Nicola Phillips Malaney, FBA Manager at Shapiro, on getting the most from Fulfillment By Amazon (FBA) and the relationship of business.
Running an international business is difficult, but e-commerce giants like Amazon, Alibaba, and eBay have made it easier by taking on the commercial duties of warehousing, customer service, and providing a concentrated digital marketplace. But what about all those other things first-time business owners have to be aware of: accounting, money transfer, logistics, marketing…? The list goes on. And in all the internet (especially FBA) noise, how do you find the right partner for these functions that are so essential to your business?
Let’s use logistics as an example. You’ve planned your target markets, chosen your merchandise wisely, and all that is left is getting your product to the assigned Amazon warehouse. How hard could that be? There are thousands of companies that offer this service and all of them are telling you it’s easy and send you an invoice, but what are you actually paying for? Most vendors don’t take the time to explain the process of importing even though you, the importer, bear the final responsibility. As if selling on Amazon isn’t enough hard work, now you’ve got to somehow master logistics as well?
When you make the leap to shipping overseas, destination matters. For example, in Europe, each member of the EU sets a different rate for the Value Added Tax (VAT). In the UK, the VAT rate is 20% but in Hungary it’s 27%. An oversight on this research can mean a huge difference in your cash flow when you consider that VAT must be paid at the time of import. Taking the time to properly research can do wonders for your bottom line. For example, if you’re planning to test the market in Europe, try to utilize Onward Supply Relief (OSR). OSR applies when you import your goods into one EU member state and then immediately export it to another EU member state.
Or, perhaps you’ve been shipping to Amazon in the U.S. for quite some time now and you can build a 48 x 40” pallet-load in your sleep. Imagine your surprise when you learn that Amazon in France requires smaller pallets (roughly 48 x 32”)! You’d certainly want to make sure your forwarder can help you restructure your load planning before it gets rejected at the Amazon Fulfillment Center… or you’ll find yourself desperately googling the French word for pallet while your customers are disappointed that your goods are out of stock!
If you want to grow your business internationally, you need to take the time to understand how things work elsewhere and establish partnerships with vendors that educate you on the nuances of foreign markets. Don’t assume that all Amazon regulations are created equal. Learn to think of business partners as a true extension of your business and find vendors seeking to help you scale. Your partners should be leaders in their industry – just like us.
All views and advice provided in this article are opinions of the author and not those of World First.