Why Chinese Sellers Dominate Amazon – Part 1

Part 1: Market Approach

The focus of this and the next two parts of the article will be to highlight the differences in approach, strategy, and culture that is allowing Chinese sellers to beat out their American counterparts. There will be some mixture of topics between the articles as this is inevitable when looking at the big picture.

The first topic we’ll discuss is Market Approach.

Speed

The gung-ho “shoot first, ask later” attitude typically attributed to the US is ironically the Chinese approach to not just Amazon, but almost all business.

The most obvious thing to mention is that the accessibility of goods in China is just going to be easier than it is than if you’re operating in the US. The fact that Chinese sellers have quick access to their goods means their process is very streamlined. This speed allows quick market adaptation when it comes to maintaining or launching products.

The idea of a successful product is different in China and that means the template to launch a product is going to be much easier than the typical US seller. By getting rid of this red tape, Chinese sellers can put a product to market before the typical US counter part has even finalized their plans.

Being in China also means you’re able to complete more of the necessary steps before shipping out of country. Having your products ready for FBA warehouses and shipping directly from China means quicker onboarding,which helps again not only with launching new products, but maintaining inventory for existing products.

The ability to negotiate with suppliers or shippers to help you in applying UPCs or FBA carton labels means you can cut out steps in the logistics process, not only increasing the speed of processing, but also cutting down your costs. Here are some examples of different logistics processes.

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Research

As stated above, quick market adaptation on sourcing also means keeping an eye on the market. Speed also applies to the research portion of a product. Chinese sellers look at products mostly from a numbers perspective. As long as a product has the potential to be profitable as shown through research, it will be launched quickly. Due to the ability to save costs throughout the process, this means competitive pricing against existing or potential competitors.

Different from Western culture, Chinese sellers are obsessed with their competition. Chinese sellers will utilize any available tool to keep an eye on their competition’s listings. This can range from feedback, keywords, pricing, and many other aspects of a listing.

Chinese sellers will not shy away from copying features offered by competitor products. Nor will they shy away from outright copying an existing product. Western based sellers may see a problem with the potential lack of innovation and creativity, but this is not frowned upon among Chinese sellers.

Branding

Chinese sellers have recently embraced branding and with that, their ability to market their products has come to line with the general market. However, when choosing to sell a product, the branding is not the focal point like it may be with Western sellers.

The old marketing adage from the West in regards to branding is to focus your brand on a type of product or category. This doesn’t apply in China. As stated previously, this is a numbers game, if a product’s research indicates potential profit, Chinese sellers are not afraid to branch out to products far from their comfort zone.

A combination of both Speed and Research enables a Chinese seller to enter the market not only quickly, but competitively. Of course the logistics necessary to accomplish this means that the entire process of launching products in China is lacking much of the bureaucracy that is typically present in a US company.

In order to compete as a US seller, you’ll need to throw away a lot of the foundations and ideologies you’re used to when approaching the market. Being able to not only adapt, but to do so quickly, is monumental in your ability to compete.

Stay tuned for part two of this discussion where I’ll discuss many of the cultural differences that are giving Chinese sellers the competitive edge on Amazon.


This article was written by the Professor of Amazon who has been writing about Amazon since 2009. This is an alias used to protect the author from any unwanted complaints or inquiries. Please be aware that much of the existing and future information can be construed by many in the industry as an attack on their business models. As such, the Professor of Amazon has chosen to protect himself from any action.

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