Looking to expand your online business in 2016? Guest blogger James Thomson looks at the most important considerations when looking to sell on Amazon’s international marketplaces.
There are rich opportunities to capture new customers and generate revenue in Amazon’s ten international marketplaces, but new sellers should consider the following operational, legal, and financial issues before diving into global commerce.
As a US-based seller, you can decide if you want to sell your products and brands to buyers in Amazon’s international marketplaces. But whether or not you have the legal right to do so might be another story. For example, European Union regulations give brand owners in each country the authority to determine which resellers have permission to sell their products and which do not. Failure to comply with regulations and brand agreements could result in account suspension. Even if you are selling US-sourced products overseas, be certain you are legally authorized to sell those brands in your target Amazon markets. If you’re a private label seller of your own brand, then you’re in good shape!
Depending on the country, products sold on Amazon can be subject to additional local taxes such as those for the product’s country of origin, or where the product is stored or sold. Sellers looking to break into European markets should pay special attention to the Value Added Tax. In the EU, the VAT is applied to most customer purchases. For example, many US sellers overlook the fact that the VAT is already incorporated into prices on Amazon’s United Kingdom site. Profit margins take a hit as a result of the oversight. Bottom line: consult a tax attorney who specializes in tax regulations of the country in which you’re trying to sell.
Shipping and Reverse Logistics Support
If you’re sending your products overseas to a Fulfillment by Amazon (FBA) center or a foreign third-party logistics (3PL) provider, companies like Shapiro, DHL and UPS can help you manage product transportation. For sellers who plan to ship orders from the US as they’re placed, firms like Pitney Bowes can simplify the burdensome customs documentation and shipping preparation process. And since returns are a normal part of any Amazon seller’s business, having an in-country 3PL – like Wiseloads or ReBOUND – is critical to manage and recoup returned items.
Amazon requires sellers to provide customer support in a given marketplace’s local language. Tools like Google Translate work for individual words or short phrases, but they don’t render key linguistic nuances needed to market products accurately and disclose important transaction information. A poorly translated product listing could leave your non-English speaking customers confused or worse, misled. Companies like Interpro Translation Solutions and InterCultural Elements can help ensure your messaging and disclosures don’t get lost in translation.
Currency Exchange and Wiring
The lifeblood of any Amazon seller’s business is cash flow. However, when it’s time to collect payment from your customers, Amazon can charge between 3.5% and 3.75% to convert and wire the funds back to your US bank account. At World First, we can cut those exchange and transfer costs almost in half. We set up your own in-country bank account, which lets you recover many of the transaction fees. We partner with hundreds of US-based Amazon sellers who do business overseas to make sure they pocket the most profit possible.
Selling in Amazon’s international marketplaces can be challenging and expensive without planning and the right partners, so let World First be a part of your global success.
James Thomson is Partner of Buybox Experts, a consultancy supporting brands selling on Amazon and other marketplaces. He is also president of PROSPER Show, a continuing education conference focused on developing training and best-practice materials for online sellers. In previous roles, James was the former head of Amazon Services (that part of Amazon that recruits 100,000 new sellers to the Amazon marketplace each year), the first FBA account manager, a banker and management consultant. He earned an MBA from Vanderbilt University and Ph.D. in Marketing from the Kellogg School at Northwestern University. He is a regular contributor to Practical E-Commerce and Web Retailer.
*Disclosure: The author is an advisor to Skubana.
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