When it comes to selling on Amazon from another country, things can get complicated. Do you need a FEIN? A W-9? Should you register as an individual seller or register for FBA?
These are just a few questions you need answering. In this post, we’ll go through the process of how you can start selling on Amazon USA as a non-US Citizen.
A Brief Overview Of FBA
First off, here’s a quick explanation of Fulfillment by Amazon (FBA) when compared to self-shipping.
When you ship products yourself, you’re responsible for the whole shipping process. Shipping times will depend on you. Whereas if you’re using FBA, you’ll ship your inventory to an Amazon warehouse.
From there, they’ll ship items out to your customers. This has plenty of advantages, most notably shorter shipping times.
For example, FBA makes your product eligible for the Amazon Prime 2-day shipping. A feature that can help make your products far more attractive.
As for the types of Amazon seller accounts, these are individual and professional. The individual plan is more affordable, but more limited too. With that in mind, let’s continue.
Amazon FBA or Self-Shipping?
Tax is the main problem when selling from outside the US. US tax can be complicated and difficult to understand – especially if you’ve never run a company before.
The good news is, you don’t need a tax ID at first. You’ll only need one once you reach Amazon’s tax threshold.
Once you do, Amazon will likely send you a W-9 form or a 1099-K form to fill out. Don’t ignore this form – your seller information ends up with the IRS. And you could get in serious trouble if you do nothing.
When it comes to Amazon FBA, things get more complicated. But it could well be worth it for the shorter shipping time, which is a proven sales accelerator.
For FBA, you’ll need to form a company in the US, since operating as a sole proprietor in this regard is for US citizens only. You’ll also need to fill out and submit W-9 and W-8BEN forms, as well as get a FEIN (Federal employer identification number) from the IRS.
If you choose this step, make sure that your registered business name, name on the bank account and the name on your FEIN are all the same as your Legal Entity name on Amazon. Else you could run into extra difficulties and, let’s face it, this process is complicated enough as is.
Do I Need a Professional Plan to Use FBA?
No! You can use an individual account too. But then you’ll have limited reporting options when compared to the professional plan. And you’ll also miss out on the buy box – a feature that can help get you a few extra sales.
In the end, it’s up to you. But the professional plan is well worth the money – especially if sales are starting to roll in.
Do I Need a Professional to do my Taxes?
You can do your own taxes with accounting software like Quickbooks. But it is advised to get, at the very least, an audit from a professional that’s familiar with US tax laws and accounting practices. Especially if you’re unfamiliar with US tax law.
The last thing you want at the end of a tax period is a nasty hit to your profits that could leave you making a loss.
The Difference Between Importing And Exporting
As an individual seller NOT making use of FBA, you’ll be the exporter. Whoever is buying from you will be the importer, and liable for the US taxes that result from this transaction.
But if you’re making use of FBA, you become the importer. So then you’re liable for the import taxes and you’ll need the FEIN and W-9.
You’re Ready To Get Selling
You now have a pretty solid overview of the process of selling on Amazon as a non-US citizen. If you follow all the regulations set out in this post, you’ll be just fine.
But keep in mind, Amazon support is there for you, too. If you’re ever unsure about anything, get in touch with them. They’re there to help.
And finally, if there’s anything in this post that confuses you, please feel free to drop a comment. If you’re already selling to the US from outside and have a few additional tips, we’d also love to hear from you.