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Zero To Hero: Building a Brand Series – Moving Forward From Amazon

Zero To Hero: Building a Brand Series

 Moving Forward From Amazon

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In the previous blog post, Manuel went over some great strategy and techniques on how you can pitch your products to retailers and wholesalers across the world.

Today’s blog post marks the final blog post of this great series. This post will be all about thinking forward and expanding your business into other areas.

Expand Into The Other Amazon Global Markets

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Amazon is still the number one E-commerce marketplace in the world, and it will be for a long time. Although we believe that Amazon has some disadvantages for sellers who wish to have complete control over their business, you should always list your product there. Currently the markets which we recommend expanding to, are:

  • Amazon EU(UK & Germany should be a priority).
  • Amazon Japan

These marketplaces have a much lower volume than their US counterpart, however, the traffic and sales are increasing year-on-year and Amazon has been investing heavily to attract buyers & sellers to their marketplaces outside the US.

Expand Into Other E-Commerce Marketplaces 

There are a number of ECommerce marketplaces that allow you to list your products, some also have a similar fulfillment service like Amazon FBA. While not all ECommerce marketplaces are ideal(some have very low sales volume), this will allow you to increase your brand visibility and target markets which your competition is unlikely to target.

In my opinion, the marketplaces that make the most sense to register a seller account are:

  • Walmart & JET
  • Newegg
  • Sears
  • Ebay
  • Rakuten

Focus On Growing Your Online Store

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Having your own ECommerce store is the only to have complete control over your brand & pricing. One of the things I like about having an ECommerce store is that I have complete freedom when it comes to:

  • Creating special offers/giveaways.
  • Store Design & Branding
  • Customized Packaging
  • Control over Customer Service & Experience

However, the best thing about having your own store is that it’s a challenge! While Amazon definitely needs some mastering – all the buyer traffic is already there! With your own store you need to spend an enormous amount of time dedicated to bringing traffic to your website.

While this requires a lot of hard work and testing, in my opinion, it’s more rewarding and it can be scaled significantly once you have a working formula

Outsourcing

We feel this step is the most important part of any business. A successful business is a scaleable business. While you should always retain control over the key tasks of your business, it is important to delegate tasks, especially those tasks that are time consuming or you have no expertise in.

With the rise of freelancing and outsourcing websites, it is very easy to find very skilled freelancers or companies for your business. In my opinion, these are the tasks that you should definitely outsource: 

Importing

  • Product & Packaging Design
  • Product Inspection
  • Logistics(Freight Forwarder, Warehousing etc)
  • Product Sourcing

Business

  • Legal & Accounting
  • Social Media Marketing
  • Company Branding
  • Graphic Design

Of course, what tasks you outsource depends entirely on you, however, if you want to scale your business and achieve freedom, you need to delegate tasks.

Conclusion

This blog post concludes our Zero To Hero: Building a Brand series, we hope that this series proved helpful in your efforts to build a truly successful and global brand.

Building a brand takes a lot of effort, however with the right strategy in place, you will have a company that has great products and its loved by its customers.

We would appreciate any feedback you have on this series and if there is anything we can help you with, kindly leave a comment below.

All the best & happy selling,

Duncan & Manuel

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Zero To Hero: Building a Brand Series –moving to Retail & Wholesale

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My background is actually retail, so I naturally started out with retail before moving onto Amazon. When a friend told me about FBA I didn’t even know that Amazon let’s third parties sell on Amazon. 

I thought they only sell their own product. I am glad that friend pointed me to FBA, otherwise it would have been a lot more difficult to get my brand off the ground. 

It has been nearly 3 years since I started my own business and as I said I started in retail. I had collected many contacts in retail and that was the natural way to go for me. 

Looking back I am happy I started out in retail as it helped my brand immensely to get exposure while creating a second income trough Amazon.

The ultimate goal of any brand or company is to get their products in front of as many customers as possible. The only way to do this is by listing your products through all the sales channels that are available to brands.

The most powerful or “rewarding” sales channel is retail and wholesaling. Retail has the power to move your product quickly, thus getting huge exposure for your brand and products.

The Challenge

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Retail is notoriously one of the hardest sales channels to get into. Your products must not only be appealing to consumers, but also packaging and marketing materials have to be of a higher standard than E-commerce.

However, one of the hardest challenges is finding retailers who are willing to take on a new brand and its products. Retailers often don’t take huge risks with their capital and prefer to invest in brands that are already established or brands that carry really unique products. So the key is to have unique products rather than generic.

Selling a Garlic Press that has some accessory doesn’t make you unique. The retailer will buy this product from his trusted source. 

Larger items also have the issue of shelf space; which in retail is limited. On top of that you can’t just knock on a retailers door and expect a smooth and fast process.

Retailers have decision maker hierarchies and it is often difficult to get to the right decision maker. Often times retailers already have their suppliers or connections and they aren’t open to a new supplier. Reasons being that they already may have great buying conditions and relationships with their existing suppliers.

In some cases I worked on a potential retailer for over 2 years before getting an order (in my previous job) and in those 2 years there were 3 changes on decision makers and I had to start from the beginning again.

The new guy might not be open to you as the previous guy was and maybe he is already bringing sources/suppliers to the job and you need to start all over again convincing the new guy. 

On top of that most larger retailers get emails and phone calls every day from new suppliers wanting to sell them their product. So it is a long and windy road to get into retail, sometimes as much as 2 – 3 years. But once you have your foot inside the door you are in a great position. 

Solution and how to get into retail

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One word – relationship. If you have a good relationship the price or your product doesn’t really matter. 

Someone is likely to buy from you if you have a relationship with him right? The more credentials you have and the more history you have with a person the more likely that person is to buy from you right?

An example. Let’s say you need a new health insurance. You already have an insurance from your trusted childhood friend (let’s call him Steve). Steve is quite expensive and maybe his insurance package doesn’t even have a lot of benefits. 

But you still buy from him because he’s your friend and you’ve known him for years & on top of that you trust him. You even have him over at your house for BBQ’s, you meet up for beers etc. 

You get a phone call from an insurance company trying to sell you a new health insurance with much better benefits. You don’t know this company but the offer sounds appealing.

You take the offer and go to Steve and tell him he needs to make the same offer or you buy from this new insurance company. Steve probably can’t make the same offer but he’ll adjust his old package and give you more benefits, maybe even at a better price. On top of that he throws in a coupon or voucher for shopping at Amazon. 

You close the deal with Steve. That’s the power of relationships. And that’s how retailers work – they have their trusted sources and relationships.  “You need to become Steve”. 

Many of those relationships especially in the “old days” included some sort of bribery. For example if you switch to a new supplier that supplier would buy out your entire old stock from the old supplier. Back in the 90’s it wasn’t unheard of that a new supplier would invite you over on his yacht and take a trip down to the South of France.

Thankfully these “unfair” tactics aren’t accepted anymore – at least not with multinational retailers. There are strict enforcements in terms of bribery in big retailers. However, the relationship factor still plays a key role in doing business.

Today its just called “wining and dining” a customer. You take the customer out for a steak dinner and a nice bottle of wine and you probably don’t even end up talking business but a few days later you’ll get an order.  

Now the key is to build a relationship with the buyer. You probably won’t be able to close a deal for months or even years because every offer you send to a new prospect ends up in the “trash” inbox. 

1) Start out by visiting local stores that have maybe 20-30 stores in the area/country or state. Try to get an appointment with the Manager or Purchasing Department. Once you have an appointment prepare yourself with:

  • Company presentation (Powerpoint / PDF)
  • Product Catalogue (Can be PDF but prepare something nicely and don’t just show a link to your Amazon listing)
  • Bring samples and business cards
  • Bring your wholesale price list 

A store can probably take up 5 pieces per item/per store. So 30 stores makes 150 pieces, not bad for a first order. 

2) Once you are listed in a smaller or local store look into larger retailers that have 100-200 stores. 

Same principle applies in terms of preparation but you are probably not the only one knocking on their doors. So you need a bit of track record with a smaller retailer or your online portfolio. 

Retailers with more than 100 or 200 stores probably have their own purchasing department, maybe even a buying office in Asia. So you need to get to the decision maker. 

There are several ways to get to decision makers but the most effective yet also most frowned upon are cold calls. 

Email the decision makers or better cold call first. There are cold call guidelines for free on the internet. Key is to let the buyer speak and you only listen. 

Most buyers just want to talk about how great they are, let them. You need to make them feel that they have the upper hand. 

After your first cold call, follow up on the topics and email a proposal as discussed in the call. 

Give it a few days and then either email or call again. 

3) Exhibiting your products at a local or international exhibition is the best way to find retailers and wholesalers.

This time the buyers come to you and all you really have to do is follow up with the topics of the discussion. 

The key takeaway here is that getting into retail really is a marathon not a sprint but it can be very rewarding: 

The Rewards

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The best thing about retail are re-orders. You might not make much money on the first order but if the item sells well re-orders will come and often times in much larger quantities than the 1st order. The good thing then is that the entire process is already set up and all you have to do is to place an order with your factory, knowing the entire process with the retailer. Or if you have stock back home you can just send in the new order to the retailer from your warehouse. 

From some retailers I get re-orders every 1-2 months for the same product and all I have to do is place an order to the factory and ship the item to the customer. 

These orders can be 2-5,000 pieces each time. Sometimes I make 1$ on a product, sometimes 5$. So in 1 day I can make 25,000$ in profits not really doing anything (a bit exaggerated – there’s still work to do :) ). 

Imagine how many months you’ll have to sell on Amazon for an order and profit that large. 

Conclusion

Getting into retail is very hard but as I said it can be very rewarding. It’s not a sprint so some deals can take 2 or more years but if the client is worth it don’t give up. Obviously the above is just a short visit into the topic, there’s much more to it such as contracts, advertisement material, sampling, pricing structures etc. 

If you need more help on the subject or are interested in growing your business into retail don’t look any further. I am working on material that is coming out in the coming weeks that should help immensely :)

All the best and happy selling,

Manuel 

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Zero To Hero: Building a Brand Series – Branding your Product

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Zero To Hero: Building a Brand Series – Branding your Product

In this blog post I’ll talk about packagings and branding on your product.  I’ll give you a brief overview on why photography, packaging and marketing materials are so important when building a brand. 

Product Photography (taking your own vs hiring a professional)

Why are great product pictures important? When people come to your website or Amazon listing the first thing they do is to look at your pictures. The customer bases his immediate buying decision on your photos. 

It seems so obvious but yet I see so many listings with very poor product photography. Even if the product itself is great a poor picture can decrease your conversion immensely. 

Let’s take a look at two examples:

I look for a wooden cutting board on Amazon and I find a few listings. The well performing listings (even if not the best product) have great listings.

Take a look at this photo:

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And now take a look at this photo of a listing that is performing poorly. 

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This product is actually equally good and the seller even stresses out FSC certification (sustainably harvested wood). Me personally I wood rather buy the FSC certified product but the picture is turning me off. 

My suggestions is if you are not a professional photographer then please hire someone to take photos for you. 

Yes, great photos may cost you a bit of money but it is a one time investment and it will pay itself off. Also while sometimes Photoshop can be used for retouching, adding shades and effects I do not recommend using Photoshop to edit your product picture into an environment. It just looks cheap. 

Custom Packaging – standing out from your competition

I’ve posted about custom packaging in a previous blog post (http://importdojo.com/best-packaging-practice-how-to-create-a-great-private-label-packaging/) which I think is a comprehensive guide. Have a look and get some ideas there. 

The point is to think outside the box and reflect the product on the packaging. E.g. the Nike Air packaging or Cigars in a wooden box that reflect a humidor. 

Shipping Boxes 

Make sure that you use enough carton strength when shipping your products. The unit packaging needs to be at least 26ECT (Edge Crush Test) – see above blog post. 

Until your product reaches your customer there are many hands involved that handle your packaging. So you’ll want a sturdy and compact packaging. 

Use thick carton (32ECT minimum) for export cartons and add a sticker that says “Fragile – handle with care”. No matter if the product inside is fragile or not, this will improve chances your cartons are handled more delicately by the courier or logistics company. 

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Insert Cards & Marketing Materials

Add insert cards as simple as the below one where you can ask your customers to leave a review or also sign up on your website so that you can collect email addresses. 

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Also include Instruction Manuals (if applicable). Even if your product is self-explanatory some customers appreciate a guide on how to use a product. You can even add some tips or reference another product of your’s that will make the customer come back. For example if I sell my French Press I also add: “in the unfortunate case that you break your glass, we have a replacement glass available on Amazon”. Another example would be to reference a spare part that is only available trough you. Or something along that line.

Conclusion

Having great photos is essential to show the visual aspect of your products. Great photos will help you sell your product, especially on Amazon where customers often look at the photos to determine if they should make the purchase.

If you don’t use external marketing methods such as YouTube videos to showcase the features of the product, chances are that great photos are your only way of attracting customers to your brand. 

When it comes to selling products, most sellers only focus on the product itself. A lot of people don’t realize that the product packaging is also a part of your product. This applies especially if you rely heavily on marketing or want to expand into retail and wholesaling.

Look at YouTube for example, a lot of product review channels put a lot of focus on a brand’s packaging. What this means is that good packaging will help you sell more of your product.

Another thing to note is that great packaging can also help you get more positive feedback or reviews on Amazon. These days online shoppers purchase a lot of products at any given time, by making sure that your packaging wows the customer, they are more likely to remember your brand and comment positively on the experience.

Great brands put a lot of effort in making their products look good, and so should you! With proper product branding you will help attract more customers and gain more confidence in your brand.

I hope this post was useful. Please feel free to comment or share :)

All the best and happy sourcing,

Manuel

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Zero To Hero: Building a Brand Series – Inventory Storage

Zero To Hero: Building a Brand Series

Inventory Storage, FBA Prep & Fulfillment Centres

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Welcome to another part of our Building a Brand Blog Series. In last week’s blog post we went over a brief introduction on social media and which social networks are best for Ecommerce sellers or importers.

This week’s blog post will be on a completely different, but equally important subject – Inventory Storage & Fulfillment. When it comes to product-based businesses such as ours, it’s important to not only get your logistics right, but also have the best rates and fast shipping.

I have used both FBM(Fulfilled by Merchant) and also FBA so I will also give my point of view on what works and what doesn’t. Although my main focus is on FBA, I normally still leave some units in a storage facility either to reduce my Amazon fees or to fulfill any orders from my own Ecommerce store.

This blog post will be all about how you can manage your inventory effectively and save fees when compared to Amazon. I will also show you how you can use a third-party fulfillment center to take advantage of busy periods such as the Chinese New Year or the December holiday seasons.

So let’s have a look at what options are there for importers or sellers and explore different ways on how you can manage your inventory effectively.

What To Look For In a Fulfillment Center?

If using a third-party fulfillment centre, ideally it should be as similar to Amazon FBA as possible in terms of service and efficiency. However, here are some features I look for when making my decision:

  • The fulfillment centre should be in a strategic location so I reduce shipping costs from the country of origin.
  • The FC should have a backend software system that enables me to track my inventory  and gather other important data(fees, shipping rates, SKUs comparison, etc.).
  • They should have integrations with all major Ecommerce marketplaces(Ebay, Amazon, Shopify, BigCommerce, etc.). This allows me to manage all my marketplaces(in terms of logistics) from one place.
  • Their shipping rates should be as low as possible and they use all major courier services. Never use a fulfillment center that relies on one courier as it limits your options.
  • If I’m using the fulfillment center exclusively for Amazon, I look for ones that have extensive experience dealing with FBM. The requirements are more strict when it comes to FBM and a few late shipments can compromise your Amazon seller account.

The Benefits of Fulfillment Centers

 Fulfillment centers offer a lot of advantages for ecommerce sellers who want to expand towards other sales channels. Some of the benefits are:

  • Cheaper long term storage than Amazon.
  • Backend dashboard allows you to track inventory and shipping status of your products.
  • Some FCs offer great rates for oversize items and storage.
  • Ultimate control over pricing and customer experience(if selling from your own store).
  • Brand-able shipping packages.
  • No restrictions on inserts or marketing materials.
  • Multiple integrations with eCommerce marketplaces.
  • Ability to process returns easily.
  • FC’s can make custom orders for special clients.

 As you can see, choosing the right fulfillment center has a lot of benefits and if you’re planning on launching your own store, a FC outside of FBA is recommended. 

FBA Prep Companies

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Prep centres are storage facilities specifically used for preparing or assembling your products according to your requirements. FBA prep centres will make sure to prepare your shipments according to Amazon’s guidelines. This service might be very useful if you want to make sure that you have everything in order or if your product(s) come in multiple pieces and need assembly.

Nowadays prep centers have evolved and offer multiple services, including:

  • Goods Inspection.
  • Product Photography.
  • Labeling, Knitting and Bundling.
  • Storage.
  • Inventory Updates.
  • & much more.

Please note that prep centers don’t fulfill any customer orders, they should be exclusively used for storage, inspection and prepping.

Location, Location, Location!

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When choosing a fulfillment center or storage facility, location is very important. Since ideally you want to save on shipping costs from your supplier/manufacturer to the destination(if not an FBA warehouse). When it comes to locations, my preference would be coastal states in the US. In particular:

  • New York
  • California

 If your supplier is in China or any other Asian country, Los Angeles would be my choice. LA has both the busiest port and airport in the US in terms of cargo, making it an ideal destination to ship your inventory. Also, a lot of fulfillment centers and storage facilities are situated around LAX airport or close to the port.

Shipping your goods domestically will always be cheaper, so the only way to save time and money with your imports is to pick the closest location in the US from your supplier/manufacturer.

Amazon Multi-Channel Fulfillment

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Amazon’s multi-channel fulfillment service where you can use FBA to fulfill third-party orders such as Ebay or your own ecommerce store. This is extremely convenient if you want to have all the shipping and fulfillment in one place. However, in my opinion, the

Amazon fees are quite high and you even have to pay extra to have a multi-channel order.

If you don’t have a lot of sales from other channels you can use Amazon’s multi-channel fulfillment, however, if you really want ultimate control over pricing and customer experience on your own website, you should pick a third-party FC.

Conclusion

Fulfillment centers, prep companies and storage facilities allow you to diversify how you manage your inventory. If you sell on your own ecommerce store or have large/oversize items, a fulfillment center will help you reduce your fees substantially.

I would still suggest you to use FBA if most of your sales come from Amazon, however, ideally you would want to expand into other sales channels. By using a FC you would have ultimate control on pricing and customer experience.

In next week’s blog post we will talk about Product Branding. Manuel will guide you on the best practices on how to brand your product effectively and create stunning inserts and marketing materials.

We hope this blog post was helpful and as always, if you have any questions, kindly leave a comment below.

All the best and happy selling,

Duncan

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Existenzangst or fearing for one’s existence

Totally off topic today but I feel like sharing this famous German paranoia. In German we have a saying which is called “Existenzangst” and literally means being afraid of loosing your livelihood. 

Meaning you are constantly afraid of loosing your job, income, running out of money and ending up on the street. It’s ridiculous but ever since I’ve become an Entrepreneur I have this almost every day.

I admit, I too am scared (or anxious) and worry all the time so I wanted to get to the bottom of this. Am I the only one feeling like this? Let me try to get this off my chest. 

What’s the worst that could happen to me today? I am really just typing as I go and put out my thoughts. 

I really want to evaluate my very own situation and if you also have these “existence fears” feel free to do the same :) 

Lets take a look:

  • Amazon business tanks (30% of my income) 
  • Sourcing & Retail business tanks (30% of my income) 
  • Online courses, workshops, ebooks (20% of my income) 
  • Coaching, consulting (10% of my income) 
  • My eCommerce store tanks (10% of my income – just started)
  • All podcast & other interviews magically disappear and no one ever hears of me from tomorrow on (no income but leads and subscribers to my blog) 

Lets look at it in more detail: 

  • I am live on 3 Amazon market places and even if one tanks I still have 2. And I am not even live on many other sites that have third party selling (Lazada, Jet, Sears etc.) 
  • All my satisfied customers and potential leads that I built in over 3 years disappear tomorrow. I have many repeat sourcing clients who are very happy, how likely is it that they all disappear? 
  • I am currently live in 5 retailers, some re-order every month or so. I am even working on more retail customers. 
  • I have courses live on 5 platforms. Some with coaching, some without. How likely is it that they all get removed? Especially on my own site…
  • No one ever thinks my opinion or expertise counts and doesn’t book coaching with me anymore. I have built a reputation (I hope :) ) for being an expert in my field and I rather provide value than sell something just for the money.  Those that really know me well know thats true. So I guess that is very unlikely to happen. 
  • Just started with 1 eCommerce store (Outdoor & Garden category) and it’s going well so far. eCommerce is the future so even if I loose this I can build another store quickly. 
  • I gave about 30 podcast interviews, 4 or 5 actual print magazine interviews, 10-15 online blog guest posts, I spoke publicly at conferences and videos are available on that. Even so, I could start all over again and build my reputation from the scratch. 

Even though some of the above may be possible to happen but it is very unlikely that they all happen at the same time right? So what am I really worried about? Guess I am just another human :) 

Lets say one of these 30% income streams tanks. I still have 70% of my income and need to find a new way to make up for the missing 30%. 

Since I will still have 70% of my income & I’ll  actually be in a comfortable situation. And I would just have to increase workload for a few months. 

Lets just say all of this happens at once. It is not the end of the world. I still have some savings and my health. While I don’t really like the idea of going back to a job I have over 3 years where I ran multiple business and built income streams from the scratch. 

I’ll likely go apply for a job at a retailer’s buying office (Amazon, Walmart) here in Hong Kong and on top of my 17 years of retail experience I now have 3 years of running my own business, a best seller book about importing from China and a round of online courses, interviews, public speaking that I can add to my CV. So I am pretty sure that I will find a job again. And that’s really worst case scenario.

Then again lets take another scenario. Let’s just say I lost all my income streams but I still have saved up lets say 50,000US$ from all these ventures. Would I immediately look for a new job? Probably not. Reason being that I have yet to travel the world and see things. Not that I haven’t traveled yet but I haven’t really TRAVELED yet. I mean hiking the Pacific Crest Trail in the US for 6 months, going to Machu Picchu in Peru, living on a beach hut in Brazil for a year and so much more to do. And the best thing is when you travel on a budget or do what’s called “Geo Arbitrage” you don’t need much. Don’t know what that is? Geo Arbitrage is when you live in Thailand (or anywhere else where you have low living costs) for 500$ a month on the beach eating seafood and drink coconut water all day. Obviously if I would have a child, a car, a mortgage etc. things would be different and I’d have to get a job pretty quickly. But again – it’’s not the end of the world.

Think of the time that you worked for yourself as a time out in where you enhanced your own skills, tested your leadership abilities and hopefully had a lot of fun doing it. And you’ve added things to your CV. You didn’t really take time off for 3 years doing nothing, you tried to build something. And that’s worth something when you sit at an interview. I am pretty sure that will get you the job. 

But lets not get ahead of myself, I work hard every day so that I can keep doing what I am doing. And I guess you are too :) 

My message today I guess is that we should all stop worrying so much. It isn’t as bad as it looks like. My second message today and I keep saying this to everyone – DIVERSIFY

Just by looking at what I wrote I again realized myself how important it is to have different income streams. AND it is another reminder to build even more income streams. 

An income stream that is bigger than 30% is actually worrying – unless you make millions anyway :) 

Back in the day when I worked for the lighting manufacturer one of our biggest clients (a very large DIY store) went belly up. Over 500 stores (thats big for Germany) closed over the next couple of months and suppliers (the company I worked for) weren’t going to see any money anytime soon. That customer made up over 70% of the companies turnover. Thankfully the management saw this coming and invested into hiring sales staff and building more clients. But it was still a big loss for the company. Anyway, just a small story but same principle. Build more income streams and you don’t have to worry all the time. 

If you have these fears once in a while sit down and look at what you’ve built already since you joined the entrepreneurial world. 

Copy my thought process above and see where you stand. Look at what you have already accomplished. Let me know in the comment section, I am really curios to know if I am the only one feeling this way :) 

Even if you are just at the beginning and scared of the path in front of you, if you never try you’ll never know and you’ll miss out – I promise :) 

All the best to us in 2017 and happy sourcing!

Manuel 

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Zero To Hero: Building a Brand Series – Social Media & eCommerce

Zero To Hero: Building a Brand Series

Social Media & E-Commerce3

In last week’s blog post we had a brief introduction on E-commerce and the key steps you should take to create your own sales channel. Another way to create a powerful sales channel is through Social Media.

Social Media is essential to get your target audience to find your brand and connect with influential figures in your niche. In the past few years, social media has become the number one medium for promotion and businesses who want to achieve long term success need to have a social media strategy in place.

Why Having a Social Media Presence is Important

We often hear how social media is powerful and important for brands around the world. The main reasons why social media is the platform of choice is:

  • Advertising conversions are higher than other forms of promotions such as traditional PPC, offline marketing and television.
  • People spend a lot of time on social media so it’s very easy to find your target audience.
  • Social Media provides a lot of data on demographics and behaviours which if used right it can scale up your business significantly.
  • Drive Huge Amounts of Traffic To Your Website & Amazon Listing.
  • Connect with your customers on a personal level and find out their concerns or needs in your category.

A Look at Social Media Platforms

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Facebook

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Facebook is without a doubt the most popular social network to use. Although having(and growing) your own Facebook page is essential for your brand, the advantage Facebook has over other platforms is an affordable and converting advertising platform.

Initially, the best strategy to use Facebook Advertising is to find your target audience. No other advertising platform in the world allows you to segment your audience by:

  • Gender
  • Income
  • Country
  • State/Province
  • Interests
  • Age

When launching a new brand, my strategy is to have a budget of $5 a day maximum to find my target audience, that way, when the time comes to launch my product, I know already who to target. Facebook also allows you to target audiences who liked a particular page, so if you have a fitness brand and want to target female audiences aged 18-25 who like Nike, Adidas & Under Armour; you can do that with FB Ads.

What this allows is to have better converting Ads and more clicks to your sponsored posts. One suggestion I can give is to not direct the audience to your Amazon listing(unless you have a lot of positive reviews), but instead to your website/landing page to collect email addresses.

We will talk in more detail about Facebook Advertising in the coming weeks, however, as a business in 2017 and beyond, you need to be on Facebook – it’s where your target market hangs out most of the time so take advantage of it!

Instagram

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Instagram is the platform of choice if you want to showcase your products, brand and your story. The visual aspect of Instagram allows you to truly differentiate yourself from your competitors. Since Instagram is owned by Facebook, you can use their advertising platform to also target Instagram users.

What I really like about Instagram though, is the ability to connect with authority in your niche and even larger brands. This makes it the perfect social media platform alongside YouTube to gain massive exposure for your brand.

However, the downside of Instagram is that you only have one clickable link in your whole profile – The Bio. This makes it very hard to direct audiences to click the link, for this reason, although Instagram can be used to drive sales, the main use of the platform is to gain exposure.

Twitter

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Twitter is one of the top social media networks, however, their follower base has been declining in recent years so in my opinion, other social media platforms are much better. Twitter works best for announcements or to give news regarding your brand or products.

I would still suggest you to have a Twitter account though, not only it works great for some niches such as fitness, yoga and cosmetics; but also because as a brand you need to be everywhere! The more places you are, being social media platforms, marketplaces or countries, the better.

So while in some cases twitter can work great, it’s not an ideal platform for Ecommerce sellers.

Snapchat

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Out of all the most popular social media platforms, snapchat is the newest one. However, they are quickly gaining a large following(particularly amongst younger audiences) and they are set to go public soon. Snapchat is a video-based application that allows you for to share videos which are only available for a limited amount of time.

This is a great app if you want to make quick promotional videos or even use it to make instruction-based videos on your products. However, unlike most social media platforms, Snapchat only applies to certain categories.

Nonetheless, if your market is mostly younger audiences, you need to use the app as it’s quickly becoming the number 1 social media platform amongst the younger generation.

YouTube

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YouTube is by far the best social media platform for exposure and driving insane amounts of traffic to your website or Amazon listing. With the introduction of their Video Advertising Platform, you can quickly gain enough exposure or even go viral. It’s not uncommon for unknown brands to go viral and get massive sales via YouTube. Video based ads convert much better also, however, at $0.20 a click, it can become quite expensive.

The power of YouTube relies in a pool of YouTubers from all kinds of niches, in fact, if you can find influencers or brand ambassadors willing to make an unboxing review or How-To-Guides for your product, you will get more sales than any other method, such as PPC or FB Ads.

The major tips I can give regarding YouTube are:

  • If you’re starting your own channel, your videos must be very well made.
  • Focus on providing value and showcasing your brand.
  • If sponsoring other videos, make sure that your products are of a higher quality. Packaging, inserts and the product itself need to look professional.
  • With thousands of videos uploaded every minute on YouTube, your videos can easily get lost, have a keyword strategy in place and leverage other social media networks to get views.

If used right, YouTube can be the single platform that elevates your brand from a small business to a well-known brand loved by its audiences. Unless you have enough video making or editing experience, I wouldn’t suggest you make YouTube videos yourself(as a brand), instead, outsource the whole process or even better, leverage the audience of other YouTubers.

Pinterest

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Pinterest is a social media platform that very different from the rest. It focuses mainly on images where they are structured using pins and boards. What makes Pinterest unique is that the platform has a majority of women followers, so if your brand or products are aimed at this demographic, you need to focus your marketing efforts on Pinterest.

Pinterest, unlike Instagram, has clickable images, so every image you put in the platform can be directed to your website or Amazon listing. This becomes really powerful when your follower base get bigger as it can help increase conversions.

Social Media & E-Commerce

Social media and E-Commerce are a perfect match for each other! No other platform gives you the ability to showcase your products in front of thousands of potential buyers. When it comes to promoting your products on social media, you need to focus on these points:

  • Show what your brand is about(your brand story). People are more willing to buy from brands they can connect with.
  • Run Giveaways, Polls and Promotions frequently. These will not only boost sales but it will also give you some great data about your customer base and buying habits.
  • Show unique features about your products and great looking pictures will attract more followers.
  • Use social media to provide great customer service. Check your inboxes frequently and reply to comments you get on your posts.

However, the most powerful way to gain followers and exposure to your brand via social media is by advertising. Facebook and YouTube provide the best converting advertising platforms and give you a lot of data about your customer behaviour.

Amazon PPC can get very expensive after a while and social media is another great way to drive traffic. It is recommended to not drive traffic directly to your Amazon listing via social media advertising, but instead, use the following strategy:

  1. Set-Up your Facebook/Instagram/Youtube Ads targeting your ideal audience.
  2. Links should point to your website or Ecommerce store.
  3. Have a landing page and an offer to get email subscribers.
  4. Provide customers the option to either buy from your website or Amazon itself. 

By driving traffic to your website you have the ability to collect email subscribers. Email subscribers allow you to:

  • Pitch offers during holiday seasons or when you experience slow sales.
  • Connect with your customers to build a relationship with your brand.
  • Send an email blast when launching new products so you not only get some sales, but also some traffic to your listings.

Conclusion

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Social Media Marketing can be a great asset to have for your business. No other tool comes close when it comes to connecting with your target audiences and getting exposure for your brand. Keep in mind that social media is a slow process and not every platform will suit your brand.

We recommend focusing your efforts on 2 or 3 social media platforms and outsource the rest to a virtual assistant.

In next week’s blog post we will discuss Inventory Management, FBA Prep and Storage. Amazon has been constantly increasing their fees so it makes sense to look for alternative options to store part or all of your inventory.

We hope this short guide prove helpful and as always, if you have any questions, kindly leave a comment below.

All the best and happy selling,

Duncan

http://importdojo.com/importdojo-masterclass/

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Zero To Hero: Building a Brand Series – An Introduction To eCommerce

Zero To Hero: Building a Brand Series

An Introduction To E-commerce: How To Build Your Own Audience and Gain Control Over Your Brand

In last week’s blog post, Manuel explored in detail how to deal with overseas manufacturers and the best practices for Private Label. In today’s blog post we will focus about building your own E-commerce store. While selling on Amazon has numerous benefits, nothing beats the feeling of having your own store and having full control over your brand.

While the process is time consuming and requires some capital investment, in the long run it will pay off. Here at ImportDojo we always recommend to expand into new countries and to have more than one sales channel – nothing beats having your own sales channel!

The Importance of Having Your Own Store

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1.      Have a Stronger Online Presence

A website is not only an additional sales channel, but also an asset. If you manage to build up enough sales volume, the valuation of the site can be added to your company’s overall valuation. It’s never wise to build a business solely on someone else’s platform(Amazon/Ebay), by having your own website you have an additional channel to drive traffic to.

2.      Control Pricing, Offers & Marketing

Marketplaces like Amazon and Ebay have a lot of sellers competing for the same customers. This causes price wars and more often than not, it’s a race to the bottom. By having your own website, you can control your pricing, make your own offers and be in control of what you charge.

3.      Better Branding

A website offers endless possibilities when it comes to customization. Marketplaces have guidelines which restrict the amount of customization you can make. With your own site, you have complete say on what goes into the design, colours and overall branding.

4.      Customer Relationship Building

Through email marketing and social media, you can truly connect with customers in a much more meaningful way than Amazon. Amazon limits sellers on having buyer’s information and restricts communication with them. When you have your own website, you can focus more on the customers and listen to their needs.

The Challenges

Capital Investment

Although building an online store requires minimum capital investment, marketing will require a significant amount of money. This can be difficult in the early stages as you also need to outsource website copywriting, blogs and design.

Getting Traffic

This is by far the biggest challenge of an online store. With Amazon, sellers don’t need to focus much on traffic(except Amazon PPC) as the marketplace gets enormous traffic. With your store, chances are you won’t have visitors on day 1 so you need to dedicate a lot of effort for driving traffic. These include:

  • Facebook Ads
  • PPC(Adwords/Bing)
  • Blogging and SEO
  • Social Media Marketing

Website Set Up 

Luckily many platforms have made this part easy. However, you still need a lot of time to make the design of your store ideal. Most platforms like Shopify and BigCommerce have a lot of integrations which helps you sync inventory across all marketplaces.

Besides the design, the most important parts of a website are:

  • Have an SEO friendly website.
  • Design fits your brand and audience.

This can be easily done with the use of integrations, plugins and premium themes.

Content

Between the blog, website copy and your email capture & sequence, you need to write a lot of content. If you’re not a good writer, you need to outsource all of the writing which requires a lot of capital initially.

When writing content, a good tip is to diversify content not just on your niche but the whole category or subcategory. Use different long tail keywords that cover different topics and once you monitor traffic and engagement for a few months, you will find out what your audience is interested in.

You can use the data to release new products based on what your audience wants.

Essential Pages & Content For Your Site

About US Page

The about us page allows you to tell your brand story, mission and goals behind your products. This page is very important as it gives a “face” to your brand that customers can identify themselves to.

Store/Shop

The store should be simple and easy to navigate. Like Amazon, include keyword focused descriptions and great images.

Blog

A blog not only give important updates and information about your niche, but it also helps drive traffic to your site and build up SEO.

Policies

The most important policies you should put on your website are: 

  • Privacy Policy
  • Terms&Conditions
  •  Shipping & Returns

Building an Audience & Getting Traffic To Your Website

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The beauty of selling on Amazon is that you don’t have to worry about driving external traffic to your products. Aside from Amazon Sponsored Ads and Facebook Ads, Amazon generates enough traffic to their marketplace. What makes Amazon unique is that the traffic is mostly buyers.

When it comes to your own website, getting traffic will be the major challenge. However, there are a number of ways to drive traffic(and sales) to your E-commerce store.

Pay Per Click Advertising

Like Amazon Sponsored Ads, pay per click marketing is very powerful in driving traffic towards your products. The most popular pay per click networks are Google Adwords and Bing, when it comes to these two however, you will have higher competition on keywords so your strategy has to focus on long tail, less popular keywords.

Blogger Outreach

This is a similar technique to the one Manuel used for his French Press Case Study. When you’re a new brand, chances are that few people know about you. In this case you have 2 options:

  1. Build an audience yourself which requires time and money.
  2. Leverage someone’s existing audience to gain exposure.

Bloggers are perfect for gaining exposure! They are trusted by their audiences and gain consistent traffic to their blogs. When choosing bloggers to promote your brand or products, take into consideration the following:

  • Are they well known and trusted in my category/niche?
  • How much traffic does their blog get?(use Alexa to check this)
  • Are they active on social media?
  • Are they experienced in promoting products similar to my category/niche?
  • What is their target audience demographics?

One advice is to find someone that truly fits your brand, audiences can tell if someone is truly passionate about your product(s), so be very careful in who you pick. Once you filter down the blogger(s) of your choice, you need to contact them. You can do this either via their website(normally they have a specific Advertisers page) or via social media. Based on experience, these two incentives work best:

  1. Money offer with no commission involved(This can normally range from $50 to $1000 depending on the blogger).
  2. A free product sent to them and they get commission for each referral. They can use the Amazon Associates program or you can create your affiliate program on your website.

The second option normally works best as the blogger will be more incentivised to promote your brand. Bloggers are a great way to drive high amounts of traffic both to your Amazon listing and your website. If a blogger proves very successful, a good option would be for your brand to sponsor the blog as you get a permanent advertising presence.

Social Media Marketing

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Social Media Marketing is the number one tool to drive traffic to your website and get exposure for your brand. Although building a following takes some time, you can drive huge amount of sales and traffic with targeted discounts or giveaways. The most popular social networks for E-commerce are:

  • Facebook – Great for all types of businesses and they have the best converting ads out of all social media networks.
  • Twitter – Although not very ideal for promotions and showing your products, it’s excellent for giving news, updates and connecting with influential people in your category.
  • Instagram – The most popular social network for E-commerce entrepreneurs, it’s design and features make it ideal to show your products. The only downside is that only the bio is clickable so you don’t have many options for driving traffic. However, it’s by far the number 1 tool for getting exposure.
  • Pinterest – Another great social media platform ideal to show your products and branding through images. It is the only social network that has a majority female following, so if your target audience is in this group, it is recommended to focus your efforts here.
  • Snapchat – This social media platfoorm is not ideal for every businesses, however, its popularity is growing and if you’re targeting millenials – you need to be on Snapchat.
  • YouTube – Out of all the social networks, YouTube has the most power to drive huge amounts of traffic and make your brand go viral. The only downside is that producing videos requires capital investment and a lo of time. A way to go around this is to send your products to YouTubers who target your niche, by doing this you leverage the audience of the YouTuber.

Conclusion

Building your own e-commerce store requires a lot of work and patience. However, the benefit of having your own platform and customers is very rewarding. While the Amazon platform will most likely always be the main source of revenue, having an additional sales channel that you fully control is the ultimate step towards having a strong brand.

We hope this blog post was helpful in clearing up some issues you may have when starting your own website and while e-commerce is a vast topic, this guide can surely point you in the right direction. In next week’s blog post will will dive into Social Media Marketing. Social Media has become a really powerful tool to drive traffic, sales and awareness of your brand – so having a social media marketing strategy is essential to quickly grow your customer base.

If you have any questions regarding this blog post, please leave a comment below. The aim of this series is to find out your concerns regarding importing & e-commerce, so we would really love to hear from you!

All the best & happy selling,

Duncan

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Zero to Hero: Build a Brand Series – Business Incorporation 101 – Part 2

Zero To Hero: Building a Brand Series

Business Incorporation 101: Part 2

Taxation & Overseas Incorporation

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In last week’s blog post, we had a brief introduction on the best legal practices and an overview on US incorporation. Today, we will go into more detail on how to manage your business effectively and also explore some of the best countries where to incorporate.

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P.S. This guide is only meant as a resource. While a lot of research has gone into proving helpful and accurate information – We are not lawyers. Before incorporating your business, especially in countries outside of yours, always consult with a qualified professional specialized in international laws & taxation.

The Ultimate Double Taxation Guide

Most E-commerce sellers come from a wide range of countries and sell in a wide range of markets. The most common ones are:

  • US residents selling in the US, EU & Asia
  • Europeans selling in the EU & USA
  • Individuals who either come from other parts of the world and sell in the US/EU
  • US/European residents who sell in other markets & countries outside Amazon

Most sellers normally pick one market, for example, the US, and start selling there. This is easy because when it comes to tax, you have to deal with:

  • US Taxation(sales tax, customs, import duties etc.)
  • Personal Income Tax based on your country of residence

Naturally, as you your business grows, you need to expand into other markets. This is where things get complicated as each country has it’s own tax laws & systems. In particular, when it comes to international tax, double taxation comes into effect.

What is Double Taxation?

Double Taxation is commonly referred to when income taxes are paid TWICE on the same source of income. It normally occurs when income is taxed at both at personal and corporate levels. There are two types of Double Taxation:

1. Juridical

This is when one source of income is taxed by two or more countries. For example, you’re a German resident who sells goods on Amazon US and you get taxed by both US and German authorities on the same income.

2. Economic

This happens when more than one person is taxed on the same income. This often happens when a company has multiple members/shareholders and the same income is taxed on that income(instead of redistributed amongst each member and personal tax is paid).

Important

Double Taxation is often a unintended consequence of international tax legislations. Countries and tax authorities try to avoid double taxation as much as possible and systems are in place to avoid you or your company paying twice on the same income.

International Double Taxation

International businesses are often faced with issues of double taxation. Income may be taxed in the country where it is earned, and then taxed again when it is repatriated in the business’ home country. In some cases, the total tax rate is so high, it makes international business too expensive to pursue.

To avoid these issues, countries around the world have signed hundreds of treaties for the avoidance of double taxation, often based on models provided by the Organization for Economic Cooperation and Development (OECD). In these treaties, signatory nations agree to limit their taxation of international business in an effort to augment trade between the two countries and avoid double taxation.

What is a Double Tax Treaty? Does my country have one?

Many countries around the world have signed agreements or treaties between them as a means to avoid double taxation. These are based on models provided by the Organisation for Economic Cooperation and Development(OECD). This is a life-saver for business owners as they often have issues of the income being taxed in the country where it is earned and then taxed once again once it’s moved to the owner/s home country(or residence).

To find out if your country of tax residency has a double taxation treaty with the country you do business in, check on both countries tax authority website. You can also search on Google by typing: “Country” + “ Double Tax Treaty” – replace the country field with the country you do business in(example: USA).

How can I avoid Double Taxation?

To avoid double taxation, there are two ways:

  1. 1. Speak with your accountant/CPA so they file for taxes correctly on your behalf.
  2. 2. Have a limited liability company(or the equivalent) – Limited companies have the ability to pass on their profits to their owners and pay personal income tax on the earnings.

The Advantage of Having a US LLC

As we saw last week, having a limited liability company in the US has a lot of benefits. However, perhaps the biggest benefit of all is the ability to make the LLC a disregarded entity. This means that any profits the LLC makes, get passed onto the member/s – so basically the LLC in itself never gets taxed, only it’s owners. This is perfect for those who are non-US residents and are part of a double taxation treaty with the US, as you can get taxed on your personal income in your tax residency.

Keep in mind that you still have to file a tax return with the IRS at the end of each financial tax year(normally April). This is a great benefit and when you form your LLC, is something you should definitely discuss with your CPA.

Tax regulations can be very confusing, unless you have experience in handling taxes on your own, always consult your CPA, accountant or tax authorities first. Double taxation can be avoided if there is a structure in place.

In the event you’re taxed twice on the same income, this can always be refunded back. However, it’s a long and bureaucratic process which can greatly reduce your cash flow and delays to your business.

Other Limited companies in other countries have the same structures as a US LLC, so make sure you’re aware of the tax laws before incorporating in a jurisdiction where there is no Double Taxation Treaty!

Offshore Incorporations

There is a common misconception surrounding foreign incorporations being labelled as tax havens. This is all depends on where you incorporate and how you declare tax – I would always recommend declaring your offshore company with the tax authorities back home. A good idea is to incorporate either:

  1. Where the majority of your business operations will be
  2. The country of residency
  3. Countries which have a very good legal, banking, and taxation systems – such as Singapore and Hong Kong.

Let’s look at some of the best offshore incorporation structures and what they offer.

British Virgin Islands(BVI)

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Warning: BVI has been recently in the news due to tax evasion. Currently, these jurisdictions are at a greater scrutiny from tax authorities in the US and Europe. Should you still want to incorporate here, consult with the tax authorities back home and make sure you declare your registered offshore companies to comply with the law.

Other jurisdictions under the public eye are Bahamas, Panama & Barbados.

The BVI are an idyllic paradise islands located in the Caribbean Islands known for it’s super-rich expat community & low tax rates. Here is a complete overview of BVI incorporation:

Main Features

  • Company documents are widely accepted by major international banks.
  • Fairly low yearly renewal fees.
  • Information about the owners, directors and shareholders is not public.
  • No property purchase restrictions in the BVI & freedom of doing business in any country.
  • Anyone can register a company in the BVI
  • Companies incorporated in other jurisdictions can be moved in the BVI

Requirements

  1. Must have a registered address inside the BVI, main address can be in any country. For this, you can easily use an agent or law firm to act as a registered agent.
  2. Minimum member requirements are 1 shareholder and 1 director.

Capital

BVI companies have to issue a minimum amount of shares on their behalf. The maximum authorized capital for 50,000 shares($1 value for each share) is subject to a government fee of $350.

Tax Rates

BVI companies pay zero tax for all it’s members, directors, officers & shareholders. This is what makes the BVI an attractive option.

Annual Fees

Each BVI company must pay the annual renewal fee of around $800 – 1000$. The fee mostly depends if you’re filing for renewal on your own or using a service.

Public Records

 Names of the directors, officers and shareholders are not filed with the BVI Register of Companies, not included in the Memorandum and Articles of Incorporation and not available for the public.

There are no accounting and audit requirements for BVI companies.

Time-frames of Incorporation

 5 to 8 business day from making the Apostille & documents. Most third-party incorporation services can register you in 1-2 business days upon receiving all documentation.

Overall Costs

$1200 Incorporation Fees & $800-$1000 yearly renewal. This doesn’t include any share capital for the company.

 Estonia E-Residency

The Estonian E-residency program is not quite an incorporation – However, it’s specifically designed to act as a digital identity. This is perfect for location independent entrepreneur who need a “base” in a European country. The E-residency is not a residency program, however, you can register an Estonian company which is also very attractive.

Features

  • Digitally sign documents and contracts.
  • Document verification and encryption
  • Form an Estonian company online. You need an Estonian address & bank account(which you have to fly in Estonia to open).
  • Merchant Accounts available
  • Tax Filing can be done online. However, tax residency must be established first.
  • In addition to this, people who enroll in the e-residency scheme will receive a smart ID which provides:
  • Document encryption & authentication
  • Digital signing of documents
  • Digital Identification

This scheme is truly unique as it provides a way to shift taxes & documentation entirely online. As more people are working from home or becoming digital nomads, having an online ID which provide top security features is a must. The E-residency only costs around €100 and the process is done entirely online.

Singapore

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Singapore is perhaps one of the best places to incorporate since it’s very entrepreneur-friendly and a strong financial centre of Asia and worldwide. The main attractive thing about Singapore is that it’s own government pushes for new entrepreneur to register their companies there. This makes the process more streamlined and you get a lot of help. The government website also provides a lot of information.

A limited company in Singapore is called a Private Limited Company and each registered company must bear the suffix Pte Ltd in all official documentation.

Features and Benefits

  • The Pte Ltd is a separate legal entity in Singapore. This means that the company liabilities are completely separate from it’s members and shareholders(ie You)
  • Singapore’s Pte Ltd. outlives the lives of its shareholders. Meaning the company stays active even if the owners pass away.
  • Registering a company in Singapore will give you a credible image and makes it attractive for business and investors.
  • When registering the company you have the option to pass the company to a new ownership if the need arises. This is a great feature as you can easily pass company ownership to investors and buyers in the event of an exit.
  • The first 300,000 SGD earned are eligible to a government tax credit of 50-100%, for incomes over 300k SGD, the corporate tax rate is 17%.
  • If the profit is already taxed on an income level, the Singapore PTE Ltd. Frees you from any capital gains.
  • If you’re not a resident of Singapore(ie a foreigner), you MUST appoint at least 1 local director – which can be either a Singaporean/a citizen or PR. However, if you want to shift operations to Singapore, you can obtain an EntrePass visa – Singapore’s employment pass.

Registration Process and Requirements

  • The entrepreneur must choose a unique business name for the business, preferably with an available domain name. A name check can be done and reserved also.
  • A Singapore Limited Company can have a minimum share value of 1 SGD, there is no maximum capital share value. The company can have a maximum of 50 shareholders.
  • Company must have a real address in Singapore and the local person appointed as director must be 18 years or older.
  • You must appoint a local secretary no later than 6 months from the date of formation.
  • Some private limited companies will require enlisting auditory services. This can be checked before applying for registration.
  • Some sectors of the economy require government approval before incorporating. Some of these sectors are finance, banking and insurance.
  • If you’re planning to set up the Singapore Limited Company as an offshore company, you must use a third-party service to file the application process. Foreigners are not allowed to file for registration for there own. Singapore has a visa-free policy of up to 90 days for most nationalities and you don’t need any special permits to form the company.

 

Hong Kong Company

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Hong Kong has long been considered a financial Mecca of Asia and it’s actually the place I would recommend to register an offshore company. Their banking system is excellent and it’s a very entrepreneurial country. The process is getting a bit more difficult, however, with the proper guidance, the incorporation process is fairly straightforward.

The most common type of business entity registered in Hong Kong is a private limited liability company. Limited liability companies are a separate legal entity for its owners compared to structures such as sole proprietorship. Anyone above the age of 18 can set up a company in Hong Kong.

I will list all the process and requirements for registering a HK Limited Company. Due to the complexity of the process and tighter regulations, it is recommended you engage a professional firm to handle the process.

Requirements for HK Companies

Company name – The name must be unique and needs to be approved before proceeding with incorporation.

Directors – Unlike Singapore, directors can be from anywhere in the world. You must appoint at least 1 company director and there is no requirement for the director to be a nominee shareholder in the company. Directors must be of at least 18 years of age and board meetings can be held anywhere in the world.

Shareholders – HK Limited companies allow a minimum of 1 and a maximum of 50 shareholders. There is no residency requirement of the shareholders and a single individual can own 100% of the business. Nominee shareholders can also be appointed and shares can easily be redistributed and sold.

Company Secretary  – The appointment of a company secretary is mandatory. The company secretary must be a resident in Hong Kong or have it’s official office/place of business in HK. The company secretary must be a different person in the case of a sole director or shareholder. The role of a company secretary is to maintain the company books and ensure compliance with the laws of Hong Kong.

Share Capital – The general norm is to have 1 share per owner, the currency of shares can be in any major currency and if transferring shares they are subject to a stamp duty.

Registered Address – To be able to register the company, you need to have a registered Hong Kong address. This must be an actual address and not a P.O. Box..

Public Information – Information about the company and it’s members is available to the public in compliance with Government laws. If you wish to keep details and names hidden, you can consult with a professional firm.

Taxation – Profits tax is set at 16.5% for profits made in Hong Kong. Only profits and income earned in Hong Kong are subject to the tax as HK has a territorial taxation policy – Meaning profits made outside Hong Kong aren’t subject to tax. There is no capital gains tax & withholding dividend taxation.

Compliance – It is mandatory for companies to maintain accounts. Accounts must be audited annually by a Certified Public Accountant in Hong Kong. Companies must also file an annual renewal fee and must hold an Annual General Meeting, 18 months from the date of formation. The subsequent years, the AGM must be held every 15 months.

Time-frame – It usually takes between 5 to 7 days to incorporate in Hong Kong.

NB: Although there is no official requirement to be physically present in Hong Kong, you must be present in order to get a Business Bank Account. It’s difficult(if not impossible) to get a bank account remotely. 

Documents Required

To set up a company in Hong Kong, the following documents are required:

  1. Articles of Association of the company. A copy is normally provided by the firm assisting the incorporation process.
  2. Incorporation Form that includes all of the following:
  • Company name
  • Registered address
  • Description of your business & sectors you will be operating in
  • Personal Details of shareholders, directors and company secretary
  • Member Liability
  • Share capital – Amount & No. of shares

If directors or shareholders are non-residents of Hong Kong, these additional documents are needed:

  • Copy of passport
  • Overseas proof of address
  • Bank Reference Letter

For resident shareholders and directors:

  • Copy of Hong Kong identity card
  • Proof of address

For corporate shareholders and directors who are registering a subsidiary in Hong Kong:

  • Copy of parent company registration documents such as Certificate of Incorporation and Articles of Association

NB: If your documents are not in the English language, they must be professionally translated.

Further Assistance

If you need further guidance on the best policies of registering a Hong Kong Company, Manuel & Michael Michelini from Global from Asia have just released a brilliant Udemy course. They explain all the steps in detail and Michael has extensive experience helping online sellers register companies in Hong Kong.

You can check out the course here:

https://www.udemy.com/how-to-start-your-international-business-via-hong-kong/

*Please note that the link is an affiliate link

Conclusion

I hope this very long blog post provides some clearance and options on incorporation. This can be a really confusing topic, especially when starting out. This is one area(the others being taxes, accounting & IP) where you should seek out professional advice due to the complicated nature & international laws.

However, the aim of this series is to guide you in the right direction and be protected from the legal aspect. The correct incorporation structure can have a lot of benefits for you and your business – whether it’s tax credits or legal protection of your personal assets. In the next blog post we will move over to business banking where we will explore some of the best accounts & practices to save you money.

I would love to hear your feedback on this series! Both myself & Manuel are trying our best to provide you the tools and information to expand your business, so any suggestions are welcome :)

All the best & happy selling,

Duncan