In this article, we’ll show you how to set up an Amazon US seller account, how to make your product stand out to US customers, and how to fulfil your products whilst remaining VAT compliant.
We’ll also give you tips on how to reduce the costs associated with selling internationally on the world’s biggest marketplace.
What are the benefits of selling on Amazon US?
The short answer is: you can sell more stuff.
Amazon US net sales in 2021 totalled $314 billion according to Statistica. That figure is nearly 10 times greater than the UK, which pulled in a mere $31.91 billion.
As well as reaching a larger audience of online shoppers, you may find that your products enjoy greater market fit in the US than in Europe.
The brand Bugaboo is an example of this phenomenon. Bugaboo initially launched in the Netherlands and enjoyed marginal local success. But it wasn’t until they expanded to the US that they became the chic buggy of choice for parents worldwide.
How to set up an Amazon global seller account
Before you launch on Amazon US, you’ll need to register as a global seller by following these steps:
- Sign into Amazon Seller Central and select Global Selling from the Inventory dropdown.
- Click on the regions where you’d like to start selling (the US in this case) then hit Register.
- Complete the registration by providing your details.
And you’re done!
You will now be able to manage your Amazon US and UK sales from a single linked account.
Amazon US VAT compliance
Selling internationally comes with some tax complications.
To ensure you remain VAT compliant, you can use a specialist accountant or VAT service such as Elver eCommerce Accountants or SimplyVAT.
You can also use Amazon’s VAT calculation tool to automatically calculate the applicable VAT at your checkout.
How much does it cost to sell on Amazon US from the UK?
Amazon charges its merchants a host of fees, although they would argue that these fees are lower than the amount you would pay to sell and fulfil your products with other providers.
You can roughly break Amazon’s fees down into seven categories. Categories 1-6 apply whether you’re selling at home or abroad, whilst category 7 only applies to international sellers.
- Account fees: a flat fee of £25 per month if you’re on the Professional plan, or £0.75 per sale if you’re on the Individual plan.
- Referral fees: 5 – 45% of the order value, depending on the category and value of your products.
- Fulfilment fees: store and ship products yourself or use Fulfilment By Amazon (FBA), whichever option you choose, Amazon charges a fee.
- Refund administration: 20% of the order value up to £5.
- Closing fees: this cost is exclusive to media items such as video games, books and software. The fee is £1 for books and £0.50 for other media.
- High volume listing fees: £0.0003 per SKU if you list more than 2 million SKUs in a month. This does not apply to media items.
- International seller fees: additional fulfilment charges, cross border fees and currency conversion fees.
What are the additional costs of selling on Amazon US from the UK?
Amazon Pay Multi-currency allows merchants to collect payments from customers in a variety of local currencies. However, if your Amazon account is linked to a UK bank account, you will be charged additional fees when customers pay you in US Dollars. These include:
- Cross-border fee: 0.5% to sell from the UK to the US.
- Authorisation fee: £0.30 per transaction.
- Processing fee: 2.7%
- Currency conversion fee: 2.5% above the wholesale exchange rate.
Fortunately, there is a way to reduce these fees.
How to reduce international Amazon Pay fees
If your Amazon account is linked to a UK bank account, you will have to pay additional fees when accepting payment in US Dollars.
To get around these fees, you have two choices:
Open a local bank account in the US
You can open a US Dollar bank account from the UK and connect it to your Amazon US seller account. By funnelling US sales revenue into this account, you can avoid Amazon’s cross-border and currency conversion fees.
The problem here is that high street banks also charge high FX and transfer fees. That means when it comes to transferring your money back to your UK bank account, you could be charged up to 3.5% above the interbank rate, plus a transaction fee.
Sign up for a global business account
Sign up for a free global business account with Airwallex and you can open foreign domicile accounts in multiple currencies – including US Dollars, Euros, Pound Sterling and Hong Kong Dollars – in a click.
Connect your Airwallex USD account to your Amazon US seller account and collect USD from your customers with no forced currency conversions or unnecessary fees.
Airwallex charges a more reasonable rate of 0.5% above the interbank rate to exchange USD to GBP. Considerably cheaper than Amazon Pay and UK high street banks.
Depending on the volume of your international sales, you could add hundreds of thousands of pounds back into your bottom line using this workaround.
You’ll also have the convenience of managing your money from a central account, rather than dealing with several foreign currency bank accounts. For this reason, Airwallex is a great business bank account option for eCommerce businesses that wish to scale across borders.
How to fulfil your products in the US
Before you launch your products in the US, you need to work out the logistics. There are three steps to establishing a sound fulfilment process:
1. Import goods to the US
If you’re dealing with large volumes, it makes sense to import your products in bulk to the States and store them in local warehouses, rather than posting individual items to your US customers.
Importing in bulk will reduce your shipping times and costs, and make your products more desirable to US customers.
To move your products through customs, you must have your paperwork in order. It’s best to hire a customs broker to advise you, or choose a freight company that offers brokerage as part of their service.
2. Store goods
The US is a big place, almost as big as the whole of Europe combined, so it’s best to research where your core customer base is and choose nearby warehouses to store your products.
Warehouse options include ShipBob, FedEx and of course, Amazon itself.
3. Pack and ship products
Amazon requires that goods are packed and shipped to an exacting standard. You must check that your fulfilment company meets these standards to avoid incurring a fine.
A smooth returns process is also mandatory, so double check that your chosen warehouse has one.
If you prefer an easy life, Fulfilment By Amazon (FBA) will take care of all three steps for you.
By choosing FBA, you’ll know your products will be stored, packed and shipped to Amazon’s standards, and your returns process will be taken care of.
Merchants who use FBA may also be eligible for Amazon Prime benefits, such as next-day delivery, which can dramatically boost your ranking and sales.
How to improve sales on Amazon US
You’ve set up your Amazon US seller account, you’ve linked it to a multi-currency business account, and you’ve sorted out your fulfilment process.
As they say at NASA, you’re go for launch!
Here’s how to make the launch a grand success.
Do your keyword research
The Amazon marketplace operates a bit like a search engine. You must include relevant keywords on your product pages in order to rank for customer searches.
Keywords differ by region, even in English-speaking countries. In the US a baby’s cot is called a crib, trainers are called sneakers, jumpers are called sweaters…you get the picture.
To ensure you’re hitting the right keywords, research the descriptions your competitors use on Amazon US marketplace. You can also use Google Trends to discover the terms customers use when searching for your product in the States.
Take note of US holidays
Some US events, such as Black Friday, have been exported to the UK. Others, such as Independence Day, Martin Luther King Day, Memorial Day and ThanksGiving, remain unique to the States.
Take note of these public holidays and plan your marketing campaigns around them.
Generate customer reviews
Reviews play a big part in both search ranking and sales conversion on Amazon.
Your UK reviews will show up on your US pages, but they won’t be featured in the main review section, so it’s best to generate some local reviews too.
The best way to get customer reviews is to ask for them. Use an automated email tool to encourage customers to review your products after they receive them. To boost response, you can make use of Amazon’s Early Reviewer Program.
With a global audience of 1.2 billion, Amazon provides a perfect platform for UK businesses to launch internationally.
As well as offering a gateway to millions of online shoppers, Amazon removes many of the obstacles that can make international fulfilment difficult for smaller businesses.
If there is demand for your products in the US, and you’re able to make a good profit margin when accounting for Amazon’s fees, you can use the world’s biggest ecommerce site to push into new markets without ever leaving home.