In conversation with Woldoshop

A few years ago, we started selling private label items on Amazon. We started out as a small team, but we were still able to handle an impressive 15–20,000 packages a day. This was possible thanks to our efficient, automated processes and the use of Amazon as a service provider for shipping our goods. This combination enabled us to handle high volumes with a relatively small team. Our business continues to grow strongly, particularly internationally. Amazon supports us enormously in this respect by helping us to expand into new markets. The platform not only provides the infrastructure but also valuable tools and resources to scale our business globally. This enabled us to further expand our international business and reach new customers worldwide.

Our decision to expand into the USA was inspired by several factors. First, another retailer, who has already sold successfully in America, impressed us with the size and potential of the market there. This inspiration led to several discussions and phone calls with other retailers who had also had positive experiences in the American market. The ability to adopt reviews globally was also a decisive point. This means that the reviews that our products have received in Germany are also visible in the USA. This gave us a significant advantage, as we were able to build up a positive reputation before we even entered the American market. This combination of market potential and the ability to use existing reviews is what ultimately drove us to expand our operations to the USA.

We made the decision to expand our business to the American market in December 2023. After receiving tax advice from Rödl & Partner, we were able to set the ball rolling back in February. Sales got off to a flying start, and in just the second month we were able to see how our products were doing financially there. We have also expanded within Europe, including markets such as Spain, Italy and France, and smaller markets such as Belgium, the Netherlands and Sweden. We see great potential in these countries, as tax hurdles and language barriers prevent many retailers from expanding there. Our approach was to overcome these challenges and in doing so give ourselves a competitive advantage. Before turning our focus to the US market, we had previously gained experience of expanding into other European markets to ensure that we could develop the necessary processes and strategies to ensure international success.

At first, we considered letting our business in the USA run through our German company. However, we quickly decided to establish an independent company in the USA and also to open an office there. We made this decision because it was more beneficial for us to separate the processes and clearly distinguish them from the European operations. Our US company is therefore independent of the German company, which allows us to work more efficiently and better meet specific market requirements. We have also employed a local team, which works separately from the German structure. This autonomy enables us to respond more quickly and flexibly to market needs in the USA while ensuring clear organisational structures and responsibilities.

We have established a highly professional presence in the USA thanks to Rödl & Partner. We were already familiar with this service provider from Europe and knew that this company had successfully supported both large and smaller companies in their expansion into the USA. The experience and expertise provided by Rödl & Partner has helped us to navigate the complex tax requirements in the USA and to ensure that we are complying with all legal requirements. We founded the company itself through Alton, a company that we have also known for several years. Here, too, we were able to draw on proven partners and their comprehensive expertise to ensure a smooth start for our business in the USA.

We have dealt intensively with the US market and made sure to have a strong partner by our side. We use a specialised service provider to thoroughly test every product before launching it on the market in the USA. This allows us to ensure that all legal requirements and regulations in the USA are met. Of course, this process is not easy at the start and is also very expensive. Nevertheless, after just a short period of time it became clear that these were worthwhile investments. The expertise that we have gained significantly expands our capabilities within the company and ensures that we can expand into the US market in a sustainable and legally compliant manner.

We only work with tools to a limited extent and instead rely on our own processes within our company to create individual listings. Thanks to our international experience, including in Great Britain, the hurdle here is not too high. All items are created manually using the Amazon system. This manual creation is still very important to us today, as it allows us to explain each product with deep understanding and specific expertise. We believe that this personal approach makes a significant difference and allows us to provide our customers with detailed and accurate product information.

Translations are done in-house. As for the images and product detail pages, we use our existing products from the UK and simply adapt them for the US market. We don't use any special tools for this either. Instead, we archive information that already exists on Amazon, such as reviews, and analyse which information is important to the customer. All products and images are created based on these reviews and information. This ensures that the content is not influenced by the individual interests of an employee, an agency or the person who creates the images. This is a key difference and an aspect that sets us apart from others. Our goal is to address the needs and questions of our customers as best we can and to provide them with precise and relevant information.

To start with, we produced our products here in Germany because we know that they are good quality and know what is important. We then brought these products to the USA with our partners UPS Freight and DHL Express. For parcel shipments, we use DHL Express, while for pallet shipments we have developed a special process with UPS, which enables us to deliver pallet shipments to America within 5–7 days. Since we produce many of our products ourselves, air freight costs are not such a big deal for us. We have worked together with DHL Express to develop a workflow that enables us to create shipments and customs documents quickly and efficiently. We ship our products via a combination of self-shipping and Fulfilment
by Amazon (FBA). Self-shipping gives us control over the entire process, while Fulfilment by Amazon allows us to benefit from Amazon’s logistics infrastructure and the ability to reach a larger customer base. This combination gives us the flexibility to respond to different requirements and market
conditions.

We received support from our logistics partners, UPS and DHL, for the handling of customs and import regulations. Both companies offer established processes that can be used by their customers to ensure compliance with regulations. This support was invaluable in helping us to make customs clearance efficient and smooth, which was particularly important for a quick and successful entry into the US market.

We have a return rate of around 1.2% for our products. Due to this low rate, it is no problem for us to have the returned goods destroyed by Amazon for a fee. This is an efficient solution that allows us to keep the costs and effort involved in managing returns low.

We received support from Amalyze to enter the market in America. With their help, we were able to set goals for our campaigns at keyword level. By using our internal data, we have developed a marketing strategy that works very well for us. However, it is not our goal to grow primarily through marketing, but through organic sales and providing better products than the competition. We don't believe in long-term growth through intensive marketing. Our approach is that a product must be cost-effective after 3–6 weeks, after which time we reduce marketing expenditure. Our focus is on the quality of our products and customer satisfaction, which leads to sustainable and organic growth.

We have not yet collected enough data to provide a meaningful answer to this question. However, we think we'll be able to spot differences after around 6–12 months. Should there be significant differences, we will of course incorporate them into our products and strategies.

Our decision as to which products to sell in the USA is based on the knowledge we already have within the company and whether we will be able to successfully sell these products in America, too. First, we scan the market and check whether similar products already exist. If so, we analyse whether these products meet customer needs or whether there are opportunities for improvement. Based on this information, we then decide whether a product will be produced and whether it would offer real added value for the customer. We avoid entering into a price war with existing products. We do not market products that already exist and for which a price war would be inevitable, and we do not offer these in America. Our goal is to offer our customers innovations or significant improvements in order to benefit from them in the long term.

After entering the market with each product, it took us around 5–6 weeks until our expansion was profitable. As soon as we achieved profitability, we reduced marketing costs and were therefore immediately able to act economically. One valuable insight that we have gained along the way is the importance of efficient and targeted marketing in the initial phase. It is crucial to quickly achieve a stable market position and then adjust marketing spending to remain profitable in the long term. It is also important to focus on the quality of the products and offer customers real added value instead of getting involved in price wars.

We plan to quadruple our portfolio by the end of the year. We have already established the products on the European market, so we mainly have to review and implement the legal aspects in order to be able to list these products in the USA as well. We see 3–4 times greater potential in the American market than in Europe, which we would like to achieve in the next 12–24 months. Our goal is to grow significantly through expansion into the US and to strengthen our market presence.

If you want to launch in the US, you need to have all your legal bases 100% covered. No long-term concepts or the like should be developed, but a clear plan that is implemented immediately the next day. The US market is incredibly interesting, particularly for European sellers, and this potential is often underestimated. The German market is very demanding due to strong competition and price sensitivity, especially if you don't have any unique selling points — a problem that affects many private label suppliers. This often leads to intense price wars. We therefore attach great importance to developing and adapting our products to the needs of customers in order to meet those needs in the best possible way. My most important advice for selling partners: Be prepared to act quickly and decisively, and focus on creating real added value for your customers. This is the only way you can be sustainably successful in the US market. You should also obtain sufficient information and the necessary expertise in advance, as already mentioned above, for example with respect to punitive tariffs.