Believing that consumers are looking for quality, value-for-money home fragrance, Edison Lim experimented with different scents in his bedroom with the hopes of creating his own aromatherapy line.
It was in his HDB flat, where the 26-year-old set up his home fragrance brand, Pristine. Although it started off as a side hustle in 2019, the business has since grown via e-commerce to serve customers worldwide, from Singapore and Canada, to the United States (US), and United Kingdom (UK).
Last year, Pristine’s e-commerce business raked in S$1.6 million in yearly revenue across both domestic and international sales, selling reed diffusers, scented candles, and aroma concentrates.
Similarly, an ex-corporate lawyer and a tech executive co-founded a matcha business, Naoki Matcha, back in 2016, after being interested in generating some side income while celebrating their appreciation for the Japanese tea product.
As the online sales grew significantly, 30-year-olds Samuel Loo and Chiam Sing Chuen decided to commit to growing the business, and went full-time from 2020. Today, they sell to customers in Singapore, as well as in the US and UK, and from the initial six figure sales in their first year, they now bank in six figures of monthly sales from selling Japanese matcha tea products on Amazon alone.
These Singaporean founders are only in their late 20s and early 30s this year, but have become full-time e-commerce entrepreneurs, doing the things that they love.
They were able to do so thanks to Amazon which operates 20 global stores, including the domestic Amazon.sg site, global Amazon.com, and Amazon European stores, which allows them easy reach to overseas consumers without even stepping out of Singapore.
Before joining Amazon as a seller, Edison, founder of Pristine, did research on e-commerce sites to grow his business. After seeing his friends’ businesses thrive on Amazon, as well as its efforts to onboard new sellers on its domestic and global stores, he was convinced to launch on Amazon.
The sheer size of Amazon’s market presence, coupled with a readily available consumer base, sealed the deal for Edison.
“Singapore has a relatively small total addressable market compared to the West. I wasn’t familiar with the western market and our physical setup was still within Singapore. Hence, we needed a partner or online service provider that commanded strong web traffic with a readily available, sizeable consumer base,” said Edison.
“The international reach and ready customer base that Amazon has is phenomenal! Amazon is the place to be if a seller wants high reach and potential customers for his products. For instance, all we have to do is get the products the customers want, and Amazon will handle the rest – the storing, shipping, packing, customer service, and returns! That’s how we started becoming a global brand,” said Edison.
From online newbies to top sellers
Although these founders may have only had limited knowledge in starting their e-commerce businesses, that was not a stumbling block for them. Amazon’s variety of tools and services, along with its Amazon Service Provider Network of third-party service providers ensures that new sellers have what they need to kick things off – not only online but also globally.
On Amazon, managing the day-to-day e-commerce sales is so much easier and more business-friendly than running a traditional online shop, confessed Pristine’s NAM & Europe general manager Jeremy Teo.
Amazon is easy to use and applicable for someone who does not have e-commerce knowledge. “In my opinion, it’s generally easy to list a product as it takes about six steps – product identifiers (barcode), create listing, offer details, product image, write product descriptions, and finally, keywords,” he shared.
Logistics, fulfilment and customer servicing can often take up a lot of time, but with Fulfilment by Amazon (FBA) available globally, these aspects move faster and there’s no need to worry about customer acquisition or operations. For a small urban city like Singapore, with FBA, customers get their Prime-eligible orders the next day, and even in huge countries like the USA, within two days. FBA also helps to free up time for brand owners to manage more value-adding activities like product research and development and brand building.
FBA is a service that helps businesses grow through Amazon’s fulfilment network. Businesses send products to be handled by Amazon’s global logistics infrastructure of 175 Fulfilment Centres worldwide.
“FBA completely took care of our logistical needs when it came to selling internationally. As we expanded beyond Singapore, Amazon quickly took care of storing, picking, packing, and shipping our products across the US, the UK, and Canada, allowing us to focus on customer needs and product quality. Most importantly, Amazon has helped to free up time for us to grow the business and innovate better products while it handled our customer service,” Jeremy shared.
“You don’t have to pay for digital marketing to drive traffic to Amazon, since it’s the largest e-commerce store in the world. The volume is bigger than any marketer can dream,” said Jeremy.
This large pool of Amazon shoppers – over 200 million Prime members and 300 million active customers – helps sellers reduce costs in scaling and acquiring customers, especially in overseas countries which local companies might have no networks or set-ups, but want to expand to.
Edison said that Amazon sales picked up really fast for Pristine, as it ranked well on keyword searches. Investments on the product’s branding and messaging also helped the brand get healthy sales revenue growth year-on-year.
Currently, for Pristine, Amazon contributes to 30 per cent of its total sales. “In the last nine months since we started selling on Amazon, we have achieved a revenue growth of 20 per cent, and sales have been steady as we continue to expand with new products,” said Edison.
Despite it being a small and medium-sized enterprise (SME) and having limited initial experience, the business was able to stand out and dominate the e-commerce space by leveraging Amazon’s global base and logistical strengths.
Amazon has dedicated country stores so SMEs in Singapore can sell their products in the US, Singapore, and internationally to capture a wide market, all while being based here.
“So long as you offer a great product, Amazon can find you the customers. Amazon is one of the most popular product recommendation engines shoppers use to find products online worldwide. For large markets like North America, that means there are millions of potential buyers – even for the most niche products,” shared Naoki Matcha’s founders Samuel and Sing Chuen.
Naoki Matcha started in 2016 as a side hustle that both founders decided to work on together as they were interested in entrepreneurship. Back then, they did not know much about matcha beyond enjoying it personally as a type of tea. They started on Amazon.com first to trial out the demand. Over the years, their own product knowledge and network in Japan grew in tandem with the business. Today they offer several types of matcha products from different tea regions all over Japan.
“Overall, the experience in growing our business via Amazon has been amazing. We spent less than S$10,000 to “launch” Naoki Matcha and everything was bootstrapped by the two of us at the beginning. FBA has been instrumental to our business growth, given how scalable it is. When we started out small initially, our first shipment of matcha was just 10kg. After several years in the business, we now sell a few tonnes of matcha to thousands of individual customers every year. Having last mile shipping support via FBA has been a lifesaver.”
Samuel credits FBA as the key that made international opportunities viable even for small businesses like theirs. With a massive fleet of 175 Fulfilment Centres worldwide, Amazon reduces seller headaches in logistics and customer service as it receives, stores, picks, packs and ships the order to the end customer while handling customer service and returns.
Naoki Matcha’s growth and traction in overseas markets gave them the confidence to offer their products in Singapore in 2020, four years after first launching their business. And they’re still not done growing in the US. “Our Amazon sales in January 2022 are about 60 per cent higher than what they were in January 2021. Aside from the e-commerce-led business-to-consumer sales in Singapore, there is also some growing interest from cafes and food establishments here,” shared Samuel and Sing Chuen.
Going global by scaling fast and understanding customer insights
Naoki Matcha now sells in Singapore, the US, and the UK. The immense customer base and ease of doing business via FBA continues to propel Naoki Matcha’s sales in the US. Presently, sales on Amazon still contribute more than 50 per cent of total business revenue, said Samuel. “Wherever they are in the US, anyone can purchase our product and receive it within two days if they are an Amazon Prime member.”
FBA provides scalability of logistics operations for SMEs, shared Samuel and Sing Chuen. “Whether you sell 10 units or 10,000 units of an item, the process is the same. It means you can grow very quickly without drastically increasing your own fixed costs as a business owner,” Samuel said.
The Singaporean founders are targeting a market with great potential. According to Amazon’s report on micro, small and medium-sized enterprises (MSMEs), e-commerce exports could potentially reach S$3.5 billion by 2026, with 73 per cent of this earned by MSMEs.
Currently, e-commerce sellers in Singapore earn an estimated S$1.4 billion from e-commerce sales made to overseas consumers annually, with 45 per cent of these earned by MSMEs. This reflects room for growth and massive opportunities for local SMEs to scale globally.
There is a clear benefit in selling beyond Singapore, agreed Pristine’s founder Edison. “Singapore is a relatively small market, and an even smaller one when you are in a business of selling non-essential products. To grow and stay afloat, we expanded overseas too,” he said. “With Amazon, we are proud to announce that Pristine is now an international company and is available in the US, Canada, and the UK!,” he shared excitedly.
Selling in mature e-commerce countries like the US and UK can sound daunting to small local brands as they are less familiar with customer tastes and preferences. As advice to other brand owners, Jeremy said: “The e-commerce market is definitely not too saturated for new entrants since there is evolving data that you can compare against to understand where and how your brand can come in and if there is a demand for your products.”
Once Pristine established that there was a large volume of keyword searches that matched the product, it was more confident to meet customer demands overseas: “We took time and researched extensively to understand the keywords that people are using to find related products, and how good existing sellers (our potential competition) were at in meeting that demand. That’s how we figured out how to grow quickly and reach more customers with Amazon.”
The pandemic also spurred online sales and work-from-home and wellness related product purchases for Pristine: “During the pandemic, many customers wanted to scent up their work stations to enjoy working from home. We continue to see that our hotel and signature series outperform our garden scents products year over year.”
Why Amazon is for every seller – from side hustlers to established SMEs
Amazon is definitely not just for the “big boys”, said Jeremy. The e-commerce store also debunks the idea that your business has to be physically overseas to sell, he added.
“Even though there’s a huge number of products on Amazon, there are definitely opportunities to sell and make a profit across the stores. There’s real data on profit margins and business performance that you can look at to understand what you need to do for your business,” Jeremy said.
“Amazon actually levels the playing field in favour of the smaller enterprises. It’s the one channel where the huge scale of the leading incumbents does not give them a proportionally huge advantage,” added Samuel and Sing Chuen.
One way to stay on top in this growing saturated e-commerce space is to carve out a unique selling proposition that keeps you attractive to customers. “It starts with the product and how it fulfils the needs of the customer,” Samuel and Sing Chuen suggested.
“We recommend Amazon.com for more niche categories/products because the size of the US market makes it possible for you to grow to a stable size just by selling on Amazon.com alone. As Singaporeans, most of us are fluent in English and regularly consume American media and content. It’s not too hard for us to empathise with American consumers and identify their needs,” the founders said.
For new entrants building up their brand awareness in new Amazon Stores, the Naoki Matcha founders also leverage Brand Building tools such as Amazon advertising to gain brand awareness. “Generally, we find that Sponsored Products (On-Amazon advertising) is very useful for getting some initial buzz for your newly-launched product,” the founders shared.
Both Pristine and Naoki Matcha founders agree on the importance of brand building and brand protection. “Brand Registry is a must-have for anyone selling on Amazon”, quipped the Naoki Matcha founders. Brand owners like them can gain access to brand tools such as a dedicated Brand Store, Enhanced Brand Content to showcase their brand, Sponsored Ads and brand protection tools to protect against counterfeits.
Tools such as Amazon Vine (available on Amazon.com) have also enabled Pristine and Naoki Matcha to get customer reviews for their products so that they can gain more brand advocacy in new Amazon global stores as a new entrant. Amazon Vine invites the most trusted customers on Amazon to leave reviews on the products and therefore attract new shoppers by presenting honest and unbiased feedback.
Globally, Amazon has been continually developing more ways to connect customers with the products offered by its small business sellers. Last year, Amazon invested US$18 billion to support SMEs and contributed an additional US$100 million to promote small businesses during Prime Day and throughout the holiday season.
In October 2021, Amazon also hosted its first-ever annual Seller Boot Camp, and in January 2022, the Singapore Seller Summit which helped small enterprises arm themselves with the knowledge, resources, and connections to sustainably expand their business locally and globally. Free monthly webinars and seller sharing sessions are also organised regularly.
“We want to enable more local businesses to expand their customer base and reach a global audience through the 20 Amazon Global Stores worldwide, as supporting SMEs is a fundamental part of our work and an extension of our customer-centric culture. Our success depends on their success,” said Jan Lim, Country Leader Singapore Marketplace for Amazon.
There are currently over 255 innovative tools and features, including seller education resource hubs such as Amazon’s Seller University to help retailers of different types and sizes grow their businesses effectively.
In Singapore, Amazon continues to promote small businesses on a dedicated storefront on Amazon.sg, featuring local brands’ founding stories and a plethora of products in categories such as electronics, kitchen and dining, health and personal care, toys and games, groceries and more. This provides small businesses with more marketing exposure for their products on Amazon.sg beyond big events such as Prime Day and Cyber Monday/Black Friday.
To encourage more SMEs to come onboard, the e-commerce giant has waived its monthly seller subscription fees on Amazon.sg from now until December 31st, 2022.
Both the professional and individual plans for sellers on Amazon.sg are now free. Original fees for the individual plan was at S$1 per unit sold while its professional plan was at a fee of S$29.95 a month.
For Amazon.com, the individual plan for sellers costs US$0.99 per unit sold and US$39.99 per month for the professional plan. New sellers selling globally can enjoy up to $50,000 in potential benefits.
Sign up here today to try out Sell on Amazon services and see for yourself how it can scale your business to greater heights with ease!
Featured Image Credit: Naoki Matcha, Pristine