In conversation with Otaro
“Expanding to Amazon.co.uk offers potential for revenue growth but has to be tightly controlled to ensure
that the business remains profitable in the long term.”
that the business remains profitable in the long term.”
Adrian & Roman
Founders of Otaro
Otaro is an experienced Amazon seller based in Hassloch, Germany. They have been selling sports bags on Amazon.de since 2018 and decided to expand to the UK in 2024.
Tell us about your business and how your Amazon journey began in Germany.
We are a young company that specialises in innovative sports bags for tennis, skiing and hiking. We were founded in 2018 and started selling via Amazon FBA. We were already active in the UK before Brexit, but shipping the goods was becoming increasingly difficult. Since the end of last year, we have been focussing more on the UK again, with the help of Amazon's new programme.
What inspired you to expand to the UK with Amazon?
Our decision to expand to the UK with Amazon was inspired by a thorough analysis of the search volume for our keywords in various countries. This analysis showed great potential for our products in the UK, which prompted us to focus specifically on this market despite the uncertainties surrounding Brexit.
We then quickly started to offer our products in other European countries and in the UK, which increased our sales growth by around 20%. Even so, profitability was difficult there at first. Overall, profits are still higher in Germany, as the conversion rates are lower despite the localised offers. This is an area where we want to carry on improving.
We then quickly started to offer our products in other European countries and in the UK, which increased our sales growth by around 20%. Even so, profitability was difficult there at first. Overall, profits are still higher in Germany, as the conversion rates are lower despite the localised offers. This is an area where we want to carry on improving.
On Amazon.co.uk in particular, we saw great potential for our products, which is why we focused specifically on this market despite Brexit.
How did you manage to deal with the requirements and regulations in the UK?
We were supported by Amazon and at the same time carried out extensive research on how to successfully deal with the product-specific requirements and regulations in the UK. Amazon's support and guidance were extremely helpful. However, we had to figure out many details ourselves to ensure that our products met all the relevant standards.
Targeted Google research and dialogue with our network gave us additional important information to ensure that our products fully meet the requirements for exporting to the UK.
Targeted Google research and dialogue with our network gave us additional important information to ensure that our products fully meet the requirements for exporting to the UK.
How did you deal with the issue of tax and VAT? Did you have outside assistance?
We used Amazon VAT services, who brought us together with AVASK as a tax partner. With AVASK's expertise and support, we were able to successfully overcome the tax and logistical challenges in the UK. By working together with Amazon and AVASK, we were able to understand and smoothly implement the necessary processes — a decisive step towards successfully offering our products in the UK.
How did you deal with product compliance and the requirements and regulations in the UK?
Whenever Amazon notified us of new EU rules or regulations, we immediately worked hard to fully implement them and ensure that all requirements were scrupulously complied with. In addition to the information provided directly by Amazon, we actively researched in Amazon-specific forums to learn about the experiences of other sellers in order to avoid potential pitfalls and identify best practices for implementing the regulations.
We also regularly consulted our tax advisor to ensure clear interpretation of the requirements, particularly with regard to important UK tax and legal aspects. This helped us make sure that our products and processes were properly adapted.
In addition to the information from Amazon, we also checked official UK documentation and regulations to ensure a sound basis for our changes. These included product compliance documents and specific tax regulations required for exports to the UK, for example.
We also regularly consulted our tax advisor to ensure clear interpretation of the requirements, particularly with regard to important UK tax and legal aspects. This helped us make sure that our products and processes were properly adapted.
In addition to the information from Amazon, we also checked official UK documentation and regulations to ensure a sound basis for our changes. These included product compliance documents and specific tax regulations required for exports to the UK, for example.
What are your supply chain and inbound logistics like?
Our supply chain starts with our goods first being imported from our manufacturer to Germany and then shipped onward to the UK. Initially, we tried to organise forward transport in cooperation with UPS and Amazon, but it didn’t work out as planned. Amazon then proactively drew our attention to the ATS solution (Amazon Transport Service).
After some challenges at first, we managed to successfully implement the process. We have now shipped goods to the UK three times. Usually, the goods are posted on the UK marketplace about three weeks after being shipped from our warehouse. Although the first shipment with the ATS solution was a bit more complex, especially when putting together the shipment details, all the relevant product compliance and contact information is now automatically saved, which significantly reduces the effort for future shipments.
After some challenges at first, we managed to successfully implement the process. We have now shipped goods to the UK three times. Usually, the goods are posted on the UK marketplace about three weeks after being shipped from our warehouse. Although the first shipment with the ATS solution was a bit more complex, especially when putting together the shipment details, all the relevant product compliance and contact information is now automatically saved, which significantly reduces the effort for future shipments.
Do you use customs and shipping solutions on Amazon to import into the UK?
All customs clearance is handled by AVASK. Through the online portal, we can create goods invoices for import and export to the UK and process all customs documents. This is a well structured process, and although it’s somewhat more time-consuming than importing into EU countries, our small team can now easily manage it. We are guided by the Amazon workflow, which has been continuously optimised over time.
Initially, there were frequent error messages as additional information is required for the UK. We recommend carefully checking and updating the product data in advance to avoid these errors. The integration of AVASK in Seller Central is completely automated and saves us a lot of work, because expansion to the UK would not have been possible at all without AVASK.
In the last twelve months, we've seen significant improvements throughout the process. Because we are expanding to the UK relatively early, we faced some challenges during the initial phase. For example, we had problems with our first shipment to the UK, but the next one was already much smoother, and there were even more improvements with the most recent one a few weeks ago. These developments make us very confident about the future.
Initially, there were frequent error messages as additional information is required for the UK. We recommend carefully checking and updating the product data in advance to avoid these errors. The integration of AVASK in Seller Central is completely automated and saves us a lot of work, because expansion to the UK would not have been possible at all without AVASK.
In the last twelve months, we've seen significant improvements throughout the process. Because we are expanding to the UK relatively early, we faced some challenges during the initial phase. For example, we had problems with our first shipment to the UK, but the next one was already much smoother, and there were even more improvements with the most recent one a few weeks ago. These developments make us very confident about the future.
What is your advertising and marketing strategy? What are the most important tools you use?
Our advertising and marketing strategy is based on identifying what’s lacking for various sports, particularly when it comes to practical but attractive bags. We have developed high-quality, robust products that clearly stand out from competitors and discount solutions. This differentiation has enabled us to build a loyal fan base who recommend our products — mainly by word of mouth.
Our pricing strategy is based on the market prices of our competitors, as there is intensive price competition on Amazon that we cannot avoid.
Our pricing strategy is based on the market prices of our competitors, as there is intensive price competition on Amazon that we cannot avoid.
Our high-quality, long-lasting bags clearly stand out from the crowd and from discount products. Their quality and uniqueness has gained us a loyal community and a solid customer base on Amazon who enthusiastically recommend us.
Do you see a significant difference between customers in the UK and the European Union?
Yes, we have found that British customers are more willing to pay for high-quality products than customers in other European countries.
How do you decide which products to sell in the UK?
We offer our full range in both the EU and the UK. Because we didn't know exactly how UK consumers would react to our products at first, but the search volume was promising, we decided to offer our whole range. If an SKU isn’t working, we'll stop shipping it to the UK.
It’s an additional effort to keep an eye on the warehouse in the UK and ship the items there. The costs are also higher than in the EU due to the special measures, but at present we can price higher, which allows us to sell at a profit. The managing director initially put in around three 40-hour weeks to support the market entry.
At the beginning, the costs were disproportionate to the benefits, primarily because of our cautious approach to entering a new marketplace. It’s better to start gradually and see how the product develops. We saw the initial phase as an investment and trusted that the figures would improve over time. The UK is one of Amazon's biggest marketplaces and is similar to the German market in many ways, particularly in terms of consumer behaviour. This similarity has helped us to stay focussed and move on despite setbacks. We have seen that patience and perseverance pay off in the long term.
It’s an additional effort to keep an eye on the warehouse in the UK and ship the items there. The costs are also higher than in the EU due to the special measures, but at present we can price higher, which allows us to sell at a profit. The managing director initially put in around three 40-hour weeks to support the market entry.
At the beginning, the costs were disproportionate to the benefits, primarily because of our cautious approach to entering a new marketplace. It’s better to start gradually and see how the product develops. We saw the initial phase as an investment and trusted that the figures would improve over time. The UK is one of Amazon's biggest marketplaces and is similar to the German market in many ways, particularly in terms of consumer behaviour. This similarity has helped us to stay focussed and move on despite setbacks. We have seen that patience and perseverance pay off in the long term.
How long did it take for your expansion to be profitable? Can you share any valuable insights you've gained along the way?
Particularly in marketplaces outside Germany, profitability is often a major challenge, as consumer behaviour and price sensitivity are very different to what we are used to in Germany. In the UK, however, we became profitable within a very short space of time, as we tend to be able to get the same or even higher prices there.
What is your summary and key advice for selling partners who are setting out to expand into the UK?
Ultimately, expanding to the UK offers many opportunities, but also requires careful planning. If you want to sell abroad, it is crucial to calculate exactly whether the expansion is really worthwhile. It is especially important to spend time on translating listings, images and keywords, as automatic translation tools often fail to come up with the appropriate terms. This means thorough, country-specific keyword research is essential.
The expansion offers great potential for revenue growth, but requires continuous monitoring to ensure that the company stays profitable in the long term. Our most important piece of advice is: Believe in yourself! The UK is a huge e-commerce market with a lot of potential. Our sales have started successfully, and after the first shipment, the processes have been significantly simplified.
The expansion offers great potential for revenue growth, but requires continuous monitoring to ensure that the company stays profitable in the long term. Our most important piece of advice is: Believe in yourself! The UK is a huge e-commerce market with a lot of potential. Our sales have started successfully, and after the first shipment, the processes have been significantly simplified.
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