Ep. 41: How to Expand to Other Markets

[00:00:00] Max: The most important thing that me or anybody else who thinking about expanding need to do is figure out is there a market for your products. It could be as easy as go to Amazon and look at your category. Let's say you're, you're selling coffee makers. Type in coffee makers and take a look. See how much are they selling for? What are the brands that you're competing against? Can you compete on the quality? Can you compete on the price? Can you compete on the listings? Is the listings showing the coffeemakers, are they good? Are they bad? Do they have a lot of images? Do they have video? If you see that there is opportunity, whether on a low end, or high end, then just go for it.  

[00:00:37] Andrea: So if you're considering expanding into a new market, the first thing you've gotta do is research. I feel like that's the first step to everything in business. But once you've decided that there’s a demand for your product, what comes next? Are there any differences between the way you present your product to different markets? And if yes, how do you figure that out? Let's talk about it.

[00:01:00] Host: Hi, This is Small Business, a podcast by Amazon. I’m your host, Andrea Marquez. This is one of our Minisodes, which are shorter episodes packed with helpful information for those of you who want a quicker binge. On this episode we'll be talking about how you can expand into different markets with Max Gurevich, President of Warm Home designs which is a business that sells curtains! Like most of the small businesses we feature on the show, you can find the Warm Home Design curtains in the Amazon store. Also, remember that if you want to hear your story on This is Small Business, we have a voicemail line where you can ask questions or share your entrepreneurial story. We want to hear from you! Find the link to the voicemail line in the episode description.  

Today’s episode of This is Small Business is brought to you by Amazon Ads. Amazon Ads helps you reach customers wherever they spend their time, and is here for every type of small business. Amazon Ads has a range of products and information to help you achieve your advertising goals, for registered sellers, vendors, book vendors, Kindle Direct Publishing (KDP) authors, app developers, and/or agencies.

[00:02:00] Max: So, originally, I'm a CPA by trade. So when I graduated at NYU, I was working for a big four accounting firm. I really liked the job, but I also liked playing poker. So, four years after working as a CPA I quit, I became a professional poker player. That was very fun. A lot of exciting things were happening, but poker playing usually happens during the night and during the weekend. And I thought I had some free time to try something new. So, I tried Amazon FBA. That was 2012. Amazon FBA was starting out, so I bought my first product send her in and it sold it like 24 hours. I made like $40. I was super excited, and I tried another product, another product, and mostly wholesale. So, it wasn't my product. Tried different categories and then I finally realized that there's an opportunity in home decor space, so I create my own brand, also made my own product, send it to Amazon and kind of build up from there. I was exclusively in US for, let's say two to three years. [00:03:00] And then, I saw another friend of mine was selling in Mexico and was very successful. So, I decided why not try that? So, I expanded into Mexico and then into Canada. So now we sell our products in three markets.

[00:03:15] Andrea: What are one of the top things that you have learned from expanding to [00:04:00] non-US markets that you think any business, regardless of what their product is, should know.

[00:03:22] Max: If you have a lot of reviews, take a look at the photos and see how people use, use your products. You have idea in your head how the product's gonna be used, but it could be completely different. This is actually a good tip, not just for international market, but also for American market. Sometimes people use your products in a very surprisingly unique ways that you, you would never think about it. So, for example, in our case, one of our products is a curtain. It's a short width curtain for like a small windows. It's just an okay product. It doesn't sell super well but in Mexico, it's sold relatively much better. And at first, I didn't really pay attention because I thought, you know, maybe there is more short, small windows in Mexico than the US who knows? [00:04:00] But then I looked at the reviews and look at the photos of how people using their curtains turnout. They're actually not using the curtains for windows at all. They're using them to cover the doors, the door frames. So instead of a door, they will use a curtain to cover another room or closet or something like that. So that gives you an idea of maybe you should present your listing a little different. Maybe you should create new images to show people, this is the way the product can be used. Or maybe you can create a completely brand-new product that's specifically designed for this purpose. So, if you understand how people use your products, you can expand or make the product better for specific markets.

[00:04:40] Andrea: Do you have different product listings for one product depending on what market it's selling in? Like for the example, in this case, those curtains that you just mentioned, does that listing look different in Mexico versus in the United States?

[00:04:55] Max: My descriptions and bullet points and a title looks different because you wanna present your product the way it's gonna be used, [00:05:00] it doesn't matter how you want it to be used, it matters how your customers use it. You wanna think of it not from your perspective, but from customer perspective. So, if the customer wants to use it that way, you should present it that way.

[00:05:13] Andrea: Did you run any other type of research to be able to figure that out, or was it just through customer reviews?

[00:05:18] Max: Don't be afraid to, to take a look at your competitors and see what works for them. Amazon presents a lot of information; they give you list of keywords that people use to when they do the search. You can look at other competitors listing and see how they use it. So, if, let's say you just starting out, you don't have any reviews yourself and don't see any pictures, but there's, there might be a competitor who has a thousand reviews. That means they have 20 or 30 photos available. So, take a look. Maybe you will see something that's unique and different maybe they're not presenting their listing the way the customer using it. So that would be a competitor advantage for you.  

[00:05:55] Andrea: So, Max, can you tell me about ROAS, or Return on Ad Spend [00:06:00] which is a marketing metric that measures revenue earned for each dollar you spend on an ad? What were some of the major differences in return on your ad spend and performance across these markets?

[00:06:12] Max: So when we started out in Mexico, the return on ad spent was significantly better, in Mexico than in the US. I'm guessing it's because the competition was lower and there was just less competitors in general, or maybe they were not focused enough on the Mexican market and focusing in the US. So because of that, ROAS was much better in Mexico than in US. That was 2019. Things have changed. The ROAS is converging towards US, so there is more competition, and people may be focusing more in Mexico, but there is still at, to this day, the ROAS is better in Mexican market than in the US market.

I think one thing that, our competitors not doing is running a video ad. Mostly, I assume it's because they already have the ads with the text in English [00:07:00] and it costs money to translate it, and run a new ad. So, we had a really good returns on, uh, video ads. Some of them are in Spanish, at least text, and some of them you don't have to have a text at all. If your product is compelling enough and you can create a video that's beautiful enough, then just a video of your product with a background, it would be a great ad.

I think the smartest thing that Amazon did with the ads is to make it basically the same as in US market. So people always, you know, scared of learning new things so if you make the, user interfaces, all the names and everything exactly the same, it would be easier for the advertisers to start advertising. Obviously in order to achieve really good results, you have to be proficient. But to start it out and to test it, and then try it, it's as simple as it gets. And that's a, I think that's a very good thing that Amazon did.

My thing is, you can learn, for months and for years. But unless you try it, [00:08:00] unless you failed for the first time, you will never learn enough. So just try, just set up a budget. It doesn't have to be a big budget because, you know, the cost per click is cheaper than the US so your budget doesn't have to be as big. Set it up, $10 a day budget, $20 a day, $50 a day, whatever you're comfortable with. And just try it out. Something doesn't work, then you change it and try something else.

[00:08:25] Andrea: When thinking about expanding to non-US markets, what are some of the language-considerations you think should be made?  

[00:08:32] Max: So I talked to some other people who also sellers not in the Mexican market. And basically what I'm hearing is says, well, I'm not a native Spanish speaker, so what if my grammar is not good? What if I translate and it would sound bad or embarrassing? And my reply is always, I'm not a native Spanish speaker either. I'm not even a native English speaker. So, my grammar is probably bad in the US market and in Mexican market, but you're not selling your grammar, [00:09:00] you're not selling your words, you're selling your product. If your product is good enough, if you price it competitively, if you create images and the video that present your product in the best light, your grammar doesn't matter, it's not what you write, it's what you sell that's important.

[00:09:15] Host: I love that we're ending with that. So if the language barrier is what's holding you back from expanding to other markets, remember Max's words. The customers are here for your product not your grammar. That was Max Gurevich, President of Warm Home designs. As always here are some takeaways on expanding to other markets:

• One. Research. Before expanding into another market, you need to figure out if there's a demand on the product you're selling. Also, this research will help you figure out how to write your listing and the best way to advertise to your new market. Max suggested looking at what your competition is doing and even looking through those customer reviews.  
• Two. The customer is always right. At least in their feedback. When you read your feedback and find that people are using your product differently [00:10:00] consider switching up the marketing to match what your product is being used for. Like what Max did when he found out that people were using his curtains as door covers.  
• Three. When it comes to your ROAS, or return on ad spend, and expanding to another market such as Mexico, Max suggests trying something small to test it out and see what those returns are. If you sell in the Amazon store, Max suggests taking advantage of running video ads and Amazon Ads is easy enough to start out and use. For more information on Amazon Ads, visit out show notes.  

That's it for this episode of This is Small Business Minisodes, brought to you by Amazon. If you liked what you heard, make sure to subscribe and tell your friends about us by sending them a link to this episode. And we would love to know what you think, so please please please leave us a review on Apple Podcasts. It's easier to do it through your phone. Or send us an email at thisissmallbusiness@amazon.com with your thoughts.

Until next time – This is Small Business, I'm your host Andrea Marquez -- Hasta luego -- and thanks for listening! [00:11:03]