Are you a small or medium sized business looking to export to Japan?
We offer a low-cost, low risk, high return solution for Japan Market Entry.
About the Author
Originally from the UK, Des arrived in Japan in 1993 and started his first business there in 1998.
Since 2007, Des has run a natural health products import business based in Osaka which includes selling on Amazon Japan, Rakuten as well as wholesale channels.
“There are so many misconceptions about selling to Japan. One of the first is that you need to break the bank in order to get started. That is not necessarily the case. Having met with many business leaders who, despite success domestically, were rather in awe of exporting, I came up with a practical solution where businesses can leverage our existing network – our first class warehousing and Customer Support Centre centrally located in Osaka – and benefit from our management team’s 10+ years of expertise in dealing with Japanese import customs regulations.”
Des currently resides in Australia’s Sunshine Coast where, as well as exporting Australian health products to Japan, China and Hong Kong, he is passionate about helping other businesses enter Asian markets.
“It sometimes feels like you’re walking hand in hand with someone into a darkened room and just switching on the lights for them, showing them where everything is, how it works and that it’s not all that complicated after all.”
SUKIRI Pty Ltd
I want to sell to Japan but have never exported before, don’t speak Japanese and don’t have a clue where to start.
Well, that’s why you’re here on this page reading this. It’s not rocket science and we’re here to take away the mystery.
When people learn that I’ve been doing business in Japan for almost two decades now, one of the first questions I’m asked is…
“What sells well in Japan?”
…and I always give the same answer…
“Well, what sells well here (in your home country)?
If it’s a good quality product and popular in the West, it’s more than likely to sell well in Japan.”
So OK, that’s rather simplifying a complex answer and not giving the question its full respect. Of course, some products sell really well in Japan; health and beauty products, tech products, pet goods, to name but a few but my point is that we’re not that different as a people. Take away the superficial differences in language and culture, only absorbed by growing up in a particular society, we’re all very much the same.
Back in the 90’s, when living in Japan full-time, I was always fascinated by the differences in fashion, food, gadgets, you name it, between those in Japan and the West. I’d be using a tiny state of the art fliptop cellphone only to have to rent a “brick” on a trip back to Europe. It seemed ludicrous that the West was so far behind. And then witnessing trends one year in Japan, be they Pokemon, platform boots, you name it, only to see the exact same trends come in 2 or 3 years later in the UK. It worked both ways. Western imports such as supplements, cosmetics, kitchen tools, etc. would sweep through Japan but it was the time lag of several years that was always fascinating.
Now with everything online, trends and brands are global almost instantaneously. Anyone who’s travelled the globe in recent years will despair at how generic the planet is becoming.
So back to my point:
What sells well in Japan?
Japan likes and expects…
- I could repeat it again
- ORIGINALITY – things that are “new”
- QUALITY PACKAGING & PRESENTATION
- COOL FACTOR
- CUTE FACTOR – if your product or brand has a cute, cuddly factor, all the better. Japan does “cute” like no one else and why not!
- CUSTOMER SERVICE
- CUSTOMER SERVICE
- CUSTOMER SERVICE
- you get the point
Asia Market Entry: JAPAN FIRST
Your Japan Success Story
Japan is the region’s trendsetter. It is the country many other Asian countries such as Korea & China still look to for up and coming products, brands, new trends.
If your product is selling in Japan, it will immediately increase interest from buyers in other countries in the region. So if you’re considering exporting to Asia, Japan is a great place to start.
The Traditional Export Route
Find a distributor for your product and sell to them wholesale. Sure, but how? It can certainly be done but Japan is a tight wholesale market. You have the “uber” wholesalers and then a myriad of middlemen before the end user.
Find someone online? Who can I trust? Trade fairs in Japan? Sure but that’s a huge amount of effort and investment not only financially but in time and manpower and no guarantee of success. And no understanding of the business culture or language can be a huge hurdle.
Even if you do find a distributor, there’s no guarantee they’re going to invest in promoting your product and make a success of it. You may just be one of hundreds of brands in their portfolio.
Typical Wholesale Margins
Take the following example; let’s say your product retails for $100 per unit.
Retailer / Wholesaler
Will expect at least 50% margin so your wholesale selling price would be at most $50.
Also be aware that most Japanese retailers will only accept consignment orders.
Will typically want 20-30% margin so your selling price to a distributor would need to be $20 or $30.
They will likely demand exclusivity which ties you into a contract for several years with an unproven partner.
SELL direct to the Japanese public via Amazon Japan
Why Amazon Japan?
Here are just a few reasons why we recommend Amazon Japan for initial market entry for overseas SMEs to Japan;
- Account setup is very easy and can be done in English
- The admin panel / support pages can all be viewed in English
- Low cost monthly fees (4900yen/mth)
- Amazon pays you sales revenues every two weeks direct to your overseas bank account
- Selling direct to the end user (B2C) maximises your profit
- Consumers love to buy direct, no middlemen
- You maintain 100% control over your brand messaging
Amazon Japan has an order fulfilment service called AMAZON FBA (Fulfilment By Amazon).
Amazon FBA offers;
- Same day, next day delivery
- Scheduled delivery in 2 hour bands
- Cash on Delivery Payment Option (COD is big in Japan)
- Customized gift wrapping for Japanese seasonal events
Anyone who is serious about succeeding in the Japan market should be looking to offer their Customers this level of fulfilment.
IMPORTER OF RECORD
In order to import goods into Japan, you need an Importer of Record which has to be a registered Japanese corporation.
Our corporation in Japan has been importing from around the world since 2007 and acts as your importer.
As the importer, under Japanese law we are liable for your products. Note your brand will be covered by our liability insurance at no extra charge to yourself.
Setting up your store on Amazon Japan
Just provide us with your product and brand information, images, etc. via email.
Our native Japanese staff translate and build your product pages on Amazon Japan, optimizing text for search engines.
Your online store is up and ready to sell to 127 million Japanese shoppers.
Stocking your shop: Ship to Japan
You prepare, pack and dispatch your goods to Japan – including the correct paperwork we provide you with.
We deal with Customs taking care of all necessary paperwork and receive your goods at our warehouse in Osaka, central Japan.
If requested, we can carry out QC (Quality Control) upon arrival. Japanese product information labels are added to every product in line with Japanese law. These can also be applied prior to shipping. Then the shipment is prepared for Amazon FBA if not already so.*
We ship your goods direct to Amazon’s FBA Warehouse (nearest is 30 minutes down the road) ready for sale. Your shop is now fully stocked and ready to take orders.
*AMAZON has notoriously strict guidelines for receiving product including correct labelling, barcoding, the way products are packaged, separated by batch numbers, expiry dates, etc. Anything not right will result in product being returned. Our warehouse staff ensure product is FBA ready.
Orders come in to your Amazon Japan store. Amazon Japan send payments direct to your designated bank in your home country every two weeks. This is excellent cash flow for SMEs.
If requested, we take care of all store management and Customer Support for you, offering both telephone and email support. At any given time, six of our highly trained girls based in Osaka are at the end of a free dial (toll free) number.
Sounds great: How much does this cost?
AT A GLANCE
Set Up Cost: AUD$1037 (USD808, GBP598, EUR673)
for a fully stocked Amazon Japan store with 1 SKU
Lead-time: 3-6 weeks
Fully Managed Store (optional service): AUD$99 (USD77, GBP57, EUR64) + 10% of gross sales / per month
Fully managed Amazon Japan storefront with Telephone and Online Customer Support plus Product Liability Insurance.
Step 1: PRE LAUNCH
Initial Base Fee
Products requiring pre-approval (e.g. Cosmetics, Food & Drink Products, Pet Food, Whole Food Supplements, Electrical Goods, Kitchenware, Toys, etc.): $1500 one-off setup fee
All other products: $499 one-off setup fee
Translation of all paperwork and submission for Customs clearance. Process paperwork on your behalf to gain import permits for each SKU*. For certain items further paperwork will be needed, e.g. for food & beverages, a full ingredient list and manufacturing process, for electrical goods PSE Certification, etc.
NOTE: For some products, any changes to the ingredients or manufacturing process of a product, under Japanese law a new import application will be needed. Also, bear in mind any changes to Japan import laws may also warrant a new application.
TIMEFRAME: 2-4 weeks
COST: From $99 per SKU
*SKU = Stock Keeping Unit. SKU is a unique numerical identifying number that refers to a specific stock item in a retailer’s inventory or product catalog. So if you were selling a watch that came in black, brown and silver, that would be one product but a total of 3 SKU.
Lab Safety Testing
We are partnered with a government certified laboratory who can take care of any mandatory safety testing that may be needed if applicable (some foods and supplements, all cosmetics and kitchenware)
COST: by quotation
Creation & translation of product labels in line with Japanese legal standards. Submission to Japan Government for approval.
We can then provide you with the label in pdf format for labelling your end before dispatch or alternatively we can print and apply labels for you upon arrival in Japan.
TIMEFRAME: 1-3 weeks
Creation of Label: $149 per SKU – discounted for similar products
Printing & Application of label upon arrival in Japan (optional): $0.3 per label
Step 2: LAUNCH
Amazon Japan Account Setup
Set up a Professional Seller’s account on amazon.co.jp and create an Admin User for SUKIRI.
We recommend you do this yourself but can assist if need be.
TIMEFRAME: 5 minutes
Product Page Creation
Translation of individual product pages and optimise for SEO/Keywords. Addition of product images.
TIMEFRAME: 1-3 weeks
COST: $399 per product page – discounted for similar products
Amazon Japan Enhanced Brand (A+) Content
Translate and create your Brand Story, a general template for use on all your product pages, highlighting the attributes of your brand and products.
TIMEFRAME: 1-2 weeks
OPTIONAL but recommended
Shipment of Product
Clearance of shipment through Japanese Customs including all relevant paperwork.
COST: $290 per shipment*
* For shipments sent on a pallet, the Customs Clearance / Brokerage fee is $390 per shipment.
There is also an extra charge of $35 for pallet disposal. This is a standard “eco” charge in Japan warehouses.
Japan Consumption Tax & Import Tax
As of 1st January 2018, 8% Japan Consumption Tax will be due on all imports. This 8% is calculated on your shipping invoice total plus shipping fees.
Import Tax may also be due depending on your HS Code and Country’s Free Trade Agreement status with Japan.
DDP (Delivery Duty Paid)
We recommend sending your shipments DDP however we can arrange to pay taxes on your behalf at a cost of $30 per shipment.
Please note we are not a shipping company. We take care of all customs paperwork and clearance on your behalf but shipping must be arranged by yourselves DOOR to DOOR. We recommend UPS or DHL.
Step 3: Fully Managed Store (optional)
Customer Support & Store Management
COST: $99 per month + 10% of gross monthly sales.
Amazon Japan deposits income directly into your bank account every 2 weeks. We invoice you every 4 weeks.
Includes all of the following;
- Full Amazon Japan store management and Customer Support
- Reply to emails regarding orders, product questions, deal with any issues, returns, refunds, etc.
- Toll Free Telephone support: Monday to Friday 9am-5pm JST (Japan Standard Time)
- Up to 6 telephone staff will be trained to answer questions regarding your products and brand. Any unknowns will be referred back to you to assist in answering.
- Liability insurance cover for all products
- Continual updates on potential selling opportunities in Japan; festivals, national holidays, etc.
- Oversee product recalls.
- RECORD KEEPING: In line with Japanese law, we keep a record of all batch numbers, expiry dates, quantities, ingredients, manufacturing processes, needed in the event of spot inspections by the authorities.
- STOCK MANAGEMENT: Replenishment of stock. Full assistance, as and when needed.
The following would give you a fully stocked Amazon Japan store with 1 SKU:
|Initial First Shipment Setup Costs||Qty||Price||Subtotal|
|Import Application (per SKU)||1||$99||$99|
|Japanese Product Information Label Creation (per SKU)||1||$149||$149|
|Shipment Clearance through Japan Customs||1||$290||$290|
|Subsequent Shipment Costs||Qty||Price||Subtotal|
|Shipment Clearance through Japan Customs||1||$290||$290|
|Other Potential Costs|
|Payment of Taxes Fee (payment on your behalf of Japan Consumption Tax (8%) and any Import Tax due for shipments not sent DDP (Delivery Duty Paid): $30|
|Amazon Japan Product Page translation & setup: $399 per SKU (discounted for similar products)|
|Amazon Enhanced Brand A+ Content translation & setup: $699|
|Quality Control upon arrival in Japan: $0.5 per item|
|Japanese Product Information Label printing & application: $0.30 per label|
|Amazon FBA Label printing & application: $0.30 per label|
Product to Japan (P2J) Fees
Cost of shipping my product to Japan
This obviously varies depending on the quantity sent and whether by sea or air. Here is one scenario:
|Product to Japan Fees (P2J)||$0.20||based on 1 pallet of 5000 units costing $500 door to door|
|Japan Consumption Tax (8%)||$0.30||based on shipping invoice (wholesale) price of $20 per unit|
|Import Tax||$0||Thanks to JAEPA and other free trade agreements, this will either be greatly reduced or zero.|