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Seller stories
Charge a premium!How did a Chinese factory make $3 million on Amazon in less than a year, and what gives it the confidence to break into the high end?
11/30/2024
About a 6-minute read
Reached $3 million in sales in less than a year after joining Amazon in 2024?How can a product priced $20 above the industry average still stay in the top 20 best sellers?What kind of seller can take off like this on Amazon?
For many Chinese people, “inverter” is still a relatively unfamiliar term. However, in Europe and the United States, as photovoltaic technology has become more widespread, many households have installed their own solar panels. In the process of converting solar energy into electricity, inverters play an important role by converting direct current into alternating current, allowing PCs and phones at home to use clean energy from the sun. So, inverters have already become a must-have for many households in Europe and the US.
In this energy revolution, many Chinese companies have also started moving into the new energy sector. Datou Hardware, which expanded overseas from the industrial belt in Zhengzhou, Henan, is one such example. Through independent technological innovation and brand building, the company has ridden this momentum in categories such as inverters and energy storage batteries and become a leader across multiple Amazon marketplaces.
Today, we’ve invited Mr. He and Mr. Xu from Datou Hardware to share why they decided to enter the new energy niche in 2023, and how they used Amazon Business to unlock incremental B2B and B2C opportunities in three simple steps, avoid low-price competition, and build a global brand!
For many Chinese people, “inverter” is still a relatively unfamiliar term. However, in Europe and the United States, as photovoltaic technology has become more widespread, many households have installed their own solar panels. In the process of converting solar energy into electricity, inverters play an important role by converting direct current into alternating current, allowing PCs and phones at home to use clean energy from the sun. So, inverters have already become a must-have for many households in Europe and the US.
In this energy revolution, many Chinese companies have also started moving into the new energy sector. Datou Hardware, which expanded overseas from the industrial belt in Zhengzhou, Henan, is one such example. Through independent technological innovation and brand building, the company has ridden this momentum in categories such as inverters and energy storage batteries and become a leader across multiple Amazon marketplaces.
Today, we’ve invited Mr. He and Mr. Xu from Datou Hardware to share why they decided to enter the new energy niche in 2023, and how they used Amazon Business to unlock incremental B2B and B2C opportunities in three simple steps, avoid low-price competition, and build a global brand!
Step 1: invest heavily in technology and bet on independent innovation as a traditional foreign trade company taps into a new cross-border track
In the new energy sector, Datou Hardware is a “young” company that was only established in 2023. Mr. He mentioned, “Our company has always been based in Henan, and we previously worked in the auto parts business. In 2020, as opportunities to expand overseas emerged, we began shifting into auto parts export business, and during those years our global business grew exponentially. But as more and more competitors entered the auto parts market, we also felt the pressure of price wars. ”
In 2022, while looking to transform, Daitou Hardware found through market research that the outdoor sports boom had fueled a surge in the energy storage market in Europe and the US. They decided to seize this opportunity and switch from auto parts to energy storage. In 2023, Dadou Hardware was officially established and launched on Amazon within the following year, focusing on the Europe marketplace to tap into clean energy opportunities amid the growing popularity of environmentally friendly ideas.
In 2022, while looking to transform, Daitou Hardware found through market research that the outdoor sports boom had fueled a surge in the energy storage market in Europe and the US. They decided to seize this opportunity and switch from auto parts to energy storage. In 2023, Dadou Hardware was officially established and launched on Amazon within the following year, focusing on the Europe marketplace to tap into clean energy opportunities amid the growing popularity of environmentally friendly ideas.
However, by then, the new energy sector had long passed its initial “boom period,” and there were already many strong overseas players. Dadou Hardware realized that to break away from the old approach of attracting traffic with low prices in global competition, it had to step up independent technological innovation and build its brand overseas. To this end, Dadou Hardware used the funds it had accumulated from traditional foreign trade to build its own R&D team and automated factory.
Dadou Hardware’s automated factory
Mr. He said, “To pursue independent innovation, we invested millions at the outset, and we believe that while doing business always involves risks, opportunities always coexist with those risks. Today, our R&D team has grown from just 2 people at the start to more than a dozen members. Along the way, they overcame all kinds of seemingly endless bugs and gradually built a leading product lineup, laying the foundation for our move into the high-end market. “
Mr. Xu said: ”From the start, we chose a more technically challenging path for inverter innovation, using R&D-driven innovation to command a premium. At present, we have not only achieved leading conversion efficiency, but have also launched our own intelligent management system to help users optimize management and improve their experience. In addition, we also offer modular portable energy storage products that can be flexibly combined based on customer needs, giving consumers a better user experience. “
Case study
From a one-way to a two-way channel, solving heat dissipation challenges
Customer needs are the starting point for our innovation. For example, many customers have told us that many inverters use one-way heat dissipation, making it hard for heat to dissipate during use, so the temperature keeps rising over time. To address this issue, we developed dual-channel technology and added a protection module to prevent overheating, ensuring safe and stable use for customers.
From a one-way to a two-way channel, solving heat dissipation challenges
Customer needs are the starting point for our innovation. For example, many customers have told us that many inverters use one-way heat dissipation, making it hard for heat to dissipate during use, so the temperature keeps rising over time. To address this issue, we developed dual-channel technology and added a protection module to prevent overheating, ensuring safe and stable use for customers.
Today, through a series of innovations in structure, heat dissipation, and other areas, Dadou Hardware has successfully been recognized as an innovative small and medium-sized enterprise in Henan Province and a “specialized and sophisticated” small and medium-sized enterprise in Zhengzhou. While advancing core technology R&D, Daitou Hardware has also been actively upgrading its smart manufacturing capabilities, leveraging the regional advantages, policy support, and abundant labor resources of Henan’s new energy industrial belt to build its own automated production line, boosting production efficiency by 40%. By combining its R&D, manufacturing, and operational capabilities, Daitou Hardware has become another successful example of an integrated industrial and trade brand going global. Currently, overseas revenue accounts for about 80% of Daitou Hardware’s total revenue, and more than half of that comes from Amazon. Beyond Europe marketplace, Daitou Hardware has also expanded into more marketplaces, including North America marketplace and Japan marketplace. In the Japan marketplace, Daitou Hardware’s sales growth rate has reached more than 200%.
Step 2: build your brand, improve your operations and promotion skills, and create brand premium through continuous learning
With proprietary core technology, how can you get overseas consumers to pay a premium for it?Daitou Hardware chose to rise to the challenge and build its own “global brand”!
Mr. He said, “At first, we weren’t familiar with how to build a brand, so we often discussed it together after work. Fortunately, Amazon had prepared a lot of official course resources, which were very valuable to novice sellers like us who had no idea where to start, and provided us with systematic guidance. “
Mr. He said, “At first, we weren’t familiar with how to build a brand, so we often discussed it together after work. Fortunately, Amazon had prepared a lot of official course resources, which were very valuable to novice sellers like us who had no idea where to start, and provided us with systematic guidance. “
After systematic learning, Big Head Hardware focused on customer experience and, with the help of various Amazon tools and support, continued to optimize and improve.
Mr. Xu said, “When expanding into Europe marketplace, logistics, compliance, and language may be the three biggest challenges many brand-focused sellers face.
In terms of compliance, we regularly communicate with certification bodies, and Amazon account managers also give us timely reminders.
In terms of logistics, we choose Fulfillment by Amazon (FBA) for all our deliveries. Amazon’s warehouses are closer to consumers, which improves delivery speed. We also use Pan-EU FBA to simplify logistics management in Europe, enabling us to send inventory to one country and sell across multiple European countries.
In terms of language, we use some of Amazon’s AI tools to simplify Listing creation and management, which greatly reduces the time costs of our operations. “
Mr. Xu said, “When expanding into Europe marketplace, logistics, compliance, and language may be the three biggest challenges many brand-focused sellers face.
In terms of compliance, we regularly communicate with certification bodies, and Amazon account managers also give us timely reminders.
In terms of logistics, we choose Fulfillment by Amazon (FBA) for all our deliveries. Amazon’s warehouses are closer to consumers, which improves delivery speed. We also use Pan-EU FBA to simplify logistics management in Europe, enabling us to send inventory to one country and sell across multiple European countries.
In terms of language, we use some of Amazon’s AI tools to simplify Listing creation and management, which greatly reduces the time costs of our operations. “
At the same time, Daitou Hardware has also developed its own multi-channel marketing mix, combining on- and off-Amazon marketing to drive traffic to its Brand Store, move customers from awareness to conversion, and accelerate simultaneous sales growth in both the B2C and B2B segments.
Mr. Xu said, “First, we use Amazon’s Product Opportunity Explorer and Amazon Brand Analytics (ABA) to look at overall market trends, as well as relevant categories and keywords, so we can identify the right product and brand positioning. Second, we use a mix of Sponsored Products, Sponsored Brands, Sponsored Display, and other ads to maximize exposure for our products and brand, use precise keywords and audience targeting to maximize traffic generation, and improve click-through and conversion rates. In addition, the Listing is a key step in driving sales conversions. We emphasize our innovations in design and functionality in the description and A+ page. For example, in the Japan marketplace, we prominently feature a “frequency adjustment switch” designed for the different frequencies used in eastern and western Japan. “
Mr. Xu said, “First, we use Amazon’s Product Opportunity Explorer and Amazon Brand Analytics (ABA) to look at overall market trends, as well as relevant categories and keywords, so we can identify the right product and brand positioning. Second, we use a mix of Sponsored Products, Sponsored Brands, Sponsored Display, and other ads to maximize exposure for our products and brand, use precise keywords and audience targeting to maximize traffic generation, and improve click-through and conversion rates. In addition, the Listing is a key step in driving sales conversions. We emphasize our innovations in design and functionality in the description and A+ page. For example, in the Japan marketplace, we prominently feature a “frequency adjustment switch” designed for the different frequencies used in eastern and western Japan. “
Independent innovation and a self-owned brand have given Datou Hardware the confidence to position itself at the high end. Mr. He explained that Datou Hardware’s prices are generally higher than the industry average, and some products are even priced far above the industry average, yet their sales still rank among the top in the category. “For example, we have an inverter product in Europe. The industry average price is around 150, while ours is between 170 and 180. ”
Step 3: Expand channels with Amazon Business smart tools to drive B2B sales to 20% of total sales
When Datou Hardware first started selling on Amazon, it mainly targeted consumers, but after expanding into Amazon Business, companies and organizations from industries such as construction, outdoor sports, and emergency services gradually became brand customers. Today, about 20% of Datou Hardware’s sales come from B2B customers.
Mr. Xu said, “For us, the B2B segment has a high-quality customer base and can deliver higher-quality business growth.
No.1 First, compared with price, B2B customers care more about product quality and service and are less price-sensitive. Our previous data showed that the average order value for B2B customers is about 10% higher than that of B2C customers.
No.2 Second, B2B customers have stronger brand loyalty and a higher repurchase rate than B2C customers. Generally, the repurchase rate for B2B customers is around 30%, while for B2C customers it is between 10% and 12%.
No.3 Third, while the repurchase rate is higher, the return rate for B2B customers is lower than that of B2C customers. According to our data, the return rate on our consumer side is around 5%, while on the business side it is only 0.58%.
No. 4 Fourth, business customers purchase in larger quantities and reorder more often, making it easier to build a stable customer base. For example, one of our customers in the construction industry needed to purchase a batch of durable inverters for a job site, so we provided them with a customized product. After many repurchases, the customer purchased a total of about 100 units, with a total value of 50,000 US dollars. “
Mr. Xu said, “For us, the B2B segment has a high-quality customer base and can deliver higher-quality business growth.
No.1 First, compared with price, B2B customers care more about product quality and service and are less price-sensitive. Our previous data showed that the average order value for B2B customers is about 10% higher than that of B2C customers.
No.2 Second, B2B customers have stronger brand loyalty and a higher repurchase rate than B2C customers. Generally, the repurchase rate for B2B customers is around 30%, while for B2C customers it is between 10% and 12%.
No.3 Third, while the repurchase rate is higher, the return rate for B2B customers is lower than that of B2C customers. According to our data, the return rate on our consumer side is around 5%, while on the business side it is only 0.58%.
No. 4 Fourth, business customers purchase in larger quantities and reorder more often, making it easier to build a stable customer base. For example, one of our customers in the construction industry needed to purchase a batch of durable inverters for a job site, so we provided them with a customized product. After many repurchases, the customer purchased a total of about 100 units, with a total value of 50,000 US dollars. “
Now, to attract high-quality business customers, Daitou Hardware has made targeted adjustments and optimizations to the power and structure of its consumer products and launched a series of industry solutions to better meet the needs of business buyers. At the same time, Amazon Business provides sellers with end-to-end tools spanning traffic, conversion, purchasing, and logistics fulfillment, helping them uncover greater business opportunities with business buyers.
01 Stage 1: drive traffic and increase visibility
At the traffic-generation stage, Sponsored Display ads for businesses (B2B SD Ads) gave Dadou Hardware the opportunity to reach business buyers in specific industry segments. At the same time, business-exclusive back-to-work and back-to-school seasonal campaigns allowed Dadou Hardware to reach more business buyers at a low cost and boost brand awareness without spending on ads.
Mr. Xu said, “First, Sponsored Display ads for businesses can precisely reach segmented target audiences across different industries and help us build a high-quality customer base. For our Sponsored Display campaigns, to attract business users, we designed professional, premium visual creatives for specific products, highlighting product advantages and use cases and emphasizing key parameters to ensure that business buyers can quickly understand the products’ strengths. The “audience targeting” feature in Sponsored Display lets us precisely target business buyers in sectors such as “new energy,” “engineering and construction,” and “energy management.” It also lets us target business audiences with clear needs, such as “industrial energy storage equipment” and “backup power solutions,” by targeting specific keywords. In addition, by “remarketing” to users who have previously browsed our product pages, we can repeatedly reach them as businesses make purchasing decisions and increase conversions. After running Sponsored Display ads for business buyers for one week, not only did our click-through rate (CTR) meet expectations, but our conversion rate was also about 20% higher than in previous campaigns. Through this advertising campaign, sales of this energy storage battery increased significantly in the target region, overall sales revenue grew by 30%, and many buyers chose to purchase multiple units. Second, Business back-to-school season promotions provide B2B sellers with a low-cost opportunity to drive traffic and conversions. For example, in the Japan marketplace, our final sales during this year’s back-to-school season performed very well, showing 2–3x growth compared with normal periods. During major sales events, we also recommend offering more attractive BPQD discounts to effectively increase sales. “
At the traffic-generation stage, Sponsored Display ads for businesses (B2B SD Ads) gave Dadou Hardware the opportunity to reach business buyers in specific industry segments. At the same time, business-exclusive back-to-work and back-to-school seasonal campaigns allowed Dadou Hardware to reach more business buyers at a low cost and boost brand awareness without spending on ads.
Mr. Xu said, “First, Sponsored Display ads for businesses can precisely reach segmented target audiences across different industries and help us build a high-quality customer base. For our Sponsored Display campaigns, to attract business users, we designed professional, premium visual creatives for specific products, highlighting product advantages and use cases and emphasizing key parameters to ensure that business buyers can quickly understand the products’ strengths. The “audience targeting” feature in Sponsored Display lets us precisely target business buyers in sectors such as “new energy,” “engineering and construction,” and “energy management.” It also lets us target business audiences with clear needs, such as “industrial energy storage equipment” and “backup power solutions,” by targeting specific keywords. In addition, by “remarketing” to users who have previously browsed our product pages, we can repeatedly reach them as businesses make purchasing decisions and increase conversions. After running Sponsored Display ads for business buyers for one week, not only did our click-through rate (CTR) meet expectations, but our conversion rate was also about 20% higher than in previous campaigns. Through this advertising campaign, sales of this energy storage battery increased significantly in the target region, overall sales revenue grew by 30%, and many buyers chose to purchase multiple units. Second, Business back-to-school season promotions provide B2B sellers with a low-cost opportunity to drive traffic and conversions. For example, in the Japan marketplace, our final sales during this year’s back-to-school season performed very well, showing 2–3x growth compared with normal periods. During major sales events, we also recommend offering more attractive BPQD discounts to effectively increase sales. “
Scenario-based creative assets for Datou Hardware
02 Stage 2: Sales conversion
At the conversion stage, Package Hierarchy, the Custom Quote Engine (CQE), and business pricing and quantity discounts (BPQD) gave Datou Hardware powerful tools to speed up business buyers’ purchase decisions and accelerate the conversion from “traffic” to “sales.”
Mr. Xu said, “BPQD is one of our key tools for attracting business buyers. Based on market research and competitors’ pricing strategies, we set up three pricing tiers—small (fewer than 10 units), medium (10–50 units), and large volume (more than 50 units)—with a maximum discount of 8%–10% to ensure steady daily orders.” In addition, we also adjust our discount strategy in a timely manner based on market demand and current inventory levels to maximize sales. We found that setting business pricing rules and Quantity Discounts (BPQD) effectively helped us get more orders from business customers. At the same time, we also used Amazon Bulk Services, uploaded Case-packed product selections, and provided Package Hierarchy for specific suitable products, attracting a large number of business buyers by displaying exclusive business discount labels on the product detail page. Once the setup was complete, we saw business traffic for specific products increase by more than 2x, business clicks increase by 149%, and business orders increase by 186%. Finally, we also landed a series of large orders through the Custom Quote Engine (CQE). For example, some of our products are customized specifically for Spanish-speaking customers. One Spanish-speaking customer found us through Custom Quote Engine, purchased 40 sets the first time, and has since regularly purchased more than 100 sets every month. “
At the conversion stage, Package Hierarchy, the Custom Quote Engine (CQE), and business pricing and quantity discounts (BPQD) gave Datou Hardware powerful tools to speed up business buyers’ purchase decisions and accelerate the conversion from “traffic” to “sales.”
Mr. Xu said, “BPQD is one of our key tools for attracting business buyers. Based on market research and competitors’ pricing strategies, we set up three pricing tiers—small (fewer than 10 units), medium (10–50 units), and large volume (more than 50 units)—with a maximum discount of 8%–10% to ensure steady daily orders.” In addition, we also adjust our discount strategy in a timely manner based on market demand and current inventory levels to maximize sales. We found that setting business pricing rules and Quantity Discounts (BPQD) effectively helped us get more orders from business customers. At the same time, we also used Amazon Bulk Services, uploaded Case-packed product selections, and provided Package Hierarchy for specific suitable products, attracting a large number of business buyers by displaying exclusive business discount labels on the product detail page. Once the setup was complete, we saw business traffic for specific products increase by more than 2x, business clicks increase by 149%, and business orders increase by 186%. Finally, we also landed a series of large orders through the Custom Quote Engine (CQE). For example, some of our products are customized specifically for Spanish-speaking customers. One Spanish-speaking customer found us through Custom Quote Engine, purchased 40 sets the first time, and has since regularly purchased more than 100 sets every month. “
03 Phase 3: simplify purchasing
At the purchasing stage, Amazon Business can provide invoicing services such as Invoicing by Amazon (IBA) and Value Added Tax Calculation Service (VCS) to simplify seller operations and improve business efficiency.
Mr. Xu said, “The VCS tool can automatically calculate VAT and issue compliant invoices, which has greatly reduced our tax burden. Previously, we needed to manually calculate and manage VAT for each order, which was time-consuming and laborious; after using VCS, the Amazon system automatically completed the calculation, which ensured tax accuracy and reduced the risk of human error. “
At the purchasing stage, Amazon Business can provide invoicing services such as Invoicing by Amazon (IBA) and Value Added Tax Calculation Service (VCS) to simplify seller operations and improve business efficiency.
Mr. Xu said, “The VCS tool can automatically calculate VAT and issue compliant invoices, which has greatly reduced our tax burden. Previously, we needed to manually calculate and manage VAT for each order, which was time-consuming and laborious; after using VCS, the Amazon system automatically completed the calculation, which ensured tax accuracy and reduced the risk of human error. “
04 Stage 4: logistics and delivery
During the transaction and delivery stages, Amazon provides more reliable protection for the entire transaction process, and FBA enables Big Head Hardware to manage B2B and B2C deliveries in a unified way, greatly reducing the risks of cross-border transactions while simplifying logistics and delivery.
Mr. Xu said, “After using FBA, we found that the fulfillment process for Amazon Business orders became more efficient and that the logistics and operating costs associated with international delivery were significantly reduced. At the same time, Amazon’s professional support and after-sales service have simplified our cross-border operations, enabling us to expand our business into broader global markets. We had previously encountered cases where customers claimed they had not received their orders after delivery, ultimately resulting in both financial loss and lost goods. After using Amazon Business, we did see lower transaction risk, especially because managing new customers became more convenient and secure. With Amazon’s verification and escrow services, we can more effectively address common risks in traditional foreign trade, focus on improving product quality and the service experience, and expand our business in the global market with greater confidence. “
During the transaction and delivery stages, Amazon provides more reliable protection for the entire transaction process, and FBA enables Big Head Hardware to manage B2B and B2C deliveries in a unified way, greatly reducing the risks of cross-border transactions while simplifying logistics and delivery.
Mr. Xu said, “After using FBA, we found that the fulfillment process for Amazon Business orders became more efficient and that the logistics and operating costs associated with international delivery were significantly reduced. At the same time, Amazon’s professional support and after-sales service have simplified our cross-border operations, enabling us to expand our business into broader global markets. We had previously encountered cases where customers claimed they had not received their orders after delivery, ultimately resulting in both financial loss and lost goods. After using Amazon Business, we did see lower transaction risk, especially because managing new customers became more convenient and secure. With Amazon’s verification and escrow services, we can more effectively address common risks in traditional foreign trade, focus on improving product quality and the service experience, and expand our business in the global market with greater confidence. “
Through years of operations, Daitou Hardware has built extensive experience in B2B product selection. In the future, Daitou Hardware will continue to develop more new energy products for overseas businesses and institutions, seize the opportunities created by the global energy revolution, and expand into a growing blue-ocean market.
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