Learn 11 tips to help you sell your products on Amazon
Many people are interested in e-commerce in general, and some are thinking of starting a business through the experience of selling through the Amazon platform.
Those who have an online store and products in the Arab world wish to display these products on the Amazon website, to benefit from the large segment present on this platform, and to access broader electronic markets.
There are a lot of questions on everyone's minds about the best ways to gain market share and selling on Amazon has started through safe selling mechanisms, especially concerning tax laws, international shipping, and dealing with Amazon fulfillment services.
Here I will give you 11 facts that I collected by answering many of the frequently asked questions by those interested in e-commerce on Amazon.
1- If I subscribe to the Fulfillment By Amazon service, will I be allowed to sell in my own store in addition to selling on Amazon, and use Amazon stores to ship my products when selling through my own store?
Answer: The Amazon fulfillment service is limited to the product and sales service that is implemented on the Amazon platform only, that is, it secures the logistical aspect of inventory and dispatch to the customer after the sale is completed on the Amazon site and does not take the place of drop shipping companies, and all the operations of managing the product and marketing page are It and its follow-up on the Amazon platform is the responsibility of the seller who owns the products.
The first step that comes before sending products to Amazon stores is to create and verify an Amazon account as a seller.
2- Is the Amazon fulfillment service activated when subscribing to the professional account, or can it be used within the individual account?
Answer: You must first see the 3 conditions for dealing with the Amazon platform (as a seller), as for managing products through the Fulfillment by Amazon service, this can be exploited, whether within the account of the individual seller or the professional, but I do not think that it will be a step It is smart and I do not recommend it to individual account holders (sellers), the merchant should start selling products and sending them himself until he fully understands the method of dealing with Amazon, and then moves to deal with the Amazon fulfillment service, for the following reasons:
A- There is a fee for each product sold on Amazon using individual accounts of 0.99, and Amazon sales fees will be added to it (it varies depending on the type of product and in any section or category), add to it the Amazon fulfillment service fees, and do not forget in the last that the individual account will not benefit Of the shipping privileges for this service or privileges he may obtain from shipping companies if the seller deals with them directly, and thus the seller is exposed to a loss unless the profit rate is high.
B- Many products are restricted to dealing and selling on Amazon, and in some cases, they may be prohibited. If they are sent to Amazon stores and the seller knows that they are restricted or prohibited products (or their sale is prohibited in a specific state of America), then the seller bears the costs of returning Sending them to him and incurring additional expenses and losses that he did not expect.
3- Should the seller on Amazon (single account or professional account) have a company registered in America?
Answer: Yes, the seller must have a registered company (I did not mention this in article 3 Terms of Dealing and Selling on the Amazon platform), and the company’s registration here is to comply with the transactions and tax laws used in America that Amazon applies in compliance with tax laws (local for each state or the general federal ).
The law requires Amazon to report the sales of each seller to the US tax authority when the number of annual sales of the seller exceeds 50 sales.
Some methods must be followed to obtain the tax number, the most important and first of which is to register a company in America, of course, this is what concerns sellers inside America.
4- How is the tax applied to merchants (a merchant inside America or a merchant from outside America) on Amazon?
Answer: Part of the answer in the previous question (No. 3), which is related to the seller from inside America, as for the seller from outside America:
A - If the products are sold on Amazon but shipped from outside America, within the countries allowed to deal with this mechanism in Amazon, (there are 5 Arab countries on that list are, Algeria, Egypt, Morocco, Jordan, and the Sultanate of Oman), they do not have to tax Income and no sales tax in America,
B- The seller from outside America must complete the tax requirements in Amazon, including filling out a form or a form called (W9-BEN Form), and this means exemption from the tax return requirements in the United States, and therefore the seller from these countries will not be subject to income tax or sales tax,
c- The foreign seller remains responsible for taxes in his country of residence,
Note that if the seller is registered from outside America but ships his products from stores inside America, the actual commitment and payment of sales tax are according to American law, but he is exempted from income tax only.
5- I want to register a company inside the United States of America, in order to deal with the Amazon platform, how is that?
Answer: Some states allow the registration of companies for people outside America, and one of the most famous of these states is “Delaware”, and there are some accountants who do this for an establishment fee, and then an annual fee (you go to the registration agent in the state according to the law of that state, and fees Others for the accountant to follow up on this registration or to monitor the securities and submit them to the tax authority), the company establishment fees may reach between $500 to $1000, and the annual fees for the registration agent range between $150 to $200, and the accountant’s fees vary according to the services he will provide,
Note that you will have to file an annual tax return, and pay taxes for your business operations in America.
6- How are taxes calculated on Amazon?
Answer: The local tax laws of each state are applied concerning the percentage of sales tax in that state, and then the income tax is applied at the end of the year to the company that has the tax number (the income tax will be local and federal, after calculating all expenses, losses and the number of profits at the time), Recently, Amazon added five states to the list of US states in which Amazon is committed to implementing tax laws, so that it becomes 45 states, and 5 states remain outside the list and application.
Sales tax is applied only to the product sold and according to the law of the state to which the product will be shipped and sent, (the types of products that are subject to sales tax vary), and this tax is for each individual product in the shopping cart and not on the total value of the shopping cart, and some states apply tax On the value of shipping or accompanying services (such as special gift packaging), but it is a few mandates.
The amount of sales tax calculated depends on many factors, including the identity of the seller or in which state the seller is located, the type or body of the product sold (which varies by product and state law), the buyer’s location or the final address to send the products to (this is the main factor in calculating sales tax) , and these values may change when viewing the products in the shopping cart and between the completion of the final payment process, that is, the tax rate seen in the shopping cart is an estimate and may differ from the final percentage actually paid upon completing the entire purchase process (in the aggregate and often it does not differ significantly if not different Finally, because Amazon is working on checking the calculation within the system automatically and quickly), and the most important thing here is that the seller will not enter into these calculation problems, because he will know exactly how much is the value of the sales tax that was collected on his behalf in the order details and through the management page of the seller’s account.
Some paid services calculate sales tax for each product sold and according to each state and city and for each customer, automatically and quickly, and even submit the declaration to each state and pay the amounts owed to it. TaxJar is an example of these services.
7- When buying from Amazon, taxes appear in addition to the price when buying so that the buyer pays them - does Amazon take sales tax from the seller or does it take it from the buyer, and does it pay the tax to the government as long as it is the one who withheld the tax?
Answer: The seller is responsible for paying the tax to the state, not Amazon. Amazon delivers the full amount to the seller with the tax (after the buyer pays the total at the end of the sale), but Amazon at the end of the fiscal year informs the tax authority of sales for each seller, as I mentioned in the previous answer
Sales taxes are paid to the state of the buyer's residence, there are income taxes and cumulative taxes paid to the state of the seller's residence, and there are federal taxes, (the accountants are asked for details of all this).
8- What if some products were shipped from China directly to Amazon warehouses to be sold there later?
Answer: Each product or merchandise has different rates of customs duties or taxes, and the conditions for accepting the product’s entry into the US market. Mostly, Amazon does not accept direct shipments from the Chinese market to its warehouses, and therefore a customs clearance agent will be used to deal with customs to clear the shipment and then someone else to be transferred to Amazon stores.
9- What is the customs exemption limit for goods in the United States of America?
Answer: There is no such thing as a “customs exemption limit” in America, and there is no such thing as a complete exemption, but there are trade exchange agreements between countries, from which the customs tax on some products is reduced or canceled according to what is mentioned in these agreements, and mostly these Customs rates vary according to the product and are not large compared to customs in the Arab world, for example, Jordan exempts its products from US customs,
If I exceed the customs exemption limit, do I need a commercial register and a registered company to receive goods through it?
Answer: There must be a registered company in whose name products are imported in commercial quantities from China, and there are other conditions for importing in commercial quantities.
How is the customs tariff calculated on goods imported into the United States?
Answer: Each product has a different percentage, and each product has an identification number in customs, according to which the type of product and in which section is determined and thus the percentage of customs is determined or if it is exempt, and we do not forget the source of the product (the country of manufacture or export), and for example to clarify the idea, cotton clothes It differs from polyester or woolen clothes, and the proportions of cotton in the clothes affect the value of the customs percentage as well, and the type of clothes as well (for example pants, flannels, or jackets), according to which the customs percentage varies, and so on.
Therefore, customs clearance agents intervene to facilitate these operations and calculations in which a person gets lost in their great ramifications.
10- Are there suppliers in China who have the ability to bring goods from China to the United States and deliver them to Amazon warehouses, regardless of their quantity, without the need for a register or something else?
The answer: Yes, there are such services (as I have heard, and God knows), but I do not trust them, and the reputation of the Chinese in direct trade exchange should be wary of them when dealing with them (direct dealing), let alone such treatment, I do not advise that,
11- Is there international shipping from Amazon?
Answer: International shipping is limited to certain countries only and not to all countries, and it varies according to the seller and its services. Does the seller allow international shipping or not, and these are 5 conditions for international shipping on Amazon:
1- The seller must subscribe to the FBA Export service, which is different from the traditional Amazon fulfillment,
2- This service is only available to sellers from pre-determined countries (not including any Arab country) who are allowed to make their products available for international shipping,
3- Amazon ships specific products to certain countries only and within a service called Amazon Global Export, and there are a group of Arab countries to which products are sent,
4- International shipping is only allowed for specific products and categories,
5- Shipping is carried out using regular international mail (i.e. companies such as FedEx or DHL are not used),
6- Amazon confirms that it is not responsible for customs duties in the buyer's country for the product.
In the end, I hope that I succeeded in answering the questions and that things became clearer,
For those who are greatly interested in displaying their products on the Amazon platform, please share with us this quick survey for a study on the possibilities of selling on Amazon from outside the United States of America, and ways to facilitate ways to deal with them, and share that with you, click here to access the survey
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