their home. Or, you know, I want to know that. Or I don't feel confident in my choices. And what I do, what I know is the American consumer really well. So other countries want to come here and do that. I get that. But it doesn't work really well going the other way because, I mean, part of my research that I do would be what are your big department stores and what other shops do you have that are popular and is this style trending and what are the big magazines that are read in your country? Right. And. And I don't have full exposure to that because I don't live there.

Yeah, that's it, exactly. That information is available. You do have to spend time. The one thing you have to be prepared for is that when you do move into a new market, it's not as simple as, just as I said, switching on your listings. It doesn't happen like that. One of the big differences that we find with US sellers coming into Europe is understanding something as simple as, as how the price is displayed in sales tax and vat.

Ah, yes, such a good point. Thank you for mentioning that.

Because in the us, sales tax is applied after. So you have your selling price and then you get your sales tax on top of that. How it's actually structured and how it's actually displayed on the Amazon European marketplaces is the price that's displayed on the listing includes your tax element. So, for example, you have a product that sells for ten pounds in the uk, what you will actually see displayed on the Amazon page is £12, because £10 is your net price and then £2 would be your 20% VAT. So whereas in the US what you would show is your $10 and your sales tax would be added on through your checkout process. Right.

Sometimes. And See, that's the confusing part. So we're in a little battle here in the state of California against Amazon here, which hopefully will end up in favor of U.S. sellers and California sellers in particular. It's very complicated because we have so many counties and all the other things. So the tax varies all the time. So for third party sellers to collect that money and then submit it to all the different counties is like a large undertaking. So we're battling that here. And one of the proposals that I've heard is to do it similar to the way that you do it with a vat, so that the dollar amount would actually already include that. But Amazon would pay it on behalf of the seller.

Yeah, now that's not really fully how it works over here, because what happens is while the price is displayed and while you are paid, basically what you end up in your bank account. So when Amazon do their payout from the European listings, you would have the same as what you have in the us, Your product costs and then all your Amazon fees, your advertising costs. If you're paying it through your seller account, those type of fees would all come out. But VAT is not withheld by Amazon, so you get paid. You have to keep that separately and build a fence around it so that it's not used for something else. Because when your tax is due, you have to pay it on time. So the figure that you get into your bank account is obviously inclusive of vat. So you do have to factor that in and remember that when you're looking at your cash flow and say, great, I have more than I expected to have.

But this is where we highly recommend second accounts, tax accounts, which we have here set up all the time in the us and money can be automatically transferred and all of those things. So just be thinking about that, guys, because this is really important.

So let's just tap, because we're talking about taxes and other things. What are the risks of Brexit? We're getting a little like, interesting news over here, back and forth. What are the risks with Brexit happening?

Amazon are saying so little about it because they can't commit to something until they know what the actual Brexit will look like. So with Brexit, what's happening is the UK have voted to leave the European Union and that will happen at the end of March next year. Now, for the past two years, or the best part of the past two years, negotiations have been ongoing between the UK and the European Union to determine the agreement that post Brexit would look.

Like so what it looks like, how it happens, who pays what like. Yeah, exactly.

So the agreement of what it will look like has been made, but it needs to be voted upon by first of all the uk. Then it has to be voted upon by the European Union. Then it has to go through many different stages in order to be accepted, I suppose is the word. If the agreement that has been agreed already is accepted, what will happen is there will be a two year period in which the UK as a whole, so that includes Northern Ireland as well as the island of Great Britain, will remain part of the customs union. Now the customs union is important because if it remains part of the customs union, that means it remains within the conditions for selling and moving goods into and out of the uk. Now if they don't accept the agreement, the theory is that they would renegotiate an agreement before the end of March. Now the third option is that no agreement in how trade will look after Brexit is made at that stage, that would mean that the UK is immediately out of the EU at the end of March next year.

You guys got a lot on your plate. But does this really have any effect though on a seller selling into UK and Germany? Let's say, I mean, do we store our inventory and goods in one central location so it gets cleared through customs? Does that matter?

It does matter. And this is one of the things that you have to consider now. If you think about how many US sellers have moved into Europe at the moment they have gone through the uk, that has meant for a lot of US sellers is that they have moved stock, they've moved inventory into the uk. So they're either storing that off Amazon in other warehouses or they've shipped it directly into fba. Now what they have done then is when the goods have come into the uk, they've paid import vat. As the goods are leaving the uk, they're transferred to other European countries. Whether it's to a customer in Germany, there's different program that you can use within seller central. So for example, if you use pan European fba, what that means is that you bring in your inventory into Amazon's FBA network and they then move it to their European fulfillment centers. So all of your stock is moving across borders, it's moving through Germany, it's moving into the Czech Republic, Poland, France, Italy and Spain. At the moment that's not a problem because there's no borders between those countries because they're part of the European Union. As soon as the UK leaves the European Union, if they're in a situation of what we call a hard Brexit, which means that there is no agreement in how trade will be maintained. You immediately have a border built up between the UK and Europe, which means that you are now exporting goods from the UK into the European.

So you've exported them from the US to the UK and then from the UK somewhere else. So now you're getting hit with taxes again.

Exactly. And you're getting hit with paperwork and you're getting hit with delays at port and you're getting hit with transport costs.

Oh, gosh. Well, we're going to keep our fingers crossed over here and say a few prayers for a soft Brexit for you, because that doesn't sound good for anyone, especially you guys.

Of course, there will be contingencies. Like if you've already imported your goods into the European Union through the uk, there will be measures made by HMRC which would allow those goods to be moved into. To move freely into the European marketplace. Of course, it won't be, close the doors after us and, you know, the gates come down with a clang. There will be measures in place, but it just makes things a lot more complicated. It can mean that there will be delays. Now, I'm speaking about the worst case scenario, the one we're all crossing our fingers for, is that we will have this transition period, which would be for two years after Brexit. In that situation, there will be no difference into how we're trading. There'll be no difference in how goods are moving through the UK into Europe. But what that does give us is two years then for people to work on their supply chain, to work on where they will store the goods to. To work on building up relationships with freight forwarders throughout Europe or with warehouse networks throughout Europe so that they can move their inventory through a different supply route into the European marketplaces.

Well, Karen, in case we've scared anyone off, I would love to talk a little bit about what your services are, because this is what we're really here about. And this is why I wanted to bring you on the show we're really here about at product launch. Hazards is making sure that people are aware of the resources, the. The right things, the right order and the right resources is our motto here. Because those things make things flow, they make things faster. They accelerate your business, grow your brand faster. They do all of those things. You are one of those resources. Tell me a little bit about the consulting and agency services you have, because it sounds like we need some hand holding here.

Our Agency has really come out of what we've seen as a need. The kind of questions that people are asking are ones that we know the answers to. Number one, because we're from this marketplace, we're very familiar with how it works. VAT is something we deal with. Every single purchase we make has these VAT implications. But also my own background is in indirect taxes. I've worked for multinational companies looking after their indirect tax reporting, their VAT submissions, all of that. So this is my background. What you need to think about in terms of Europe and what you need to think about in terms of you're de risking your move into Europe. It's all to do with your inventory, like where you store goods. It can trigger your VAT liability, as in your obligation to register. And it can also the volume of sales that you make into a country can trigger your VAT registration requirements. So you need to be aware of how you are going to fulfill your customer orders and where you think those orders are going to go. Are they going to go through Germany, are they going to go to France? You know, are they going to go to the uk? And then you need to contingency plan for that. So how you're going to fulfill your orders and where your stock is going to move from and to does the.

Type of product matter in that as well?

Generally speaking, goods are taxable, they're VATable. So it depends on the type of product. I mean, I don't want to say. It's not that I can't say. I don't want to say one size fits all. It's not like that at all.

It's not quite that, as you know. Yeah, no, no, it's not that simple here either.

So.

But no two Amazon sellers are exactly the same. They do not have exactly the same inventory, they do not have exactly the same type of product. So what I would encourage sellers to do is when you have questions, just get in touch with us. We're happy to answer questions in a lot of cases. It's the same type of questions that are coming up. I know you have the details of our website and on that Contact Us page, what we've done is we've set it up in such a way that we ask what is your most important question about entering into the European marketplace? The second question then is why did you come looking for an answer today? So in that we're getting 80% of our questions relate to this area and then we can determine what's the best approach for 80% of the people who are in touch with us.

That's amazing. That's great, Karen. But you also do more than that, right? You do, as we were talking earlier, like some of the advertising and social media messaging. You can help optimize that and do some other things as well on the sort of front end, right?

Yes, absolutely. Absolutely. Especially in terms of language, if you're moving into other European marketplaces. If you think about it, your keywords, they're not a direct translation from one language to another. We touched on that earlier in terms of, you know, the specific keywords that are used in country. But as you know, when you're building your listing, you refine your listing, you come across new keywords every month as you're going through your search term report, for example. So the initial stages of building your listing so that you're getting conversions. And again, it comes down to cultural differences, even in terms of how you present lifestyle images on your listing, that can have very different look, how you present something to a German seller as opposed to how you present it to. To a UK or the US or an Italian seller or Italian buyer, I should say, not a seller. So everything that you consider for a US seller, you need to consider that, but you also need to be aware that there's differences that you can't just lift and drop.

Do you offer product evaluations? So if somebody said, I think I have this line of products, this brand, are these a fit? Can you help them evaluate that?

Yeah. What we would say is that the person who's selling the seller knows their product inside out. As you mentioned, you've designed the product, you're familiar with the product, you're the person who knows the product inside out. So we would work very closely to make sure that our understanding of the product and what you're trying to get across as the main benefits, the main features of that product are brought across. The other thing that I think a lot of sellers would like to know is, will the product actually sell once it gets into Europe?

Right. Will it sell? Is the big question here too.

Yeah, it's like, because what happens, you order a quantity because your manufacturer says you must order this amount in order for us to manufacture it for you. So you're saying, do I take a chance and order that amount? So what I would suggest that you can actually do is one of the services that we can provide is that we would act as a reseller for your product.

Oh, so you could market test it for us. I love that, Karen. That fits totally our model here because we're all about what we call market proof first. So we want to know that the dogs will eat the dog food and the owners will buy it. That's what we say here. Wonderful. Well, that's a great service, Karen. Thank you for letting us know about that.

Obviously, there's conditions on what type of product we would take on. We're not going to take on a three star product and try and sell it as a five star product because it's our listing, it's our seller account. So we would be very diligent in how we approach those products and how we work with sellers to make sure that we're representing their products to the best that we can represent them into Europe.

So, Karen, I think we could talk for hours on a bunch of things, different areas and global selling and all of these other things. But, you know, I think we need to have you back again, especially after we get some more sort of results on Brexit and we start to see what's going on there. I think we should have you back on pretty regularly. And so I'm going to do one thing, guys. I'm going to put in the link to Karen's company and to her website and everything. I'm going to put a tracker code, okay. And I'm not watching you. What I want to see is I want to see how many of you have interest and are listening to this podcast because I don't know who you are because unless you're on my email list, I don't really know you because you're listening passively or actively on your end, just passively on mine. So if you guys would please go to the blog post for this episode or go to Karen's profile, which will be created in conjunction with this episode and you can click right through to our website and do all of those things. But I'm just going to put a track record in there to see how many people are clicking through so we can watch Karen and see do we have a large interested audience. And if we do, let's have you back on a regular basis because I think there's just so many questions that we can ask. So that's the other thing I want to invite you to Product launch Hazard listeners. I want you to invite you to send us some questions that you would like us to ask Karen as well in our next interview.

I'm very happy to answer questions. And we've all been a new seller. We've all been afraid of the simple question that sounds too simple to ask. But I really mean this Ask any question you have, because sometimes the simple question that you're afraid to ask will determine the course of your next move. So don't be afraid to ask the questions. What we will eventually get to the stage of doing, as I mentioned, we're asking, what's your most important question to ask about moving into Europe? What we'll do is we'll start putting together blog posts and different content that specifically addresses those issues. Right now we're at the stage of what exactly? Like, we know there's a need there, we're aware of it, and we're willing to open the ears and answer whatever questions you have. So do just keep questions coming. Keep them coming. Keep them coming.

Okay. That's awesome, Karen. Yeah, you know, this is what we're all about here at Product Launch Hazards because that's why we give you our resources so freely every month and why we do a lot of live streams. Although we're not live streaming this one because the time change and recording and Karen could be on video. This one is recorded in advance. But very often we do livestream them because that gives you an opportunity to interactively ask questions right at that moment. So next time we do with Karen, we'll see if we can get a live stream organized and maybe ask some of those questions and I'll have some prepared that came from the community and then we'll livestream and ask and get some more people to ask even more questions live because that would be really efficient for everyone, you and them included. But I believe in getting these questions answered earlier because when you know the answers to them, then lots of other things that you're going to plan won't require you to redo. So Karen, thank you so much for joining us today. I really appreciate it and look forward to having you back again. Product Launch Hazards we will be back next time with another episode, but remember that this blog post is at productlaunchhazards.com and on social media has design. So thanks everyone and we'll be in touch next time.

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