HOME & KITCHEN industry

Successfully Expanding from Europe to the US on Amazon

36%

YoY Revenue Increase (2022 v 2021)

23%

Year-end TACoS (Dec TACoS across all EU marketplaces: 12%)

70%

Above Profit Target

“Too bad we didn’t discover FordeBaker sooner! Thanks to their wide expertise we are having a steady growth of our Amazon sales. They are helping us scale and we can focus on other business projects in the meantime.”

Guido Zoboli – Co-Founder & CEO, Ausker

Ausker Cookware, renowned for its premium quality and innovative kitchen solutions, sought to expand its reach by entering the Amazon US marketplace. Building on its success across European markets, Ausker aimed to bring its Italian craftsmanship and dedication to enhancing everyday kitchen experiences to a broader audience.

Working closely with the managing director, we established three primary objectives for this expansion:

  • Achieving a sustainable 10% profit margin to ensure that sales revenue surpassed operational costs and allowed for business growth and reinvestment
  • Maintaining a 25% TACoS (Total Advertising Cost of Sale) to optimise the balance between advertising costs and sales revenue
  • Successfully launching and expanding into the Amazon US marketplace.

Ausker enlisted our expertise to spearhead their launch into the US market. Building on our success, we were already managing their European strategy across key marketplaces, including Italy, France, Germany, Spain, and the Netherlands, demonstrating our capability to expand into any new market, the US expansion encompassed strategic advertising, brand management, and content optimisation.

This comprehensive approach not only redefined their market presence but also facilitated a seamless transition from a strong European foundation to capturing American consumer demand.

The successful launch on Amazon US significantly boosted Ausker’s market penetration and sales, establishing it as a formidable player in the US cookware segment within months.

Challenges

The cookware segment on Amazon is highly competitive, with numerous brands offering products across various price points. Differentiating Ausker’s premium offerings in this saturated market was a major challenge, as many consumers often opt for cheaper alternatives.

Second, external economic factors, such as escalating shipping and freight costs, posed challenges to maintaining profitability within the European market. These rising costs necessitated strategic adjustments to preserve profit margins and ensure sustainable growth.

Third, legacy issues, including inconsistencies in variation setup across different Amazon EU marketplaces, hindered operational efficiency. Resolving these issues was essential to streamline product listings and enhance the overall customer experience.

Fourth, the Q4 seasonality presented both opportunities and challenges. As cookware items are popular gifts during the holiday season, heightened competition and increased consumer demand required effective strategies to capture market share and maximise sales revenue.

This meant, Ausker faced the complexity of mastering Amazon’s direct-to-consumer positioning, maintaining profitability amidst economic challenges, resolving legacy listing issues, and leveraging Q4 seasonality. These hurdles necessitated a partner with deep Amazon expertise to navigate the market and achieve their ambitious goals.

Solutions

To address Ausker’s challenges and achieve their ambitious objectives, we implemented a comprehensive, multi-faceted strategy:

First, we immersed ourselves in Ausker’s brand ethos, much of which we learnt when helping them with their European success and coupling this with the brand’s aspirations for the US market. This deep dive was crucial for aligning our strategies with their core values and market goals.

We began with country-specific strategies, tailoring advertising campaigns and product prioritisation to align with the unique demands of different European markets. This approach optimised sales performance and enhanced customer engagement by catering to local preferences.

Recognising the limitations of relying solely on the European market amid economic uncertainties, we expanded operations into the larger and potentially more lucrative US market. This diversification minimised dependency on any single market and opened new revenue streams.

Seasonal optimisation was another critical component. We implemented targeted content and advertising strategies to capitalise on consumer behaviour during Thanksgiving, Black Friday, and the holiday season. By positioning Ausker’s products as desirable gift options, we tapped into increased consumer spending during these peak periods.

A timely launch into the US market ahead of the holiday season was essential. This strategic timing leveraged heightened consumer demand, accelerating sales velocity during the crucial launch phase and establishing a strong market presence.

We conducted a granular analysis of advertising metrics at both SKU and country levels to inform budget allocation. By reallocating resources from underperforming campaigns and regions to higher ROI activities, particularly in the US market, we maximised advertising efficiency.

We tailored SEO and content initiatives to target the gifting audience, enhancing visibility and conversion opportunities during the peak shopping season. This included detailed keyword research and compelling listing copy and creative that highlighted Ausker’s unique selling points.

Our advertising strategy extended beyond Amazon, coordinating with Ausker’s off-Amazon teams and implementing well-judged use of video and display ads. This comprehensive approach educated potential customers before they reached the product pages, enhancing their readiness to purchase.

We initially focused on a few key SKUs, ensuring optimal performance and visibility. The continued success of these products opened opportunities for further diversification, adding new lines to the Ausker portfolio and driving significant growth.

Overall, our strategic initiatives not only facilitated a successful launch into the Amazon US marketplace but also positioned Ausker for sustainable long-term growth.

Results 

The strategic expansion into the US market proved highly successful for Ausker. US sales quickly surpassed those of key European markets, significantly boosting total sales revenue during the critical December period. Despite initial challenges, Ausker achieved a remarkable 17% net profit in December 2022, underscoring the effectiveness of their expansion efforts.

Our initial target was 25% TACoS but through meticulous analysis and reallocation of advertising budgets, we were able to achieve sales growth while TACoS was 13 percentage points below target.

Furthermore, the US expansion played a key part in a remarkable 36% year-over-year revenue increase from 2021 to 2022.

The expansion into the US market highlighted the importance of diversifying market presence to mitigate risks and capitalise on new growth opportunities. This strategic move was crucial for revenue generation and long-term sustainability.

Thorough planning, informed decision-making, and collaboration with experienced professionals were key to navigating the complex US market. Leveraging expertise and resources reduced risks and increased the likelihood of success.

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