The US netted Amazon $314 Billion in 2021 – that’s a net of around $950 for every US citizen and a truly staggering number. That means there are plenty of hungry customers and room for your business.
But how do you get started if you’re not currently a US citizen? Today, we’re going to guide you step-by-step on how to start selling on Amazon.com.
The Basics: What is Amazon FBA?
We’re going to assume you know what Amazon FBA is, but just in case you don’t, here’s the TL;DR: Fulfilment By Amazon (FBA) is where you ship your products to an Amazon warehouse (or many) and they package and distribute your products for you. That means the customer gets all the benefits of Amazon’s efficiency (and likely Amazon Prime) and you don’t have to do any of the packaging or shipping.
How to Start Selling on Amazon US with FBA
Step 1: Business Registration
Your first step is to get the legalities out of the way, and so that may, or may not, include registering a business in the US. You are not required to have a US business presence – as long as you have a valid business presence in your home country, you can continue to operate as that business on Amazon.com without needing to register a US business.
However, depending on the country you live in and the types of business structures you can choose from, you may find it easier to register an LLC in the US. Here are a few situations where it may make more sense to register an LLC in the US:
- You don’t yet have a business entity and plan to do the majority of business in the US
- If you’re a US citizen but are travelling or living in another country
- Your country doesn’t offer a business structure that is as beneficial as a US LLC
If you’re not sure what you should do or if you need to set up an LLC but aren’t sure how to go about it, we can help. We can help you incorporate a US LLC, get your EIN, bank account, and US Amazon Seller Account, so click here to learn more and get started.
Step 2: Set Up Your US Bank Account
Again, this step is optional. If you already have a business account in your home country, you may decide to continue using that to simplify things. However, you do need to be aware of exchange rates and how any fees will eat into your profits. It’s not the end of the world, but just something to think about.
Having a US business bank account is usually the best option as it will allow you to hold your dollars “in dollars”, rather than exchanging them back and forth as necessary and dealing with exchange rates. Holding a few different currencies can be beneficial for your business as if one takes a dive in value you can use the most cost-effective currency to purchase what you need. A Transferwise Borderless account or similar service will help you reduce exchange rate fees.
At the end of the day, it’s up to you, but it is generally more practical to get paid directly in dollars so you can work with it as you please.
Again, if you need help setting up a US business account, we can help.
Step 3: Set Up Your Amazon.com Seller Account
If you sell in any other Amazon marketplace, you may know that you only need one account for selling in certain territories. For example, you only need one account for selling in all European countries. That changes with Amazon.com – you need a new US Amazon seller account to sell in North America.
So, as a European account allows you to sell in the UK, Germany, France, and others, your North American account will allow you to sell in the US, Canada, and Mexico.
This means you are essentially starting from scratch: you need to go through the verification process and pay another monthly fee for your US account. The fees are nominal if you’re making thousands of dollars a month, but are something to take into consideration if you’re starting a new business.
One caveat to the above is if you already sell in the UK, you can use the same account information for your US account, and then all you need to do is provide your verification documents. If you already sell in the UK your account will likely be approved much faster than if you don’t, but don’t stress either way.
Step 4: Create Your Listings
Once you’ve got your account, you can start creating your listings – you need to do this before you send Amazon your stock.
If you have listings for your products that you sell in the UK, you can simply import them – though some people have found this feature to be temperamental. If it doesn’t work for you it’s not the end of the world, as any listing needs to be optimized for the US market.
Remember that anything that feels “off” will often place a sense of distrust or unease in a potential buyer and may cause them to go to a competitor, so it’s well worth making sure all your listings and descriptions make sense for the US market. Remember spelling differences, terminology differences, and measurement differences.
Step 5: Send Your Stock to Amazon US FBA
This step isn’t always as straightforward as you’d like it to be. If you’re a new seller, you may think that it’s as simple as getting your manufacturer (often in China) to ship your stock directly to an Amazon warehouse.
Unfortunately, they won’t let you do this. Amazon US won’t act as an importer, which is what they’d need to be if you were to do this. Instead, you need to find a third-party importer that will handle this for you. Yes, this is an added cost, but if you find the right partner, this step in the process can be headache-free. They’ll deal with the customs process and forward your stock to Amazon.
Most shipping companies offer this service, including all the big names (DHL, TNT, UPS, etc). You just need to reach out to them and get quotes for what you’ll need, and then choose your preferred company.
Import duty in the US is about 3% of the cost of the goods, though this can vary significantly depending on the goods. Your shipping company will typically invoice you for these charges.
Step 6: Get Your Taxes Straight
Of course, you can’t do business without taxes. If you live in the UK or another European country, the US has an agreement that eliminates double taxation and so you won’t have to pay income tax in the US.
If you have no US business presence you need to fill out your W-8 form (within your Amazon account) to tell them you don’t need to pay taxes in the US. You pay taxes for the business you do in the US in your home country.
If you don’t live in a country with one of these agreements, it may be best to speak to an expert to find out what the most cost-effective way to do business on Amazon.com is.
Selling on Amazon.com used to be very complicated when it came to sales taxes. In fact, it was so complicated that many foreign sellers just waited to see if they were legally responsible for collecting sales tax from buyers – something that just didn’t seem possible.
Fortunately, nowadays, things are simpler.
In most cases, you do not need to worry about sales tax. You don’t need to collect sales tax if you do not have “sales tax nexus”, which means you don’t have a significant connection in that state. Since you’re looking to start selling on Amazon.com with FBA, we can safely assume that this won’t apply to you. It does apply to you if:
- You have a location in that state
- You have an employee in that state
- You have a dropshipping partnership in that state
- You have affiliates in that state (don’t worry about Amazon affiliates here)
- You physically sell products there in person
- You store inventory there
The latter is the most important one for you, but fortunately, almost all Amazon fulfilment centers now have a Marketplace Facilitator Law which means Amazon will collect sales tax on your behalf. So, provided you only sell through Amazon, you shouldn’t have to file taxes here.
If you have a US business entity, such as an LLC, you will be responsible for paying taxes in the US. If you aren’t sure what you should be doing here, reach out to a tax professional – there are online services that can manage this for you.
Do I need to register a trademark in the US?
If you sell branded products, you need to open an Amazon.com Brand Registry account even if you already have one elsewhere.
You don’t need to register a trademark if you already have one in the UK, you just need to set up your Brand Registry account.
To set up this account, you need to supply:
- Product images
- Trademark information
If you already have a UK Brand Registry account, all you need to do is add your US seller account as an “additional user” to your current Brand Registry account.
What’s the easiest way to set up an Amazon US seller account?
If this all sounds like a lot of work, don’t panic. It can feel overwhelming or you may just not want to spend the time doing frustrating admin work. If that’s the case, we can streamline the entire process for you from forming a US LLC to setting up your Amazon US seller account. To find out more about our service, click here.