As an e-commerce entrepreneur, you can choose to sell your products on Amazon. Because the marketplace is evermore invested in expanding their worldwide reach, selling through Amazon is definitely something to consider.
You can opt for multiple methods if you want to sell on Amazon. But, in all cases you need to have an Amazon account. After you successfully created your account you have two options. You can choose to either store and transport the products yourself, or you can let Amazon do it for you. The name that is given to this latter service is Fulfilment by Amazon, or FBA in short.
This article will tell you more about Amazon FBA, how to register, and all the costs that come with it. But first, let’s see how to make an Amazon account and become a seller on Amazon.
How do you become a seller on Amazon?
You need to arrange a couple of things before you can start selling on Amazon. This mostly revolves around creating an Amazon account. The steps that you need to go through to create an account are listed below.
- You have to indicate that you want to be a seller on this website.
- Secondly, you create an account by picking your personal login details.
- Fill in all the details of your business.
- Fill in all your personal details. Note that Amazon recognizes phone numbers that have already been used in an Amazon environment, including private accounts and e.g. Amazon Prime Video.
- Fill in your credit card details in order to pay Amazon. We will come back to the costs surrounding Amazon FBA in a later instance.
- Afterwards you add the name of your (Amazon) store. This can differ from the name of your company. Indeed, this is the name specifically for your Amazon page.
- Make sure that your account is safe: enable a two-step verification. You can do so by adding a phone number or with the Authenticator app.
After you went through all the steps you can personalize your ‘Amazon Seller Central’. This is the page where you can keep track of everything surrounding your products and your Amazon store: from your stock to your sales to the communication with your buyers.
What is Amazon FBA?
Amazon FBA is the logistical system that allows sellers to have a smooth experience when selling (internationally). If you opt for Amazon FBA, you don’t have to worry about the storage and transport of your products. Also, the customer service of everything surrounding your products is taken care of. Making use of Amazon FBA is convenient for any e-commerce seller. It allows you to spend time on your actual business rather than managing the packaging and transport of your products.
The moment you create your Amazon account you can opt for Fulfilment by Amazon. As indicated, Amazon FBA allows you to store your products in one of the Amazon fulfilment centers. In Europe, these are located in Germany, Spain, Poland, Sweden, Czech Republic, Italy, and the United Kingdom. Besides that, Amazon has fulfilment centers in Canada, Mexico and the USA.
Anyone can join Amazon FBA. By setting up your Amazon account with FBA, you can enjoy a great amount of benefits. The most important benefits are:
- you will be more visible on Amazon;
- your chances for the Buy Box increase;
- you can make use of the Amazon Prime shipment service;
- your general chance of selling your products increases.
How do you opt for Amazon FBA?
Plenty of benefits. However, you will first need to set up your account appropriately. Setting up Amazon FBA has to be done in the ‘Seller Central’, as mentioned earlier. You have access to this personalized page as long as you can log in to your Amazon account. In your personal environment you can then indicate for which products you want to make use of Amazon FBA.
When you’re in your ‘Seller Central’, you go to the ‘Manage stock’ tab. From here you can select the listings of your product and change them to Fulfilled by Amazon. At this point you are able to pick the country where you want to send your stock. Afterwards, you need to prepare the shipment and indicate how you will deliver the products to the Amazon centers.
Sending your products to the fulfilment centers has to abide to strict guidelines. Especially regarding packaging and labeling, this can be a big task. If you don’t handle everything surrounding your products correctly it is possible that Amazon declines your products. Therefore, it is important to have elaborate knowledge on the packaging guidelines of Amazon. Read more on that here.
VAT and tax obligations for Amazon FBA
Amazon has many different locations, but not all these locations are part of Amazon FBA. Because of this, your products are possibly stored in another country than the one your business is located in. If you sell in the European Union, this comes with different VAT obligations. You have to be fully VAT compliant to sell with Amazon FBA. Making sure you have the right registrations is therefore crucial.
So for example, if you are located in Austria you will potentially stock your products in the fulfilment center in Germany. In this case, you will need a local German VAT number. It is also possible that you make use of different Amazon fulfilment centers. If so, you might want to opt for a Pan European VAT number. Registering for all the different VAT numbers can be time consuming. Therefore, more and more e-commerce entrepreneurs choose to automate the process.
How much does Amazon charge to sell?
Fulfilment by Amazon comes at a price, unfortunately. The exact amount is decided by several factors. For example, if your products are easy to transport you will have to pay less. How much Amazon charges to sell through Amazon FBA is decided by the following price indicators:
- Standard selling fees: these are the general fees that Amazon adds to every sale on the platform. It varies between 10% and 15% of your gross turnover.
- Monthly costs Amazon FBA: to use Amazon FBA, you will have to pay the monthly subscription. This costs €39,95 euros per month.
- Amazon FBA fees: based on the standard FBA storage and fulfilment costs. It depends on your type of product, its measurements, its weight and the total amount of products to be stored.
- Costs for stock: besides your monthly FBA storage costs, other fees can be added. This is, for example, costs for long-term storage or costs to remove your unsold products.
The total costs for Amazon FBA are, thus, very variable. For example, you will pay a higher price if you store your products for longer than a year in one of the fulfilment centers.
How to achieve full VAT compliance?
As an e-commerce seller you can spend quite some time setting up Amazon FBA. However, before you can actually set up Amazon FBA, you have to be sure that you are in line with all the VAT obligations. Every country has different rules. You might need a combination of local registrations and One Stop Shop registrations to achieve a full VAT compliance. If you don’t manage your tax obligations well, you will not be allowed to sell with Amazon FBA.
Staxxer is more than happy to help you with your tax obligations. The experts of Staxxer are located in all the countries where you potentially need a VAT number. They are acquainted with the local tax infrastructure and can assist you in your own language. That way, you can make use of Amazon FBA without thinking twice.
Curious what Staxxer can do for you? Discover our options or come and say hi to us!