22 Jul Selling on Amazon for Foreigners
Selling on Amazon for Foreigners
So your home country isn’t exactly ripe for ecommerce domination… but how great would it be to sell to the massive US market without ever going there?Turns out Grandpa Rick’s pipedream istoday’s reality, foreigners can sell on Amazon just as easy with a few key differences.
Taxes as a Foreign Company
As long as your business isn’t operatingfrom or registered within the US, you likely don’t have to pay US federal tax.Set up a business entity from your home country & you’ll pay federal income tax there instead.
Many countries have a tax treaty with the US. For Canadians, NAFTA is their treaty. Check to see if your country has a treaty here.
You’ll still be liable for sales tax but that’s an intensely complex issue best discussed with your accountant (ensure they’re schooled in it). Sales tax “nexus” is a hotly debated topic & every state has different rules… even individual counties. Once discussed with your accountant, you can use services likeTaxjar to deal with the headache of filing for you.
Setting up a North America Amazon Account
You’ll need an EIN (Employer Identification Number) for your business. As a foreign business, this acts as your tax ID since only Americans can get an SSN or ITIN. It’s also needed to import into the US, but if you’re hiring a freight forwarder it’s generally not needed.
It’s easily done over the phone with the IRS.
- Fill out this IRS form. You won’t submit it, just recite the info on the phone.
- Form instructions here
- Call the IRS at +1 267 941 1099 from6am – 11pm Eastern Standard Time, Mon – Fri
- Answer their simple questions & the agent will issue your business an EIN you can use immediately!
Once you’ve got your EIN you can set up a North American Amazon Seller account. They’ll ask for a credit card & a W-8 BEN form stating you’re a tax except foreign company. Amazon auto fills much of it for you so less paperwork, yay!
ImportingintoAmerica as a Foreign Business
You’ll want to import directly from China to the US to avoid crossing extra borders& paying double duties. If you want to check product quality, that should be done China side before you ship, not in your garage!
Some people ship directly to Amazon FBA warehouses, but this can be risky as shipping damaged products can make it to customers.
Many foreign sellers land their product at a prep & inspection warehouse in the US before sending to Amazon for some “boots on the ground.” This is one final place to catch any carton label errors or damage, as well as take advantage of Amazon’s discounted partnered shipping rates.
Create a shipping plan in Seller Central from the US based prep center to Amazon FBA. It’s usually cheaper than other freight forwarder’s US portion of the shipping.
Getting Paid – US bank account
While you don’t need a US bank account, it’ll save you big money in the long run. Amazon doesn’t give the best conversion rates. You’re likely buying inventory with USDso if you convert to your home currency then back to USD, you lose twice. Ideally you’re paying all business expenses in USD & only converting what you need to pay yourself.
Amazon only deposits US dollars into US based USD accounts & NOT foreign based USD accounts. Most US banks require you to be physically present to open an account with them… but not this one.
BMO Harris Bank allows foreign businesses to open a US based USD business bank account over the phone. You’ll need your business documents & an opening minimum deposit of $100. If you’ve done everything above you should have everything needed.
Call them at 1-888-340-2265 to apply & they’ll mail you documents to review & sign. Once they receive them + your initial deposit, they’ll mail your access card & open the account!
Cheap & Easy Currency Conversion
BMO Harris is great, but sending USD directly from their account to your home currency bank is expensive. Lucky the financial transactions industry is getting a shake up with cheap online conversion services! Depending on your home country, one of these services will send & convert money to your home bank account for a small fraction of a bank’s fee.
There a dozens of them out there & they all serve or exclude different countries so find one that works for you. I personally like Transferwise for ease of use & wide currency compatibility.
Is Foreign Amazon Seller Your Future Title?
Does that all seem like too much to overcome? Small price to pay for access to the insatiable US consumer market if you ask me 😉 There’s practically no advantage to selling in your home marketplace so you may as well sell where the money is… the US of A!
Wanna learn more about selling on Amazon? How to sell? What to sell? Learn through my other blog posts below.
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