This post is by Chad Rubin of Crucial Vacuum and Skubana.
Ever feel like your competition knows more than you?
One minute it’s going so well. You’re at the top of your product page on Amazon, reviews are flowing in and your biggest concern is getting the next batch of orders delivered on time.
But there’s a niggling worry. Little “what ifs” float around your head. What if a cheaper product comes along? What if I lose my supplier? What if the Chinese sellers catch on and start cutting out the middleman entirely?
Well, I’ve got some good news – it doesn’t matter what you’re worried about. Whether it’s low-priced competitors, direct-to-market manufacturers, or sources of new stock drying up.
In this post I’m going to explain why Chinese sellers are dislodging their rivals and dominating Amazon. I’m also going to show you exactly how they boost demand for their products, increase traffic and grow a following.
Sound good? Let’s dig in.
View Top Amazon Seller ToolsWhy are Chinese sellers dominating the market?
Chinese manufacturers are in a unique position when it comes to Amazon. They know what’s being sold, how much it costs, and where the market is. They’ve also got years of exporting experience.
There are arguments against, of course. You might ask, “How will they navigate the language barrier?” or, “How will they understand the American markets?”
These are fair questions. But let’s look at the facts for a second.
- Over 250,000 Chinese sellers joined Amazon’s marketplace this year.
- 31% of Amazon sellers are based in China.
Here’s a list of Amazon’s top sellers:
As the arrows show, four of the top ten Amazon sellers on the list are Chinese sellers. The other six sellers are all American and are primarily resellers, based in the US, with the exception of Spigen, who are an American private label seller.
But why is this?
Firstly, direct-to-consumer (D2C) was just a stepping stone. It only prolonged the inevitability of factory-to-consumer (F2C). The factories saw the brands that they were manufacturing products for were selling straight to consumers, and realized that they could manufacture their own, similar products and sell them direct to consumers at lower prices.
This is where the potential problems start for US sellers, because there are a few ways that Chinese sellers have a huge advantage over them:
- Sales Tax Deficit – While large Amazon sellers are held accountable for sales tax by aggressive states like Pennsylvania and California, Chinese sellers are exempt.
- Shipping Rates – Chinese sellers benefit from heavily discounted USPS shipping rates. The price to ship from China to Connecticut is the same as shipping from New Jersey to Connecticut.
- Reduced Taxes – Income tax? What income tax? The money’s already in a Hong Kong bank account before the tax authorities can blink!
By now, you probably get the threat that Chinese sellers pose, but what should you do?
Well, we’ve looked at what major Chinese sellers are doing, and there are a few practical tips that you can implement.
In particular, we want to look at one major success story. Enter Anker…
TIP #1: Focus on your BRAND
People don’t buy products. They buy brands.
Did you know that many of the manufacturers that supply products to big-brand companies also sell the same products to lesser-known, cheaper brands?
They’re the same products. But people are willing to pay drastically different prices because of the way they’re packaged. That’s the power of brands. Or, rather, it’s the power of trust.
If you can build a brand that people like and trust, you’ll immediately raise yourself above the competition. Just take a look at the rise in consumer interest for Anker.
Anker continues to expand without spending crazy amounts of money on advertising or marketing because of the power of their brand.
While Anker started off on Amazon, they have expanded to eBay, Walmart, Newegg, and AliExpress, as well as having their own custom-built website where you can buy direct. They sell multi-channel and multi-marketplace.
Let’s look at Anker’s Alexa ranking, which ranks businesses based on how much traffic their website receives. If you compare Anker to Belkin, you can see that Anker didn’t just establish itself as one of the top sellers on Amazon, it built a sustainable brand. While Belkin has a slightly higher ranking in America, Anker has a higher ranking globally.
While Anker have built broad brand recognition across the internet, they remain dominant in their category on Amazon. Just look at the sheer volume of search results on Amazon for the word “Anker”.
Building a brand allows creates trust. If people trust your products, they’re more likely to buy in the first place and keep coming back. This is great for sellers, as long-term customers drive a significantly higher profit margin.
