In fact, of Amazon’s 2.2 million third-party sellers worldwide, 86% sell in the U.S. marketplace — and 41% aren’t even located in the U.S.
If you’re interested in becoming a seller on Amazon’s U.S. platform, but don’t live in America, this piece will teach you how to start selling by selecting your preferred type of account status, business entity, available markets. By the end of the article, you can learn what documents, the cost you need to prepare in the process, and how to go global to sell your listings.
Non-US Sellers on Amazon & Fulfillment by Non-US Merchants (or Sellers)
You don’t need to be a United States citizen to sell on Amazon, but once your transactions reach 50 items on the marketplace, you’ll need to have a proper tax id.
Regardless of the type of account, you want to open, a non-citizen of the United States will typically have very similar requirements to citizens or residents of the country in order to sell on Amazon. You need to obtain your FEIN (Federal Employer Identification number).
You can obtain your FEIN number by filling out Form SS-4, as provided by the IRS. You don’t need to have any legal status in the country in order to get this number. Once you have the number you can sell products on Amazon as an individual, instead of registering your business. If you’re registering a business, then you should wait to get your FEIN through that process.
Non-US Sellers on Amazon & Fulfillment by Amazon (FBA)
However, if you’re not a resident of the United States, and you want to sell through Amazon’s FBA (Fulfillment By Amazon) program, you’ll need the following information in order to register an FBA account, regardless of the individual or business account:
- Your Home or Business Address in US: A place where you can receive personal mail.
- Email Address: An address Amazon can send important information about your account.
- Credit Card: An internationally chargeable credit card with a valid billing address.
- Phone Number: This will be needed to verify your identification during registration.
- United States Tax ID: Either a social security number (for individual sellers only) or a FEIN number.
- Bank Information: You’ll need a bank that can take an ACH (automated clearing house) payment from Amazon. (if you’re unable to open a U.S. bank account, you may need to use Amazon’s Currency Converter for sellers which will allow you to sell on Amazon without opening a U.S. bank account)
Additionally, if there are states where you have a tax nexus then it’s required for you to include your state tax id in all of those states. If you’re not residing in the country then this will only apply to any business dealings you may have in specific states for the business that will be selling on Amazon.
What Types of US Legal Business Entities You Can Create
Currently, if you’re not a citizen or a resident of the United States you can only create two types of legal business entities: an LLC (limited liability company) or a C-Corp (or corporation).
Limited Liability Company
A Limited Liability Company can be best described as a hybrid between a corporation and a partnership. It provides easy management and “pass-through” taxation (profits and losses are added to the owner(s) personal tax returns) like a Sole Proprietorship/Partnership, with the liability protection of a Corporation. It’s a relatively new form of business created in 1977 in Wyoming and now recognized in all 50 States and D.C.
Like a corporation, it is a separate legal entity; unlike a corporation, there is no stock and there are fewer formalities. The owners of an LLC are called “Members” instead of “Shareholders”. So in essence, it’s like a corporation, with less complicated taxation and stock formalities.
The heart of a Limited Liability Company is known as the “Operating Agreement”. This document sets the rules for operating the company and can be modified as the business grows and changes.
Operating an LLC is less formal than a corporation, usually only requiring an Annual Members’ Meeting and Members’ agreeing to changes of the Operating Agreement and other major company decisions.
PROS: Provides the liability protection of a corporation without the corporate formalities (Board meetings, Shareholder meetings, minutes, etc.) and extra levels of management (Shareholders, Directors, Officers). Taxed the same as a sole proprietorship (1 Member LLC) or a partnership (2 or more Members).
CONS: Usually more expensive to form than a DBA, requires more paperwork and formal behavior.
How much to cost to start an LLC
Regular Corporation (C-Corporation)
A corporation is a separate legal entity that can shield the owners from personal liability and company debt. As a separate entity, it can buy real estate, enter into contracts, sue, and be sued completely separately from its owners. Also, money can be raised easier via the sale of stock; its ownership can be transferred via the transfer of stock; the duration of the corporation is perpetual (the business can continue regardless of ownership), and the tax advantages can be considerable (i.e. you are able to deduct many business expenses, healthcare programs, etc. that other legal entities are not). Income is reported completely separately via a tax return for the corporation.
A corporation is set up in this structure:
- Shareholders own the stock of the corporation.
- Shareholders elect Directors (known as the “Board of Directors”).
- Directors appoint Officers (President, Secretary, Treasurer, etc.).
- Officers run the company (day-to-day operations).
In many cases (especially during the startup phase), you will be the 100% owner of the stock, therefore you elect the directors (usually yourself) and then appoint yourself as an officer (or all the officers: CEO, Treasurer, Secretary). The rules for operating your corporation are set in what is called Corporate Bylaws. This document sets the rules for the company and can be modified as the business grows and changes.
Operating a corporation involves at the minimum holding a yearly Directors and Shareholders meeting (the location is determined by you and the expenses are deductible), keeping written minutes of major company decisions, and maintaining general corporate compliance as dictated by the Corporate Bylaws.
PROS: The oldest, most successful, and most prestigious type of business entity; provides personal liability protection; conveys permanence, can reduce taxes (lower tax rate on retained profits, items like healthcare, travel, and entertainment are deductible).
CONS: More expensive to set up than an LLC; more paperwork and formality required than an LLC (holding Shareholder/Board meetings, keeping minutes and resolutions).
Choose your Business Model to Sell Products on Amazon
You may already have an idea of what products you’d like to sell, but if you don’t, there are great ways to learn high-demand, low-competition product opportunities in the U.S. market.
After Amazon approves you as a seller in the U.S. marketplace, you will first need to determine which business or sales model you plan to use.
These are the three most popular business models for international Amazon U.S. sellers:
- Private Label: Creating your own brand/label in order to manufacture your own products. While it is somewhat more involved than the other business models, it’s by far the most popular; 71% of all Amazon sellers are private label sellers.
- Wholesale: Purchasing bulk goods to resell on Amazon. Unlike a private label, where a seller must create their own brand, the products wholesalers sell are created by other brands/companies.
- Dropshipping: Promoting and selling products offered by another supplier or manufacturer. When the sale is made, the drop shipper pays the supplier/manufacturer to ship the products on their behalf.
While other business models exist, logistically, these three are the easiest since they all require little to no handling on your part. You can sell these types of products on Amazon without ever actually seeing the inventory yourself.
Conversely, business models like retail arbitrage require you to source the products in person, then ship those goods to Amazon — this could end up being costly.
Choose a Customs Broker
In order to import your item into the U.S., you will need a customs broker to get your product into the country (unless you ship via air like UPS, DHL, or FedEx, in which case it is included as a service).
Your customs broker will guide you through the exact process of clearing your shipment, including the requisite paperwork, documentation, taxes, and more. This is perhaps the least enviable aspect of selling on Amazon’s U.S. store, but something that all importers have to go through.
We recommend using a customs broker like Flexport, which handles all the customs, freight forwarding, and inventory storage for you. You can find alternative customs brokers with a quick Google search for contact details and reviews.
Which Countries’ Citizens Can Sell Products on Amazon U.S.?
Currently, Amazon U.S. accepts sellers from 102 countries around the world. You can view the entire list of accepted countries in Amazon’s help center.
According to Amazon, to be able to sell from one of the countries listed, a seller will need to have proof of residence in their home country as well as a valid phone number and internationally chargeable credit card.
What Countries and Marketplaces You Can Sell Products on Amazon and How?
As discussed in the other piece named Niche Product-driven Strategy Is Not Enough? 7 Secrets to Amazon Marketing Success, there are more than 180 countries and 12 marketplaces you can sell through Amazon seller center. It’s very easy to kick off the Go Global Selling activities.
Take Japan for an example, you can link your North America selling account to your Amazon.co.jp selling account to create Amazon.co.jp listings for your North America Products.
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If you are interested in how to sell in Japan as a non-Japan citizen, please check out this article