One of the main reasons that make Amazon such a lucrative marketplace for many sellers, is the possibility to easily scale your business by expanding internationally without making massive changes to your organizational structure.
So why not take advantage of the concrete opportunity to expand your business in North America? You will have access to the largest economy in the world, with hundreds of millions of potential new customers. You can reach them using a unified account for the United States, Canada, and Mexico. Furthermore, you can freely choose whether to publish your offers on one, two, or all three available marketplaces.
In any case, before starting to sell on Amazon in the U.S. or other North American markets, it is good to put in place the first steps consciously and gradually. It’s important to understand if you can really sell in these target markets. Also, figure out if such an expansion is compatible with your current strategy.
In the next few lines we’ll summarize the steps you need to follow.
Selling in the United States: Logistics
If you want to sell on Amazon’s North American markets, the first thing to know is that there are numerous aspects that will impact your current business habits. The two most relevant ones are related to logistics and taxation.
Regarding logistics, for example, Amazon is happy to lend you a hand. Amazon can provide specific assistance in managing the international expansion of your business. It has third-party services that can support you in managing the major areas of your global business.
The first thing to decide is whether it is more convenient to rely on Amazon FBA or to manage logistics and shipments on your own by shipping directly to the end customer in the USA. Both solutions have pros and cons.
For example, shipping independently to the customer can allow you to offer many advantages in terms of customs duties. In fact, for many items, there is a value threshold below which there are no costs. On the other hand, shipping independently may result in a loss of visibility. Products that are not Prime and not Shipped by Amazon are less appealing. Also, managing returns logistics independently in a market like the United States can be a bit more complicated.
If you use Amazon FBA, on the other hand, you will still have to worry about managing the customs aspect. Shipping large quantities of products to Amazon warehouses incurs duties that vary greatly depending on the type of goods. Plus, using Amazon’s logistics comes with costs that should not be underestimated.
If you are shipping a typical local product not found in the USA, it may make sense to ship it directly from your country. There could be people willing to pay a significant surcharge for it simply because it is not available otherwise. This strategy could find its ideal target audience among your fellow countrymen residing abroad.
Of course, if the product is already sold by American retailers in the same market, you would no longer be competitive due to the high cost incurred by your shipments.
It is also worth noting that Amazon does not act as an importer. Therefore, if you’re going to use FBA, it will always be necessary to delegate this job to an intermediary like one of those companies that takes care of importing goods and then hands them over to Amazon.
Selling in the United States: Taxation
Our partner Avask can provide concrete support for the taxation area. It can help you with tax registration, periodic tax declarations, and so on. In fact, taxation is certainly the most complex issue for vendors selling in the United States. But why is that so?
From a fiscal point of view, the United States applies rules with a federal approach. Hence, there is no unique taxation. Each state is free to apply the sales taxes it prefers. In general, a different sales tax will be applied in each state where you make a sale, according to the rules of the destination market. Fortunately, most American states have a law requiring the marketplace to withhold and remit the Sales Tax. This means that for sales in North America, Amazon is required to calculate, collect, and remit sales taxes in the US states where this obligation exists. It does this automatically through a service called “Marketplace Facilitator.”
To check which states have the Marketplace Facilitator, you can consult this table:
https://www.amazon.com/gp/help/customer/display.html?nodeId=202211260
Registering for Amazon Sales in the USA
Once you have made all the necessary preparations, all you have to do is open a seller account in the United States. Naturally, you can link your existing data. Otherwise, you will need to open a new account on the marketplace. Remember that when registering, you will need to enter an internationally accepted credit card with a valid billing address for an eligible country.
Complete the account verification by providing all the necessary documents. Remember that Amazon needs to accurately and unequivocally qualify the actual owner by receiving:
- a valid identity document such as a passport or ID card;
- an additional document such as a business license and proof of address (such as a bank statement).
What to Sell in the United States with Amazon
After completing this step and before taking concrete actions in the North American market, try to get all the information on what products you can actually sell in the United States and other target markets. Some product categories may have additional or different restrictions than those in your country. In order to be sold in the USA, some products may require specific certifications. For example, a certificate issued by the Food & Drug Administration, or a Children’s Product Certificate (CPC).
There are also other aspects that sellers intending to place their products on Amazon in North America should be aware of.
For example, the competition on Amazon USA is even tougher than what you might experience in your domestic market. In such a vast marketplace, consumers are likely to find any type of product. Appearing at the top of search pages will be very difficult, especially because Amazon’s algorithm tends to reward sellers with a significant history. If we add the fact that mistakes could be made in optimizing product listings, then the risks of ending up outside the desired visibility are high.
What you don’t need to do to sell on Amazon in the USA
Even though selling in the USA seems too complicated, it is actually less so than it appears. However, it is always advisable to seek the advice of a partner who can accompany you in the smooth conduct of logistical and fiscal preparatory activities.
In any case, despite the complexity aspects, there are many more simplifications you can benefit from. In particular, remember that, in order to sell on Amazon in North America:
- you do not necessarily need to open a bank account in the destination market;
- there is no need to open a company in the United States (but in some cases, it might be convenient to open an LLC, Limited Liability Company;
- it is no longer necessary to have product liability insurance (but it is always possible to do so).
To learn more about our Tools dedicated to who sells on Amazon North America and to find out how our partners can help whoever intends to sell on the American market, contact us at the email support@zonwizard.com.
We will be happy to help you facilitate your expansion into this new market!
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