The truth is: selling on Amazon has NEVER been easier. Amazon makes it easy because they want to introduce more sellers to serve the needs of their gigantic customer base, and create a more competitive marketplace.
This may seem daunting, but it really is not, and I wanted to help dispel some of the myths that might prevent you from taking action and getting started.
Here are some common questions we receive about selling on Amazon using the wholesale business model.
1) What information do American-based suppliers, brand owners, and wholesale companies need to do business with me?
If you are a resident of the US or have a US corporation, they will need a resale certificate. The purpose of the resale certificate is to demonstrate that you are a business making a business to business purchase. This allows for the purchase to be made free of sales tax (because the final customer is the one who is to pay the sales tax).
If you are NOT a resident of the US or do NOT have a corporation, this may NOT apply. Instead, you can often use your country’s documentation that you are a real business. Of course, this means you must be incorporated as a business in some capacity in your home country.
2) What do I need to create an Amazon account in the US if I am not a US citizen?
To sign up for an Amazon account, you will need the following:
A) A credit card that can be charged internationally (typically Visa or Mastercard are perfect).
B) A local bank in your country that supports ACH (Automated Clearing House). This means your bank accepts electronic transfers.
If you choose to go this route, check out the Amazon Currency Converter for Sellers (ACCS):
Similarly, you can set up a US-based bank account and potentially save money on currency transfers. Two companies that make it very easy for foreigners to create US bank accounts are
C) Your local address.
D) A phone number (with your international prefix). As an alternative, we suggest setting up a US-based phone number through a service like Skype or Google Voice.
E) A US Employer Identification Number(EIN).
An employer identification number (EIN) is a unique number assigned to businesses in the U.S. in order to identify them. You don’t have to be a US corporation or of any legal status in relation to the US to get this number.
To obtain an EIN as a non-US resident, follow these steps
Step 1 – Call the IRS (Internal Revenue Service) at 267-941-1099 (not a toll-free number), 6:00 a.m. to 11:00 p.m. (Eastern US time), Monday through Friday, to obtain an EIN.
Step 2 – On the call, be prepared to provide the information to the best of your ability that is found on this form
https://www.irs.gov/pub/irs-pdf/fss4.pdf
3) What do I need to do to be in compliance with US taxes/laws?
Disclaimer: We are not a tax professional, and this is not professional tax advice
An American tax professional instructed us that you should not worry about getting compliant with US tax laws as an international seller until you doing at least $300,000 in sales per year. But you should do your own research on the subject.
When that time comes OR you would like more info on officially forming your business and establishing it officially in the US as to become compliant with US tax laws, then you must work with a US-based tax professional.
Here are a couple online based tax professional agencies
https://www.apriocloud.com/
https://www.salestaxandmore.com/
4) How will I store and ship my inventory?
Now that you are set up, the next challenge is actually storing and shipping your inventory.
We handle all of our shipping to customers through Amazon FBA, and HIGHLY suggest the same to everyone regardless of whether they are US-based or based internationally. At that point, your only challenge is getting your product from the supplier to the Amazon Fulfillment center.
Many suppliers will ship direct to Amazon, and this can be considered as an option. If the item has “prep required”, we generally suggest having this shipped to a US-based prep center to handle that, as Amazon’s prep fees are quite high.
Prep centers are also an option if your suppliers will not ship to Amazon directly. Prep centers receive your product, inspect it for damage, perform necessary prep to ensure its safety for Amazon, and then the journey to the customer.
Some recommendations are PrimeZeroPrep.com and PrepitPackitShipit.com
These companies have very detailed onboarding processes, and can get you set up with ease in minutes!
5) What happens if I get returns?
Now…
We are selling, and are hopefully doing really well. That being said, there is one last complication we have to tackle: returns.
Returns are certainly a part of business. In fact, they are generally between 1-2% of your sales. Many of those products can be resold, and Amazon can make that determination if you choose to let them do that (this is an account setting in your Amazon account).
Whether or not you choose to let Amazon sell your applicable return items, you will have some amount of returns that cannot be resold. There are a few options for what you can do with these.
You can:
A) Contact US-based charities to see if they may be interested in receiving your returns (we donate a good portion of our returns because it is easier and we can write off some amount of that on taxes). That may be more difficult for you, as you will be operating internationally, but some charitable organizations will receive shipments. I would talk to a CPA in your country to see how that can be handled with your personal taxes.
B) You can have Amazon destroy these. I believe Amazon charges $.10/per item to destroy these. However, this prevents you from paying storage fees, and would simply come as a loss against money you had made.
C) You can have the items shipped to a returns center and processed/sold. Here is one of those services (we have not personally used this service, but have heard good things from other people – please check it out and see if it is right for you):
6) Have you had international students be successful?
Absolutely! All kinds and from every corner of the world! Check out this podcast by one of them. His name is Chris Thomas and his podcast is called “The Australian Seller.”
Selling on Amazon from outside the United States has literally never been easier. There can be HUGE advantages to selling outside the country as well! The processes may appear daunting but most of the things in this article can be done in minutes. The rest, are just part of owning your own business and being an entrepreneur.
Please bear in mind that we are neither attorneys nor CPAs, and this should not be construed in any way as professional advice. We ALWAYS suggest that you verify and discuss any information with your own legal or tax professional.
Hopefully this helped put in perspective what you need to do to get started!
