Back in 2011 several events (which I will write about in a future post) led us to the understanding that relying on one sales channel to support your livelihood is too goddamn risky, we had to start thinking about spreading the risk.
Why Going Multi-Channel Cut Down On Risk
Spreading the risk for us meant going multi-channel.
I’ll give a short example to explain what it means to your bottom line:
Scenario #1 – single channel:
You sell only on eBay and you make $5K monthly income. One glorious morning you wake up, open your email box and find a message from eBay, which reads something like “your account has been suspended and all listings removed”.
In a heartbeat you went from $5K to $0K, just like that. You are left with no income, no way to pay the bills, no money to buy the most basic things to live.
Scenario #2 – multi channel:
You sell on three channels which make up 100% of your income in the following manner:
- eBay – 40% ($2K)
- Amazon – 40% ($2K)
- your own website – 20% ($1K)
One glorious morning you wake up, open your email box and find a message from eBay, which reads something like “your account has been suspended and all listings removed”.
Sure, you lost $2K and that hurts. BUT, despite the drop in income, you are left with $3K (instead of ZERO), which will still pay your bills, buy food, and support your family.
Let’s Go Multi-Channel!
Now let’s go back to where I started – Spreading the risk for us meant going multi-channel.
Going multi-channel means learning a whole new sales channel, understanding how you get paid, what sort of logistics you need to have in place, what are the rules of that channel and can you comply with them, basically all the things you went through learning how to sell on eBay, all over again just this time you have some experience with one channel already so the learning curve is higher and things are simpler in that sense.
We decided on Amazon because it’s the most well recognized marketplace for online sellers and the most trusted website for online shoppers.
Amazon…A to Z (Except When It Came To Getting Paid)
For sellers outside the US and Western Europe it’s been almost impossible to create a business account on Amazon because of the payment methods Amazon accepts.
Back in 2010 when we decided to start selling on Amazon, we didn’t have this blog to help us with practical advice so we had no idea that Payoneer or WorldFirst existed, the only way my partner Victor and I could open a business account on Amazon.com (the USA sales channel) was to physically open a US bank account.
I remember how Victor had to literally travel to the States and go from bank to bank until one bank finally agreed to open an account for us, and that was our ticket to selling on Amazon.com.
If we only knew Payoneer back then, it would have saved us thousands of dollars.
Side note: Payoneer is a full-scale solution for receiving and sending international payments. For the purpose of this article, we are focusing on one of their services, which helps Amazon sellers receive Amazon disbursements.
How we used Payoneer to get into Amazon.com (and beyond)
The magic of Payoneer is simple yet powerful: When Amazon sellers sign up to Payoneer, they get a local receiving account, which allows them to receive Amazon disbursements in USD as if they had a local US bank account.
Earlier this year, Payoneer announced that it will be featured within Amazon Seller Central (US, EU, and UK) as a trusted way for sellers to receive USD, EUR and GBP disbursements. Instead of opening up a US or European bank account (like Victor and I were forced to do), sellers can now sign up with Payoneer directly from Amazon Seller Central, with just a couple of clicks.
Amazon disbursements are sent directly to your Payoneer account and you can then withdraw your earnings to your local bank account or to the Payoneer Prepaid MasterCard®, which you can use at ATMs, in stores, or online anywhere in the world.
You can also use Payoneer’s ‘Make a Payment’ service to pay contractors, suppliers, team members etc., even if they don’t yet have a Payoneer account. The best part- it’s FREE.
We asked VP of Marketing, Jonny Steel for more insight on Payoneer:
“Our goal is to empower Payoneer customers to grow their businesses by enabling them to pay and get paid as easily globally as they do locally. We are very excited to team with Amazon and to continue our rapid growth in connecting the world’s leading ecommerce marketplaces to sellers worldwide. Whether you are selling on Amazon, Lazada, Newegg, Wish (or others) Payoneer is here to help you receive your funds in a fast, secure and low cost manner.”
Here is more about Payoneer from Xia Zhaof the Director of Sales at Bestek – a Chinese manufacturer of portable chargers (and #1 supplier in the car charger industry) selling on Amazon:
“Payoneer offers us a number of advantages: First of all, it’s a safe and convenient way to receive and withdraw payments and avoids foreign exchange settlement limits. Second, we save a significant amount of time, costs and effort – I can transfer CNY to my local Chinese bank account in days. Third, without the pain of opening and maintaining an offshore bank account our risk is considerably reduced. Fourth, Payoneer saves us a lot of time to convert U.S. dollars to CNY, without the headache of running to the bank and submitting papers to declare the conversion.”
How we used WorldFirst to get into Amazon Europe
About six months after we nailed down our presence in Amazon.com market and started generating nice cash flow, as part of our risk management strategy (remember my opening paragraph?) we decided to expand to Amazon Europe which included five major markets:
- Amazon UK
- Amazon Germany
- Amazon France
- Amazon Italy
- Amazon Spain
In order to start selling in those markets we had to have a European bank account….which we obviously didn’t have.
This time we decided to do a thorough research before taking a plane to Europe and bagging one of the local banks to open an account for us.
We stumbled upon a UK company which proved to be the perfect solution for us not only for the UK but to the entire European Amazon market!
WorldFirst operates in a very similar way to Payoneer: you open an account with WorldFirst which is linked to your Amazon account so that funds you earn on Amazon are transferred to your WorldFirst account from which you have the full freedom to either withdraw the funds to your local bank account or use them to pay suppliers all over the world.
I’m not going to dive into comparisons here as we actually used both and it made our lives so much easier, but for the simplicity I would suggest using one solution.
Summing it up
I’m sure that there are other payment gateways out there, but if we didn’t have first-hand experience with them we cannot provide any practical advice on it.
We do have lots of experience with Payoneer and WorldFirst which proved to be perfect for our needs and we are happy to share this experience for every seller who’s in the same situation where we have been when we decided to go multi-channel and didn’t know how to solve the payments issue.
By the way, you can use just one solution for all your Amazon accounts, just try both and see what fits you better.
One final note, with any solution you use I believe that one of the most important features is the customer support you get, when dealing with payments it’s as important as any other feature (if not more). Being an independent non-sponsored blog, we spend time sharing our experience to help online sellers grow their business, I can honestly say that the customer support provided by the two solutions I’ve discussed is superb, during the last eight years I’ve used literally tens of online services (logistics, design, marketing, customer support, crm, payments, inventory, marketplaces, communications, shipping, suppliers, productivity tools and much more) and when it comes to support and real-time responsiveness WorldFirst and Payoneer are really truly up there with the best of them.
P.S I will be more than happy if you could share your thoughts in the comments area to help our community make informed decisions at payment solutions cross-roads.