The Seller Abroad

Using FBA to sell on Amazon from abroad… can't be that hard!

Tag: questions

Questions – Part 2

Questions & Answers – Part 2

Welcome to the second post where I will share some questions and answers that have eventuated from the “Question?..Contact Me” form on this blog. There are some great questions that have come through and I believe the answers to these will be useful to the whole community. So let’s get into the Questions & Answers.Questions

Question 1

A question from the USA:

So I received a quote from the supplier in China, not realizing it was an FOB quote. With the customs fees and transportation costs how does one possibly turn a profit while doing this? Any advice or information would be greatly appreciated, it all seems next to impossible with the doubling of the COG’s just in transportation. Thanks for your blog, and all your information.

Answer 1:

I think this is something we can all relate to. I went through this exercise for a few products before I found one that would be profitable. I think it is important to realise that the freight portion of the cost is going to be much higher on your first ‘test’ batch of product due to the small ‘test’ quantity ordered. The freight ratio will get better on larger orders as freight per unit cost will reduce. That said, the key is to find a product where the numbers work. There are two general paths that seem to work. Number 1, you can try looking for a very small/light product to reduce transport cost; or number 2, look for a premium product that can be sold at over 3 times the cost of manufacture (FOB cost). A third option that I am yet to try myself is to source the product locally to avoid shipping and customs charges.  My first two lines of product fit into the number 2 and 1 category (in that order) and are turning a healthy profit.

I myself found this the biggest challenge in starting to sell a product. This is also why not every story is a success story. There is a fair element of risk. That said, nothing ventured nothing gained. I recommend taking the leap if you can afford the risk.

Question 2

This question is from the neighbour, Canada:

I read your cheat sheet for both shipping and tax id and have a question. When is it necessary to get an EIN? Would I be able to get away with not having one for shipping by courier such as UPS/FedEx? From what I’ve heard, they don’t really require EIN if shipment value is less than $2500, is this correct? Have you shipped smaller amount before using courier companies? What is the process with that? Do they basically take care of customs/duties and just charge you for that service?

Answer 2

To answer the question, you don’t need an EIN before importing product using UPS/FedEx. In my experience, the only time I required the EIN was when I had to collect sales tax for the items that were being sold on Amazon. My first shipment value was more than double the $2500 value and I did not require an EIN to get the product through customs.

I’d love to hear from anyone that might have had a different experience to mine. Please feel free to leave a comment with your thoughts.

Question 3:

Here is one from the UK:

I have a question regarding getting approval (un-gating) in certain categories in the US. I am based in the UK, and am looking to sell in the health and personal care category (although my product won’t actually be sold in that category, Amazon has told me I still need approval in this category). It seems Amazon will only accept invoices from wholesalers on their approved list and it turns out my China-based supplier is probably not on this list and so my applications keep getting disapproved. I was wondering if you’d come across anything similar.

For people based in the US it seems like all they have to do is buy a few random products from US based wholesalers and send in these invoices, and once they are un-gated, they can go on to sell anything in that category. But being based in the UK, I don’t think that will work as US wholesalers aren’t likely to send products to the UK, and UK documentation may not be valid for them.
Another difficulty of selling in the US from abroad!

Answer 3:

This is an interesting one. In my initial research into potential products I found that products in the health and personal care category were trending and ticked all the boxes in terms of being small, light and easy to ship as well as having the ability to sustain a healthy mark-up. That said, the complications highlighted in your question are the very reason I did not go down this path.

I’m afraid I cannot answer this question directly. The one idea that did come to mind is to have a US manufacturer package and send product to Amazon directly (not via the UK) in order to get approval. Once you have gotten approval, you can bring in product from abroad that meet all the required approval specifications.   

If anyone has experienced this issue and has a way of making it work please share your experience on the comments for this page. It would really help out a fellow seller abroad from the UK.

Questions – Part 1

Questions & Answers – Part 1

In this post, I will share some questions and answers that have eventuated from the “Question?..Contact Me” form on this blog. There are some great questions that have come through and I believe the answers to these will be useful to the whole community. So here goes the first of hopefully many Questions & Answers posts.  Questions

Question 1

This question is all the way from Macedonia:

I am not sure how I can import my goods in the USA without having a company there. My accountant told me that I need to have some entity (Company, etc.) in the USA that will be importer of the goods and I need to make invoice for the goods that will be paid by that entity. Are you doing something similar or you solved this issue on some other way?

Answer 1

You do not need to have a company in the USA to import. The Amazon recommended freight forwarders know how to set up the import details such that you can do it from abroad. I recommend having a look at the Shipping Cheat Sheet post for a detailed walk through on how to handling shipping from abroad.

Question 2

Another question from Macedonia:

Do I need to have EIN or ITIN number in the USA for tax collection in order to sell on Amazon?

Answer 2

Yes, you need an EIN for Sales tax collection when selling using FBA on Amazon. I recommend reading the Tax ID Cheat Sheet for a detailed walk through on how to obtain an EIN. 

Question 3

Third time lucky from Macedonia:

Do I need to create Invoice for each product bought by the end customer?

Answer 3

You do not need to create an invoice for each product bought. Amazon produces reports of the number of sales, amounts, discounts, etc. There are a number of reports you can get the Amazon system to generate for you to keep track of sales and cash flow.

Question 4

This one is from my local, Australia:

Is it worth it? Have read a few of your posts. Can one still make the $10,000 plus profit per month some sellers claim?

Answer 4

Good question! I’ve seen a lot of big claims out there as well. I guess it comes down to what you define as “worth it”. I can see hitting the $10,000 in revenue a month being realistic with about 3 or 4 products or 2 killer products. That said, $10,000 profit will probably require a much large business built over a couple of years with a good amount of invested capital. For me, this does not replace my primary income but serves as a good supplementary income stream that lets me live my lifestyle stress free. For example, 1 product with roughly $4,000 in revenue a month may generate $2,000 in profits a month, which is a nice little leg-up. The more products you add the better it gets. That said, you are obviously risking your investment with each new product. I am sure like any high risk investment, it pays of huge for some people (like in those claims you mentioned).

 

 

 

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