This is article 2 on how to create a cash generating asset in the form of an Amazon.com wholesale business.
In the first article “The 6-Step Guide to Creating an Amazon.com Business Asset” I share with you the Amazon.com asset revelation I had when I met successful Amazon.com entrepreneurs Dan Meador and Dylan Frost and realised ANYONE, ANYWHERE could create and run a profitable Amazon.com business.
If you haven’t read that article yet, click here to read it now.
In this article I expand on the 6 most common questions Dan gets asked by non-US peeps on how non-US residents can set up their profitable Amazon.com businesses assets.
The truth is: selling on Amazon has NEVER been easier. Amazon makes it easy because they want to introduce more sellers to serve the needs of their gigantic customer base, and create a more competitive marketplace.
This may seem daunting, but it really is not, and Dan dispelled some of the myths (and limiting beliefs I had) that might prevent you from taking action and getting started.
1) What information do wholesale companies need?
If you are a resident of the US or have a US corporation, they will need a resale certificate.
If you are NOT a resident of the US or do NOT have a corporation, this does NOT apply.
Wholesale companies in general have to be able to show that they sell ‘Business to Business’ (or B2B). You may use your country’s documentation to show that you are a real business.
You can (and likely should) speak to a US tax professional to see if there are advantages of registering as a US based business vs registering in your own country.
2) What if I don’t want to sell on Amazon.com and want to sell on my own marketplace and order from wholesalers in my country?
This works as well. To order from the wholesale side, you would need your country’s documentation to show that you are a business.
3) What do I need to do to sell on Amazon if I am not a US citizen?
You have to sign up for an Amazon account, and will need the following to do that:
- A credit card that can be charged internationally (typically Visa or Mastercard are perfect).
- A local bank in your country that supports ACH (Automated Clearing House). This means your bank accepts electronic transfers.
- If you choose to go this route, check out the Amazon Currency Converter for Sellers (ACCS): https://sellercentral.amazon.com/gp/seller/registration/participationAgreement.html?itemID=200497780&language=en_US
- Similarly, you can set up a US-based bank account and handle transfers yourself. This is usually done to save additional money. This should certainly be considered and investigated as an option. If your currency is not supported by ACCS, you will need to do this and set up a US bank account.
- Your local address.
- A phone number (with your international prefix). As an alternative, Dan suggests setting up a US-based phone number through a service like Skype.
- A US Employer Identification Number (EIN). You don’t have to be a US corporation or of any legal status in relation to the US to get this number. You would simply need to fill out the online form 10-BEN on the irs.gov website (the US government tax collection agency) to get this.
4) What do I need to do to be in compliance with US taxes/laws?
Dan is not a tax professional and neither am I, and anyway tax is so specific that you should always consult one who know the ins and outs of the tax laws on your country. You should also ask your tax professional which forms need to be filed with the IRS (if any) to make sure you are in compliance. You can mention the following forms and ask them which of these may apply:
- IRS 1040
Your tax professional will be able to easily advise you which of these forms (or others) may be applicable to your situation.
This all sounds more complicated than it is. Most of these things can literally be clarified and done in MINUTES.
5) How will I store and ship my inventory?
Now that you are set up, the next challenge is actually storing and shipping your inventory.
Dan and Eric handle all their shipping to customers through Amazon FBA, and HIGHLY suggest the same to everyone regardless of whether they are US-based or based internationally. At that point, your only challenge is getting your product from the supplier to the Amazon Fulfilment Center.
Many suppliers will ship direct to Amazon, and this can be considered as an option. If the item has “prep required”, Dan generally suggests having this shipped to a US-based prep center to handle that, as Amazon’s prep fees are quite high.
Prep centers are also an option if your suppliers will not ship to Amazon directly. Prep centers receive your product, inspect it for damage, perform necessary prep to insure its safety for Amazon and then the journey to the customer.
Dan suggests using Prime Zero Prep (on the USA East Coast) or Prep It Pack It Ship It (on the USA West Coast) as a prep center.
There are certainly a lot of options for this, and you can definitely investigate to see which might be best for you.
These companies have very detailed on-boarding processes, and can get you set up with ease in minutes!
6) What happens if I get returns?
When you are selling, and hopefully doing really well, there is one complication you have to tackle: returns.
Returns are a part of business.
In Amazon.com businesses returns are generally between 1-2% of your sales. Many of those products can be resold, and Amazon can make that determination if you choose to let them do that (this is an account setting in your Amazon account).
Whether or not you choose to let Amazon sell your applicable return items, you will have some amount of returns that cannot be resold.
There are a few options for what you can do with these.
- Contact US-based charities to see if they may be interested in receiving your returns (Dan and Eric donate a good portion of their returns, because it is easier and they can write off some amount of that on taxes). That may be more difficult for you, as you will be operating internationally, but some charitable organisations will receive shipments.
- You can have Amazon destroy these. I believe Amazon charges $.10/per item to destroy these. However, this prevents you from paying storage fees, and would simply be written off as a loss against money you had made.
- You can have the items shipped to a returns center and processed/sold. Here are a few of those services (Dan advised me they have not personally used these services, but have heard good things from other people). Each of them are different and unique in how they handle the product and pay you. Review them and see if any work for you.
Selling on Amazon from outside the United States has literally never been easier. There can be HUGE advantages to selling outside the country as well!
The processes may appear daunting but most of the things in this article can be done in minutes. The rest, are just part of owning your own business and creating your financial freedom by having assets working hard for you and earning income for you, so you don’t have to.
Hopefully this helped put in perspective what you need to do to get started with your Amazon.com business when you’re not a US resident!
I’m sure you can tell that the prospect of creating an Amazon.com asset spewing out cash has me buzzing!
So much so that I knew I had to get The Wholesale Formula team to share their strategy with all of The Wealth Chef tribe (that means you) in the form of an Amazon Wholesaler Workshop and they have said YES!!
The Amazon Wholesaler Workshop is a FREE online workshop comprising content packed teaching sessions starting on 30 January 2020 through to 9 February 2020. These sessions are recorded so you won’t miss out, but it will be available for a limited time.