Season 1, Episode 95

Selling on Amazon Japan with Gary Huang

For Amazon sellers, expanding into international marketplaces is a significant and indispensable step for the growth of your business. In this episode, we discuss with Gary Huang, who is known for organizing the Seven Figure Seller Mastermind Conference taking place in Tokyo on April 4th and 5th, about the complexities involved in expanding into other regional marketplaces, and why it is crucial for Amazon sellers to consider Japan as a rising player in the market.

Show Notes

Transcript

[00:00:07] Chris: Hey everybody, this is Chris McCabe. Welcome back to Seller Performance Solutions podcast with Leah McHugh and Gary Huang, who I met, I believe in 2016.

So we’ve known each other six or seven years. I guess we would say you’re most recently known for the Seven Figure Seller Mastermind that’s coming up in Japan pretty soon. Now, about a month and a half away. Is that right?

[00:00:29] Gary: Yeah, definitely. We have a brand new event, it’s the first ever Amazon conference in Japan for Amazon sellers since Seven Figure Seller Japan Mastermind in Tokyo, April 4th to the 5th. Very excited about that. Thanks for having me on the show guys.

[00:00:45] Chris: Oh, of course. And Leah and I are gonna be there of course, in Tokyo, so we’re pumped about it too. Maybe taking a step back from that, how did you get started in e-commerce, but also the Amazon space?

[00:00:55] Gary: I got started in E-com a long time ago. I’m not gonna give you my life story , but basically, I started off on eBay. 2005. Selling women’s shoes, women’s shoes. So for those of you that, to remember that they come in the nineties, married with children. I was kinda like the online Al Bundy. I was women’s shoes online on eBay. So they weren’t fancy shoes. They were just like imported from China. These kind quirky Mary Janes. And they’re like, you know, this like niche culture of like rockabilly and people that love like Polkadots.

So that’s how I got started. They were imported from China. I knew a local wholesaler. I was based in LA at the time, my hometown. So that’s how I got started in e-com. Back then eBay was the biggest player, kinda like Amazon today. , Amazon did not exist at that time.

We had a very small warehouse I was sharing with my mom. She’s in the fashion industry, so I was self fulfilling. Go pick and pack. Yeah. We had a deeper printer. We were driving to the post office. I was driving myself. I said we, I had like a high school. I in a couple hours. I think every two days she would help me like pack the shoes and I would drive off to the post office.

I thought it was pretty cool. I held my little business, so that’s how I got started.

I did that for about three years and then 2008 came up and I made to Shanghai. The US economy was suffering with the financial crisis as everybody remembers. And China, it was like the Rising Star Beijing Olympics and stuff. So I made a move and I found a job in the corporate world, working in supply chain. So I worked for a small consulting firm sourcing. So I was the point person for my foreign clients. Literally I visited hundreds of Chinese factory, like from like the big fancy ones to like the really scary ones that may have some, like health code violations.

I put the e-commerce business on hold at the time cause it was very difficult to fulfill with myself being there.

I’m also fluent in Mandarin Chinese, and my family is from China originally. I was born in states and I majored in Chinese and it was kinda like my superpower. So I use Chinese a lot, handled multimillion dollar working campaigns for clients, really like many different industries. So it got a lot of experience with that. That’s chapter two, chapter three. I started listening to podcasts in like 2015, 2016.

And then I started getting back into e-commerce. I figured I’m on the ground in China, I can hop on the train to go to the factories. So I built a Amazon private label business with a partner, Apple watch band category. So we created a private label brand in that. So we built a six figure business within like less than a year. So that’s how I kind of got back into Amazon at that time. That’s chapter three.

[00:03:40] Chris: So I have a question on that. When you started selling on Amazon because most of what we’re talking about today is going to be about expanding into international marketplaces. You were on.com or you started with that, and then you went in the UK and then you tried Europe.

How did you look at, you know, I’m starting in USA or were you not even thinking in those terms?

[00:04:01] Gary: Yeah, I launched a number of private label brands. Yes. That was the plan. I mean, that’s what I was doing.

So I started at.com and then I went over to Europe. Went over to UK, Germany. We had some success there. And also the smaller marketplace, that was before all of the extensive VAT requirements, that we see now.

[00:04:19] Chris: So you expanded within like a year, or how aggressive were you with it?

[00:04:26] Gary: I expanded probably around, I wanna say 2017, so about a year, year and a half to two years. And then, I would always go to these e-commerce conferences. At the time I was based in Shanghai at the time, so I lived in Shanghai for 11 years.

Met my wife there, my son was born there, and I would always go to conferences. That’s where we we met Chris in Hong Kong at the Global Sources conference.

[00:04:51] Chris: Back then, I was talking to brand owners a lot about, when is it smart to expand internationally? Will Amazon support brands that are being aggressive about it? That conversation’s changed a ton since 2017. But it did lead us to conversations about which are the best marketplaces to expand to in terms of Amazon’s regional marketplaces. So that conversation usually leads people to UK, or Germany, or of course Japan, right?

Japan was sort of the unsung marketplace for some of our US-based clients for a while. But I think people started to understand how big the marketplace was there, how much opportunity was there. And that was something that even got you and I talking about the mastermind that you’re putting on there.

So maybe we can talk a little bit about, just how Japan differs from other regional marketplaces where some sellers might have had success, like say UK and why some opportunities there may have been missed up to this point.

[00:05:54] Gary: Yeah, I feel Japan is very underrated because it’s the fourth biggest marketplace. Behind US, UK, and Germany. But almost nobody is talking about it, I think people are intimidated by Japan, the language barrier and cultural barriers but I think some people would be surprised that, I mean, there are barriers, but you can totally do it without knowing Japanese.

I still don’t speak Japanese very well and I selling in Japan, and there are also certain advantages that it’s actually, it may be easier and more cost effective to sell your product in Japan than a UK and Germany. So I do think it’s a good opportunity.

[00:06:37] Chris: You and Leah, work on the compliance side a lot. I thought we could talk about compliance a bit. Because I know that’ll be served well at the Seven Figures Teller Mastermind in Tokyo.

[00:06:47] Gary: So, talking about compliance, the opportunity is definitely there. It’s the fourth biggest market, yet there’s a lot lower level of competition compared to UK and Germany, and even compared to some of like the smaller markets like Italy, there’s more sellers on in italy and Spain than in Japan, and they’re like a fraction of the size of that. And people forget Japan is the third biggest economy in the world. I mean, like people are kinda sleeping on Japan, right? and Amazon is the number one most popular e-commerce shopping platform in Japan. So actually, when I moved into our new apartment, we had furnish the whole thing. I was asking the realtor, where I buy my stuff, which shop should I go?

He like Amazon. So people may be surprised that Amazon has overtaking Rakuten. Rakuten was the former number one platform. So Amazon is the biggest platform in Japan. Yeah. So, it’s great opportunity.

But talking back to compliance, there are so many important differences. If sellers want to sell into Japan, probably number one is importing. To legally import into Japan, you cannot just use a US LLC as the import of record, like what you could do with some other country. In Japan, you would need a Japanese registered address.

So whether that’s an importer of record that’s based in Japan, or an individual based in Japan . Japanese government wants to have some support of accountability. Somebody in Japan if something happened, right? But that’s number one. That’s one of the, the big requirements for Japan. After that, number two is product compliance, because Japan’s compliance laws and regulations are different from other types. So for example, even if you are selling a water bottle, Japan has like any product that touches food, basically you would need compliance testing for that. And there are different types of compliance tests that are required. And I think one other thing that surprised me is you cannot just take any compliance test certificate and apply it for Japan. Japan actually has their own approved laboratory. So it cannot just be like an SGS, it has to be their pre-approved laboratory from X, Y, Z agency, based like in Hong Kong or based in Tokyo, for example. So you really have to work with someone that’s familiar with the compliance laws in Japan to be able to legally import to Japan. Otherwise, you know, there’s nightmare stories or products getting stuck at customs and there’s the fines and you have to find a place to put it if it’s rejected, et cetera. So that’s why it’s very important to pay attention to these japanese compliance regulations.

[00:09:20] Leah: Yeah, absolutely. And I think that’s maybe something that a lot of sellers in other countries aren’t necessarily used to dealing with. Even in regulated spaces, Amazon doesn’t always preemptively ask for that information before it gets to them. So a lot of times they’ve been selling it for years and didn’t even know that they were compliance regulations for their products.

So in terms of the first step that you think seller should make when they’re thinking about expanding into Japan, what, what do you think their first step should be?

[00:09:49] Gary: I think if they’re brand registered, they can get started to apply the brand registry, you can move it to Japan so that way you have all of the protections. Sometimes there are like kind of unscrupulous sellers that are like selling your product in Japan without you knowing it. They’re dropshipping it and they’re selling it for like four times the retail price, right?

So that way once you have brand registry, you can knock those guys off. I think that would be the first step. And then as you are moving your products to Japan, obviously, make sure, you do your product research, there are excellent tools out there to verify the demand, verify the competition.

Competition on the whole is a lot lower, but you have to be careful with the demand because Japanese consumers are a little different. But the tool, helium10 works for Japan. So definitely use the tool for that.

And then also one of the, the big things, the big advantages selling in Japan, a lot of people are not aware of this, is that the review threshold in Japan is actually a lot lower than in Europe, in other countries. That means that you can move your product into Japanese market. You can carry over those. So even if you have just like a couple hundred reviews, you could become, one of the top sellers in terms of review count from day one. A lot of sellers are not aware of that. So that gives you a huge advantage, you have the reviews, you have the social proof. I mean Japanese shoppers, I find they pay more attention to the number of reviews, not just necessarily the score.

[00:11:14] Chris: That’s a great point. clients of ours and others love to talk about reviews but maybe you can get started and ramp up quickly. If you haven’t sold in Japan before, maybe you can jump in and sort of make a splash and get a handful of reviews that will be meaningful for your sales rank without eons of time passing first, right?

[00:11:32] Gary: Yeah. I mean, you, you carry over those reviews and like in the past there was a phenomenon where you could carry over like those 500 reviews from us to the foreign market, but once you get the first review in that foreign market, all those reviews go away.

That’s not the case anymore. You still keep those 500 reviews and you just add onto that. And then one other benefit, and I’m sure a lot of people will be happy to hear this, is that the PPC costs in Japan are lower than us, than UK, than Germany, than the European markets. So that will be an advantage as well.

PPC expenses, that’s probably the number one or number two expense, you know, after Your product costs, your inventory costs, right? So you’ll have to add an advantage.

[00:12:08] Leah: And then how are you handling localization and the language difference? Cause I think that is probably the barrier that most sellers think of when they think about expanding into Japan.

Yeah. Definitely do not use Google Translate. Definitely higher an agency that can do the translation or the localization.

I mean, there’s great ones out there, like YLT. Yana runs a great agency. They have native Japanese speakers. You know, she’s helped us with that. Not just that like localization, Japanese consumers with their product with looking differently. They may look further in detail.

So, with the images as well, make sure that the images have japanese on them. But yeah, definitely hire, don’t just Google translate.

[00:12:51] Chris: What types of sellers do you think the sellers coming to the Seven Figure Seller Mastermind in April are going to be? Mostly people who have already established themselves mostly?

Western sellers who have already established themselves in Japan? Or will there be kind of a mix of people who are thinking about doing it and just wanna stick a toe in the pool or some mixture of the two? And then maybe after that we can talk about the different speakers you’ve got.

[00:13:17] Gary: Yeah. So coming to the event, we do have seven figure sellers already selling US, already selling in the European marketplaces and they’re looking to expand their brands into a brand new market. I think this is one of the best ways to scale your business because you are going kind of into a blue ocean, right? You’re not just competing with like the million plus sellers in the US, right?

There’s only about , in Japan last time we checked, I think it was about 70,000 sellers compared to one point, I think 2 million. So it can be a very blue ocean opportunity. Um, and our goal is to help sellers make additional, like let’s say 300K to 900K in Japan revenue, right? That’s our goal. So if you do have you know, successful SKUs, like all the challenges you know, at the conference we’ll have import of records, we’ll have product localization experts, we’ll have compliance testing experts. So you basically, any question you have in the room to help you so you don’t have tto search the internet, we can help you pick all the top people we think we can help sellers .

[00:14:18] Chris: And I know Ritu Java’s gonna be there, right?

[00:14:22] Gary: Yes, yes. Ritu Java. You know, she’s actually lived in Japan for 17 years. She has Japanese permanent residency. So she helped me with my Japanese listings, she has a wealth of knowledge in Japan.

Not many people are aware of that. And then she’s one of the top speakers in the world. She just won, I think the favorite speaker award at one of the events recently. So she’s gonna be speaking about important topic, Amazon Japan SEO and PPC best practices. We may even get her to talk a little bit about Chat GPT and how you can use it.

And we also, we have Amazon coming, Amazon ads. We have eight figure Amazon Japan sellers, seven figure Amazon Japan sellers. So I think there’s gonna be a strong line up of speakers. I think this will be one of the best events this year, regardless of Japan. Obviously I’m biased, but we put a lot of time, Chris’s gonna be here as well, you know, for brand protection. So, you got to play defense as well, right?

So obviously defense it’s very important.

[00:15:23] Chris: For sure. We’re gonna be talking about brand protection, brand abuse, and reporting things to the right teams. And of course, if you’re reporting things through proper channels in Japan, and it’s not getting anywhere, how to escalate and surface those things elsewhere within the Amazon ecosystem to make sure they get the proper attention and review and get fixed. So, healthy selling for sure. I’m really looking forward to this. Any last thoughts before we close on what you want people to know who are kind of on the fence about going to Japan? It’s Tokyo, April 4th and 5th. It’s cherry blossom season. We could talk about that for a moment.

[00:15:59] Gary: Yeah, This time of year will be the best time to visit. As Chris and Leah knows it’s the famous cherry blossom season. People like tourist actually come to Japan this time of year just to see the cherry blossom. So we wanted all of the attendees to be able to enjoy this, this time of year, so the evening of day one, April 4th, we’re going to have a networking social in a local Tokyo Park underneath the cherry blossom tree. So we’re really gonna lay out a spread with some Japanese sake, beer, sushi bento boxes and network with other sellers, you know, the speakers like Chris and some of the other guys. So we really wanted to create this one of a kind Japan experience. You cannot get anywhere else in the world. So I think that is big. And the other thing is, I think just choosing the right marketplace for sellers, I think that could be as important or even more important than choosing the right product, right?

Because expanding to Japan, you’re not really risking a new product. You already have the supply chain. You have the manufacturing, you have the proven listing, right? You’re just moving it to a new marketplace. I mean, obviously there are challenges and obstacles, but if you’re able to overcome these challenges, these challenges are becoming like a mote around your business because all the other sellers are intimidated. They will be left out outside and you guys will be inside.

[00:17:16] Chris: That’s a great point. Once you climb that wall, you’re on the other side of it. Everyone else has to start at the bottom of that wall.

[00:17:24] Gary: Exactly. So we’re gonna be able to fast track this for you guys in two days in Tokyo, April 4th to the 5th at the Seven Figure Seller Japan Mastermind. So yeah, I’m super excited, guys.

[00:17:36] Leah: Yeah, me too. And we’ll include the link to the conference in the show notes as well so anyone that wants to sign up can find that easily.

[00:17:43] Chris: And I would argue that anyone who can survive the challenge of dealing with or selling on Amazon anywhere in the world is strong enough and competent enough to deal with a different, potentially strange and unusual, but different marketplace like Amazon Japan.

Any questions about that, certainly reach out to Gary directly. Gary, the best place for them to reach you with questions about the event?

[00:18:06] Gary: Yes, it’ll be by email gary@8020sourcing.com. So gary@8020sourcing.com.

[00:18:16] Chris: Sweet. All right. We’ll include that at the bottom. Thanks again for talking to us today. We can’t wait to see you in person. Awesome.

[00:18:22] Gary: Thanks so much, Chris and Leah, can’t wait to see you guys here in Tokyo.

[00:18:26] Leah: Thanks, Gary.

Hosts & Guests

Chris McCabe

Leah McHugh

Gary Huang

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