Selling on Amazon.com from UK

[AlexSandra]

Hi and Happy Easter,

I have a private label product which I currently sell on amazon.uk only. I am still below the VAT threshold and I am not going to reach it in the near future.

I want to expand and start selling on amazon.com. I know that I have to register a separate account but I could not find info if I should be VAT registered.

Can you please advise on this?

If I have to be VAT registered, should I register a separate company to sell in the USA, to avoid paying VAT for my UK sales ( as I am below the threshold here).

My last question is if I can get the US amazon payments directly into my UK bank account and if there are any fees for this?

I would appreciate any advise.

Regards,
Alex

 

[Scalloway]

f I have to be VAT registered, should I register a separate company to sell in the USA, to avoid paying VAT for my UK sales ( as I am below the threshold here).

Sales outwith the EU are zero rated. You can reclaim the VAT on the goods you sell so it is to your advantage to register.

 

[Mr D]

Make sure your product is able to be sold in the US. Some of the states have rather odd notions (to us) regarding dangerous items, dangerous substances.

US payments - you'd be paying the amazon conversion rate to GBP or your bank's conversion rate to GBP?

Can be worth looking at separate company over there and may be worth looking at local fulfilment. While you won't deal with VAT, enjoy state taxes on sales if you end up with stock anywhere.

 

[AlexSandra]

Scalloway, Thank you for the reply. So, this means that I must be VAT registered after all, but it would be beneficial to me. Is this correct?

Mr D, thank you for the advise. Luckily, my product is a pretty safe one. The only risk is of paper cut
What do you mean by local fulfillment? I was thinking of FBA.

 

[Mr D]

Scalloway, Thank you for the reply. So, this means that I must be VAT registered after all, but it would be beneficial to me. Is this correct?

Mr D, thank you for the advise. Luckily, my product is a pretty safe one. The only risk is of paper cut
What do you mean by local fulfillment? I was thinking of FBA.

By local fulfilment I mean storing stock in the US rather than sending each individual order from UK.
FBA means amazon stick your stock all over the place. You may be sending to a couple of centres, they can spread it around many more.

Look into sales tax and amazon's nexuses. Whether you will end up doing the admin a couple of dozen times or not I don't know but you need to know and factor it in.

Or you could do what some do and use a different fulfilment company and use one state - that gives one nexus and one states taxes at best.

Different solutions suit different companies. FBA is quick and seamless regarding orders but has high long term (6 months plus) fees plus an increase in storage fees in run up to Christmas. Can be more expensive than UK that way.

 

[Scalloway]

this means that I must be VAT registered after all, but it would be beneficial to me. Is this correct?

Yes.

 

[AlexSandra]

Thank you Mr D. I will have to do a more thorough research before jumping in it.
I was anyway thinking of sending the stock in US warehouses, as otherwise the delivery will be too slow.

Best,
Alex

 

[Mr D]

Thank you Mr D. I will have to do a more thorough research before jumping in it.
I was anyway thinking of sending the stock in US warehouses, as otherwise the delivery will be too slow.

Best,
Alex

Yes, amazon buyers do require speed of delivery.

 

[AW Swindon]

Hi Alex. To follow on from Mr D. Its worth considering getting a US fulfilment centre to store and ship your products. You could still sell on the Amazon Market place, but have it fulfilled independently. A lot of people immediately think to go FBA but it depends on what your need. We have lots of experience of both fulfilment options so happy to help with the pros and cons.

 

[kulture]

I would recommend having a long talk with an accountant. Whilst it could be beneficial to be registered for VAT for your US sales, you could have difficulty in persuading HMRC that your two companies are separate enough for one to be registered and the other not. You may find yourself with a large retrospective VAT bill if you are not very careful.

Likewise I would hesitate about using US located fulfilment. You would need to be very careful regarding which state to store the stock and be fully aware of US sales tax implications.

To be honest, with the current political climate in the US I would hesitate to start selling in the US as you may end up having to pay sales tax to every state and even county where you DELIVER the goods. This would be difficult to administer.

 

[AlexSandra]

Thank you everyone for the advice. I have decided not to jump into the USA market until I am ready. At the moment, I am too small to get things so complicated. I will first concentrate on increasing sales in the local UK market and promoting the product more efficiently. My second step will be going to the EU market.

 

[Ecowritingtablet]

i believe amazon.com will have bigger market potential for you. So many sellers from different countries are selling to amazon.com right now.