How to sell on Amazon USA from UK

Remay Villaester (May)
29.06.20
6 minute read

Amazon is perhaps the world’s biggest online marketplace, with over 2 billion unique visitors every month. More than anything, it allows you to sell internationally with few hassles. With Amazon, you get access to a wide range of buyers.¹

Amazon U.S. has more customers than any other international Amazon site, making it very attractive to sellers internationally.

In this article, we’ll examine just how to sell on Amazon.com, the Amazon U.S. marketplace, from the U.K. We’ll also look at how TransferWise multi-currency account can help you save money on sales and international transfer.

Pros and Cons of Selling on Amazon U.S.?

Why should you sell on Amazon U.S.? Many people seem to believe that you need to be living in the U.S. to sell on the Amazon U.S. platform, but that is not true. In fact, out of Amazon’s 2.2 million global third-party sellers, 86% of them sell in the Amazon U.S marketplace, and 41% of them don’t even live in the U.S.²

Let’s examine some of the Pros and Cons of selling on Amazon U.S.

Pros

1. Amazon U.S. is by far the largest of Amazon marketplaces: Amazon U.S. has more than 112 million Prime members, and over 165 million products in its catalog. Also, more than 45% of U.S. sellers on Amazon have earned over $250,000 over their business’s lifetime. In fact, 75% of U.S. sellers earn more than $1,000 per month in revenue.

2. It is easier to sell in the U.S. than in the E.U.: The European Amazon Network is the only other marketplace that comes even remotely close to Amazon U.S. in size. However, the E.U. marketplace has a few more obstacles to selling than the Amazon U.S. marketplace.

For instance, sellers in the E.U. have to account for Value Added Tax (VAT) by themselves, while their U.K. counterparts only collect sales tax from shoppers. Also, products sold in the E.U. marketplace have to cater to multiple languages, but in the U.S. market, most sellers just list in English.

3. Amazon offers Fulfilment by Amazon (FBA): Fulfilment by Amazon is a program that allows sellers on Amazon to send their inventory for storage in Amazon’s warehouses. Once a sale is made on the store, Amazon employees pick the product, pack, and ship the goods to the buyers on behalf of the sellers. This is very convenient for international sellers because they only make one delivery run to the Amazon warehouse, rather than to each buyer individually.

4. Few obstacles to selling on Amazon U.S.: There are very few barriers to entry to selling on Amazon U.S.: 60% of sellers in Amazon U.S. had their business running in less than 3 months. More than that, 67% of U.S. sellers made profits on Amazon under a year

Cons

1. Exchange rates: Because money is changing hands internationally, there are usually fees and commissions associated with the conversion of currencies. This can significantly eat into your bottom line if left unchecked. Luckily, TransferWise helps solve this problem with their multi-currency account specifically designed for global business. But more on that later.

How to Sell on Amazon U.S.

To start selling on Amazon U.S, you need to have the following information:

● A valid credit card

● A bank account (if you don’t have a U.S bank account, you might use Amazon’s currency converter for sellers that allows you to sell on Amazon without a U.S bank account)

● Internationally chargeable phone card.

● Phone number

● Proof of residence and

● Tax information.

Once you have all this information handy, you need to create an Amazon seller account. To do this, go to sellercentral.amazon.com and click ‘Register now.’ Once on the page, you’ll register with your email. Select the “Create a new account” option and follow the steps to register.

In addition to the necessary information mentioned above, you must complete an online step-by-step interview to determine if you need to fill out a W9 (as a U.S. taxpayer), or a W-8BEN (non-U.S. taxpayer)

It may take up to 72 hours for Amazon to review and approve the application so that you can start selling. Other times, Amazon may need some additional information from you, so follow up with whatever Amazon needs as timely as possible.

Once it is approved, you can start listing items for sale on your Amazon store. There are three major types of models that you can use.

1. Private Label: The first model is the private label, which involves creating your own brand to manufacture your own products. While this model is more involved than others, it’s the most popular. 71% of all Amazon sellers use the private label model

2. Wholesale: This model involves purchasing bulk goods to resell them on Amazon. Unlike the private label, where a seller will create their own brand, the wholesaler sells products created by other companies.

3. Dropshipping: This business model involves marketing and selling products that were offered by another supplier or manufacturer. After the sale has been made, the drop shipper, which is you, then pays the supplier or manufacturer to ship the goods to the buyer on your behalf

While technically other business models exist, these three are the easiest to start with. You can sell on Amazon without ever seeing the product yourself.

When creating a listing, ensure that you have great product images, because this is the first thing that your customer sees. Also, ensure that your descriptions and titles are informative and SEO-friendly. Your title will let Amazon’s search engine know what your product is about so that it can place it in their catalog properly.

You will also need to select a customs broker that will help you get your products to the Amazon warehouse in the U.S. If you ship by air, custom brokers like UPS, DHL, and FedEx will cover that.

How to save money on sales

When you sell on Amazon U.S from the U.K., you can actually get paid in your U.K. bank account, as long as you have your IBAN and SWIFT code. However, this exposes you to the unfair exchange rates that banks and Amazon offer. In case you do not know, these payment platforms and banks always add a margin to exchange rates.

This means that the exchange rate that you see on Google or other online currency exchange platforms is not the same as what your money gets converted in. There is a significant margin added by the payment platforms/banks, sometimes up to 6%. This means that you pay 6% more than you actually should when converting your money.

To avoid this, use the TransferWise multi-currency account to receive payments. TransferWise allows you to do currency exchange at the mid-market price to save you some money on exchange rates and transfer fees. TransferWise charges a small, transparent fee that is shown upfront so that what you see is exactly what you get.

This is extremely convenient because you can receive payments from your customers in dollars, hold the money in your virtual bank account, and then transfer to your account in the U.K. only when you need to. And all that for a small, transparent fee and mid-market exchange rate.

You can also take advantage of the following features using TransferWise for business to make being self-employed easier:

  • Payroll to overseas contractors
  • Payments to vendors and suppliers in over 40 currencies
  • A unique integration with Xero for multi-currency accounting
  • Multi-currency debit card attached to the account
  • Automated batch payments through open API to save you time and streamline the process

Start saving today with TransferWise

Sources:

  1. Statista article
  2. JungleScout blog post

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

TransferWise is the smart, new way to send money abroad.

Find out more

Tips, news and updates for your location