Company for Amazon FBA

[Tigris]

Hi guys,

I am looking at trying Amazon FBA out. I am aware you need to have a company to do this. I used to do drop shipping from China but it was getting frustrating and embarrassing as customers had to wait 2 - 3 weeks for there order.

Does anyone know any guides worth following so I don't miss anything out? I am aware you can google search but there is a lot of rubbish out there as well.

I may invest in quickbooks online to record all purchases/sales as well as register a new company. I know a lot of people go for a Ltd company but is it worth doing this when starting out?

Thanks in advance

 

[Mr D]

Sorry, why do you need a company to do this? Have amazon insisted?

Limited company versus sole trader is a discussion in its own right. Cost versus benefits versus limitations.

You can set up a limited company cheaply, you will have ongoing accountants cost (considerable) and annual submission cost (its a small annual charge). May be worth talking to an accountant before deciding which accounting package to use. You don't have to decide that on day one but it is worth getting it sorted out in first month or two just so you can get up to date with paperwork.

 

[Tigris]

Sorry, why do you need a company to do this? Have amazon insisted?

Limited company versus sole trader is a discussion in its own right. Cost versus benefits versus limitations.

You can set up a limited company cheaply, you will have ongoing accountants cost (considerable) and annual submission cost (its a small annual charge). May be worth talking to an accountant before deciding which accounting package to use. You don't have to decide that on day one but it is worth getting it sorted out in first month or two just so you can get up to date with paperwork.

Thanks for the reply.

I have been told by many to start as a sole trader until the company grows.

The reason I say about a company is I tried to register as a seller on Amazon and it wanted a
UTR Number.


Thanks again.

 

[Mr D]

Thanks for the reply.

I have been told by many to start as a sole trader until the company grows.

The reason I say about a company is I tried to register as a seller on Amazon and it wanted a
UTR Number.


Thanks again.

Yes sole traders have an UTR. Identifies you as opposed to someone else with the same name and date of birth.
You get UTR from HMRC when you register as self employed.

Companies don't have them, instead using company number to identify themselves.

You will likely have fun later when you try to go limited from sole trader on amazon.
Used to be up to a year to change over with often trade blocked in the meantime. They may have speeded the process up (or slowed it down) since.
Was easier a few years back to shut down the sole trader business and open new amazon account in company name with permission from seller performance. A lot quicker resolution.

 

[Tigris]

Yes sole traders have an UTR. Identifies you as opposed to someone else with the same name and date of birth.
You get UTR from HMRC when you register as self employed.

Companies don't have them, instead using company number to identify themselves.

You will likely have fun later when you try to go limited from sole trader on amazon.
Used to be up to a year to change over with often trade blocked in the meantime. They may have speeded the process up (or slowed it down) since.
Was easier a few years back to shut down the sole trader business and open new amazon account in company name with permission from seller performance. A lot quicker resolution.

Could definitely do with speaking to an accountant. Will find it quite hard finding the money to pay an accountant regularly when starting out on this venture if I were to start with a Ltd company.

 

[Mr D]

Could definitely do with speaking to an accountant. Will find it quite hard finding the money to pay an accountant regularly when starting out on this venture if I were to start with a Ltd company.

Should be able to meet with an accountant for half hour or so for free without signing up to them.
Can pay monthly or annually - plans for both appear to be common in places I have looked.

Not helped by Amazon rules meaning any sales you will get the money around 4 weeks later. Some a little sooner maybe some quite a bit later.
The joy of Amazon.

Oh and when using FBA get your stock sent in for Christmas by early September. They can start experiencing delivery delays at the centres as they get closer to Christmas.

 

[Andy777]

Hi guys,

I am looking at trying Amazon FBA out. I am aware you need to have a company to do this.

Amazon does not require you to have a company to sell on the platform. You can do it as a Sole Trader too. You have to weight out pros and cons for going the Sole Trader vs Ltd. route - mainly from the tax perspective but as well as liability. Especially as you will be entering CPG industry.

Another important thing to think about is - how fast you're planning to grow? If your business plan is set out in a way that you will require an Ltd. company in 6 months or 12 months time, better go with the Ltd. company from day one.

Reason being is that when you create an Ltd. company, you will have to change/upgrade your Amazon account and it's NOT an easy and quick process to do. In some cases, it can take months going back and forth with Amazon support, providing all kinds of documents etc. to change the account's status.

So, just keep this in mind when deciding on which business form to start with.

 

[Tigris]

Thank you.

I will have to speak with an accountant I think. Seems a whole lot of work running a Ltd company whilst working a 9- 5 full time job as well.

I am new to the whole white label/Amazon FBA program as well so I could do with testing the water first really before going all in.

Thanks for replying again

 

[Mr D]

Thank you.

I will have to speak with an accountant I think. Seems a whole lot of work running a Ltd company whilst working a 9- 5 full time job as well.

I am new to the whole white label/Amazon FBA program as well so I could do with testing the water first really before going all in.

Thanks for replying again

Going white label too?
Brave.

Minor hint, don't send all your stock to amazon - they will charge you long term storage fees for stock that's been there a while - very expensive long term storage - so keep just a couple of months supply or so in stock at amazon at any time.
More than once have come across people with over a couple of thousand of a white label item (so low on amazon search) stored at amazon that had to be recalled at 60p per item - in 8 months he'd sold a few dozen, 2400 had been sent in.

 

[Tigris]

Going white label too?
Brave.

Minor hint, don't send all your stock to amazon - they will charge you long term storage fees for stock that's been there a while - very expensive long term storage - so keep just a couple of months supply or so in stock at amazon at any time.
More than once have come across people with over a couple of thousand of a white label item (so low on amazon search) stored at amazon that had to be recalled at 60p per item - in 8 months he'd sold a few dozen, 2400 had been sent in.

Originally I wanted to resell other brands but it seems a lot are going down the white label route as Amazon can be strict on which brands you can sell. Being new to Amazon I would prefer to resell rather than the white label route to be honest.

Finding it quite hard to find wholesale stock at reasonable prices but Ile carry on the search

 

[Mr D]

Originally I wanted to resell other brands but it seems a lot are going down the white label route as Amazon can be strict on which brands you can sell. Being new to Amazon I would prefer to resell rather than the white label route to be honest.

Finding it quite hard to find wholesale stock at reasonable prices but Ile carry on the search

Trade fair in just over a month at the NEC in Birmingham. Has a few stalls there - Spring Fair its called.
Easy enough to find stock to sell, for you or anyone else. Including your biggest competitor, amazon.

 

[Andy777]

Finding it quite hard to find wholesale stock at reasonable prices but Ile carry on the search

It's because that model is almost dead by now. You will struggle A LOT and end up bashing Amazon on seller forums on how bad they're.

IF you want to build a real, long-term business and use Amazon as a platform to launch it, you have to create your own brand, sell your own branded products which you can in future sell from your own shop too, offer in wholesale etc.

Re-selling other brands on Amazon won't get you far.

 

[Mr D]

It's because that model is almost dead by now. You will struggle A LOT and end up bashing Amazon on seller forums on how bad they're.

IF you want to build a real, long-term business and use Amazon as a platform to launch it, you have to create your own brand, sell your own branded products which you can in future sell from your own shop too, offer in wholesale etc.

Re-selling other brands on Amazon won't get you far.

Merely a useful model that still makes money.

Thing about other brands is that there is a market for them and people do buy them. Creating your own brand is done by plenty of people, starting from an unknown brand in a new product page and low on search results.
Some do it successfully. Others successfully re-sell other brands.

 

[Ben F]

Hi guys,

I am looking at trying Amazon FBA out. I am aware you need to have a company to do this. I used to do drop shipping from China but it was getting frustrating and embarrassing as customers had to wait 2 - 3 weeks for there order.

Does anyone know any guides worth following so I don't miss anything out? I am aware you can google search but there is a lot of rubbish out there as well.

I may invest in quickbooks online to record all purchases/sales as well as register a new company. I know a lot of people go for a Ltd company but is it worth doing this when starting out?

Thanks in advance

Hello, I know the way How to Ship Your Product from China to Amazon FBA

Top 2 options for shipping from China to Amazon FBA
While deciding on how to get your products from China to Amazon FBA, there are two options

• Ship directly to Amazon FBA warehouses from China
• Ship to a middleman or yourself, and then ship it to FBA warehouses

I prefer Shipping directly from China to Amazon FBA. If shipping directly from China to Amazon FBA warehouses, the supplier must prep the products as per FBA specifications. This way, a lot depends on the Chinese supplier’s end. The product could either make it up to FBA specifications or not. Errors at this stage may cost you serious issues. While dealing with Chinese manufacturers, communication and language is a common issue.

Communication gap is one of the most crucial points that one should watch out for. Though lately, a lot of Chinese suppliers are now familiar with the FBA specifications, you’ll still want to ensure that you have briefed them the right procedure and the must-haves. The other way, if you’re shipping via US or UK, you have the opportunity to inspect your products and ensure that they are quality verified and are up to the FBA specifications.

 

[stefano_adversaria]

Hello good morning,

we are an accounting and consulting firm in Sofia (Bulgaria) and we work with companies doing Amazon FBA.

If you want an advice, keep records with a proper accountant, because it seems easy but when you start to do some numbers it's not.
So if you are really thinking about doing this, it's really worth to invest some money in it.

GoodLuck

 

[Tigris]

Thanks guys.

Been working on the Amazon FBA program recently (hours of research). I am currently waiting on the UTR tax code so I can sign up as an Amazon seller.

Also done a lot of a product research (still not enough, lol) and I am looking at private labeling.

@Ben F People have mentioned freight forwarders. I was only going to order 100-150 items to start with but its all about finding the balance. Enough stock to keep going but not too much that I don't sell it all and get charged silly storage fees.