Expanding to Amazon’s Mexican marketplace

Are you considering expanding to international Amazon marketplaces? Is Amazon Mexico at the top of your list? Maybe it should be. 

With the frenzy to purchase Amazon businesses and the tremendous competition on Amazon.com, sellers and brand owners looking to scale their business should be investigating international Amazon marketplaces. Patricio Tellez, Co-Founder of ALGO+, joined Liz Downing and Cameron Yoder live and in-person at the Prosper Show in Las Vegas to talk about the tremendous opportunity this marketplace presents.

Patricio Tellez, Liz Downing, and Cameron Yoder, live from the Prosper Show in Las Vegas

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Watch the Hidden Possibilities of Amazon.mx Replay:

Note: The first 17 seconds of the video are blurry, but the picture gets crystal clear after that.

Key Takeaways

There’s a lot of opportunity on the Mexican marketplace

Patricio explained how the Mexican marketplace is currently smaller so you can get established without having to deal with a lot of competition. 

“It’s a really fast-growing marketplace without a lot of competition. So it’s a rare situation on an Amazon marketplace, where you can really get into that marketplace and just not have a lot of competition and launch your products and get reviews and get traction without having to go through the same efforts or investment as you would have to even in a European market.” – Patricio Tellez

Advertising can be less expensive in Mexico

Keywords that are competitive in the U.S. may have little to no competition in Mexico, so you can go after those keywords with less ad spend and get results.

“Go and look this up yourself: many keywords that you would think are highly competitive, you might not see PPC sponsored product. Things that would be highly expensive here in the US, there might not even be competition for those in Mexico. The right product, if you know how to optimize have the right pictures and you know how to run your ads and having the right tools, you can kill it in Mexico. You’ll see results and be highly profitable really fast.” – Patricio Tellez

The Latin American region is growing

Mexico is the fastest-growing ecommerce market in the world and it’s situated in the fastest-growing ecommerce region in the world, which is Latin America. It’s growing because people are gaining access to the resources they need to shop online.

“So Latin America is the fastest-growing region, mainly because it has so much of its population that hasn’t had access to internet and doesn’t have access to the financial markets, to banking. But that’s changing fast…. If you’re an early mover and getting to the marketplace and can launch a brand and build a business and start growing there, there’s only a lot of upside. So it’s just going to keep growing.“ -Patricio Tellez

There’s unmet demand on the Mexican marketplace

You can get an idea of the unmet demand by searching for U.S. best seller products in Mexico. There won’t be as many listings and most will be international, not fulfilled by local FBA. So there’s an opportunity to meet this unmet demand. 

“There aren’t enough listings. So if you have a brand today that is selling, if you have products, then that’s a really low hanging fruit that you can take advantage of that nobody’s looking at.” – Patricio Tellez

Products that sell in the U.S. are likely to sell in Mexico

Liz raised the important point that sellers need to think about localization when they’re considering expanding to a new marketplace. But Patricio eased those concerns by explaining that products that do well in the U.S. tend to also do well in Mexico.

“Consumer habits in Mexico really follow very closely what’s happening here in the US. Maybe there might be a lag before– maybe 10 years ago it would be a five-year lag. And now with the internet that might be anywhere around two years lag for the trends and the big things that happen here and go to Mexico. And that’s to say that most anything that works here in the U.S. will work in Mexico.”  – Patricio Tellez

Consider sourcing products in Mexico

Patricio is working on a project that will be launched soon that will help sellers to connect with manufacturers in Mexico. This can reduce supply chain costs and complexity by manufacturing the products near where they will be bought. 

“It can really be a lot more profitable in the end to source from Mexico than it is from China. Because in the end, you’re going to have better lead times, you’re going to have better control of your supply chain from start to finish, product delivery here, better communication… Our financial system is completely integrated, so it’s very easy to make payments and receive reimbursements. Our legal system works very similarly as well, so that you can have contracts drawn in Spanish… For all those reasons I think if sellers today have the opportunity to source products in Mexico, then it’s a no-brainer.” – Patricio Tellez

If you can, import to Mexico and sell FBA in Mexico

Many products on the Mexican marketplace are actually being fulfilled from the U.S. That increases shipping times and costs to consumers. Patricio suggests if you can to import products to Mexico and fulfill by FBA in Mexico to make a more compelling offer for your shoppers. This does require registering as a Mexican entity and getting a tax ID. Algo+ can help sellers to deal with these obstacles that prevent them from selling in Mexico.

“What I’m talking about is getting products imported to Mexico and selling FBA in Mexico. That will make a huge difference. That’s what really will make you grow your business.” -Patricio Tellez

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