Amazon is growing on-demand services after reporting a 20% sales increase in 2015.
Thinking globally from day one, Tech Armor sold 2.5 million units it its first full year.
Manufacturer Tech Armor began selling its branded screen protectors and phone accessories through TechArmor.com and online marketplaces in late 2012, and sales have taken off like a shot. The Redondo Beach, CA-based e-retailer shipped 2.5 million units last year, with 70% of its sales coming through the marketplace listings it maintains on Amazon, eBay, BestBuy.com, Newegg.com and Rakuten.com Shopping.
Co-founders Eric Tong and Joseph Jaconi say they planned to sell internationally from the start, and began selling to Canadian consumers in January 2013. It sells to U.S. and Canadian consumers on TechArmor.com, but Tong and Jaconi say the vast majority of its sales, domestic and international, today come through Amazon.com, which was the first place the manufacturer listed Tech Armor products for sale. Many of its screen protectors rank at or near the top in Amazon search results for such products.
However, global expansion wasn’t always easy. Tech Armor ran into some delivery issues when it first ventured into Canada. At the time, it was shipping direct to consumers via the U.S. Postal Service, but its packages sometimes got held up at the border. “Products got stuck in customs and deliveries were delayed,” Tong says. “We were not delivering the same experience to customers there as we were in the U.S.”
Knowing already that they wanted to ship globally, Tech Armor executives decided to switch from handling shipping itself on orders placed on Amazon to using Fulfillment by Amazon, and letting Amazon handle the logistics of cross-border delivery through its Export feature. Fulfillment by Amazon (FBA) is a warehousing and shipping service managed by the e-retailing giant’s Amazon Services division. FBA Export lets U.S. retailers ship at no additional charge to customers in more than 60 countries, although there are some restrictions on products that can be shipped internationally through the program. Amazon.com Inc. is the No. 1 e-retailer in Internet Retailer’s newly published 2014 Top 500 Guide, which ranks e-retailers by their North American sales, and No. 1 in the 2013 Europe 500, which ranks e-retailers by their European sales.
To get started with FBA, Tech Armor shipped stock from its Southern California warehouse to Amazon’s distribution center in Hebron, KY. From there, Amazon spread Tech Armor’s stock around its U.S. warehouses to meet shipping demands and shipped from the U.S. centers into Canada. After consumers in Canada and Europe started buying more from Tech Armor through the Amazon.com site in the U.S., the e-retailer created listings on Amazon’s localized sites in Canada, Germany, France, Spain, Italy and Japan, and warehoused goods through FBA facilities in Canada and the United Kingdom. Most of Tech Armor’s products are manufactured in Asia, and to save on shipping,import costs and time, its suppliers now ship stock directly to the international FBA facilities on Tech Armor’s behalf.
In 2014, Tech Armor began to also house stock at FBA facilities in Italy and France, and Jaconi says it’ll add facilities in Germany and Spain in the coming months. “The reason we started to move directly into those markets and warehouses was the service standpoint,” Jaconi says. “We feel it is a much better experience [for consumers] to have the products the next day. We are investing and believe in the future of that.” With stock residing closer to customers, FBA often gets Tech Armor orders to consumers the next day, he says.
All 96 of the distribution centers Amazon operated globally as of September 2013 offered FBA storage and shipping for marketplace sellers, including one in India that is only for FBA at this time, says Tom Taylor, vice president of seller services at Amazon.
Tong says outsourcing most of its shipping to FBA is a big reason why Tech Armor has been able to scale quickly on a global scale. “We let them do the shipping and it allows us to focus on other areas,” he says. Tech Armor is currently in talks with Amazon India to see how it can sell and fulfill products there; it expects to be live there at some point this summer. Tong says Tech Armor is also looking at its options for selling on MercadoLibre in Latin America and in China on Tmall, one of two huge online shopping portals operated by Alibaba Group Holding Ltd., which has announced plans for an initial public offering in the United States this year.