Best legal structure to sell goods online in USA?

[rukleit]

Hi I'm running a company based in UK - we sell a health supplement product via the internet.
Right now we ship via our central UK warehouse to USA customers. However shipping costs are high (from UK to USA).
We would like to either import the product into the USA or even manufacture in the USA, so we can send from a warehouse in the USA. We then would also invest into advertising and hit the USA market properly. We will need paypal, online credit cards etc.

How to do this best in terms of corporation?

I first looked into doing this entirely offshore (e.g. BVI) but too much hassle in terms of merchant account, no paypal, warehouses and suppliers in USA don't like to cooperate, etc.

I have heard for Nevada, Wyoming or Delaware.

Does anybody have a concrete suggestion and/or share his thoughts with me on how to achieve this best?

 

[Directimport]

The most popular place is Delaware due to their low cost , but it won't make any difference to your sales tax liabilities. Sales tax is payable in some states and not in others. It depends on where your customers are located.

If you plan on selling via your own eCommerce site you could use one of the many fulfillment services available. If selling on Amazon, then it would most likely make sense to use Amazon's FBA service. People from many different countries do that.

There are big opportunities to sell in the USA on a white label or private label basis, because there is a big trend there for small online marketers to sell private labelled supplement products.

I would be happy to give you more information if you need it.

 

[rukleit]

Directimport, thanks for great advice.

Actually do I really have to incorporate an USA entity to hit the USA market? I mean can't my UK Ltd. just contract a warehouse in USA for fulfillement and then I import large quantities of the product from UK into USA?
Or will it be messy/complicated in terms of sales tax etc.?

 

[Directimport]

Unfortunately you will need a legal USA entity and a US bank account. That's not all that hard to achieve but it can be rather complicated without some help.

I have not done it myself because I don't sell online, but there are people who can do it for you. I would avoid the commercial business set up professionals because of the cost and also they don't have any knowledge of internet marketing.

Maybe if you intend using Amazon FBA you could seek the guidance of someone who teaches the ins and outs of using that service.

 

[fulfillmenteurope]

TO have a US bank account is not a problem, you can register with payoneer and you will get for free a credit card linked with a US bank account where you can receive payments from amazon and others US companies. I have several customers selling on the amazon US, receiving payments by payoneer without problems.

Regards,

 

[rukleit]

Thanks for very helpful replies.
So it looks I have to incorporate in the USA. I will most likely go with Delaware because it is quite accepted/evolved. Hope I won't end up in too much hassle dealing with this new jurisdiction.

 

[Mister B]

In order to import and retail directly to the US, from a US location, you will need a US company.

However, there are serious restrictions on foreigners forming companies in the US and before you go any further, I would seek expert legal advice. Furthermore, when importing bulk goods into the US you will need to have an annual surety bond in place, an importer of record number and a federal tax id. (The last of which you cannot get unless you are either a US national or a US company.)

In the short term, I would advocate using the FBA programme. They're very efficient and more importantly, as long as you use Shapiro, (their appointed forwarder,) allow you to use their tax id so allowing bulk importation.

HTH

Mister B

 

[Directimport]

There are business in the USA that like Shapiro's Customs service will also allow you to use their tax ID and will receive your shipments but will also prepare them for Amazon. You may find it better to send your bulk goods to such a facilitator who can repack, sort and label to suit Amazon FBA.

One problem with shipping direct to Amazon is that you won't know until quite late in the piece which of their fulfillment centres will be their chosen destination for your shipment. This can possibly interfere with your agreement with your shipper.

By the way member fulfillmenteurop was quite right when he suggested Payoneer as a means of receiving payment from Amazon. It could save you a lot of trouble.

 

[RealEcon]

Ive known a couple foreigners that told me they just went to the US, for 2 weeks opened a Wells Fargo bank account (apparently the easiest for foreigners), then went and signedup for a PObox forwarding company, so they had an address and could receive all their mail. Then they setup an LLC in whatever state they were in. Or somehow did it through Delaware, which is one of the cheapest states.

As long as you have a US bank account, LLC, and Tax number, I think you are good to go.

Importing goods into the US, shouldnt be much problem either. My sister imports goods from China through her LLC and says theres nothing too it.

 

[Chris Ashdown]

Insurance and litigation would be my main concerns they both may well exceed the higher cost of postage to the states