Want To Sell Internationally Through Amazon? Here’s What You Need To Know.
The Amazon Advantage
Amazon’s Advantage? Huge international marketplaces.
Amazon currently sells in 13 marketplaces with a total of 175+ fulfillment centers (and growing) that reach 185 countries with loyal Amazon customers. These marketplaces are divided into three regions: the Americas, Europe, and Asia-Pacific. Amazon is perhaps, one of the most consumer-trusted brands in the world and thanks to their “state-of-the-art international logistics capabilities” being able to enter into new countries and sell is considerably easier. Take for example that you are a U.S. based company that sells swimwear (on domestic e-commerce & Amazon) and in the winter months sales are relatively lower than in the summer months. How can you improve your cash flow during the winter? Try selling internationally with Amazon to Australia or in South America where it’s summer! By selling globally on Amazon, sellers can take advantage of other countries shopping holidays and seasons. Another advantage about selling internationally with Amazon is that sales data, inventory, orders and messages from buyers or customers from all global marketplaces are conveniently located in one place and sellers are able to receive payments in their own local currency.
For expanding business internationally, Amazon offers its sellers two options: Global Selling and FBA Export.
Amazon Global Selling
Amazon Global Selling option is for sellers who are more self-governing/reliant and want more control of their international operations. With this option, Sellers have to decide where and what they would like to sell, understand tax regulations/requirements, and international fulfillment requirements. Amazon connects sellers to a network of third-party solution providers from different industries ranging from External Translation Providers to Content to Trademark Application. Most importantly, sellers must decide how they want to manage their business: with self-fulfillment or with fulfillment by Amazon, as well as the “ins-and-outs” of importing and exporting.
As the name itself implies, sellers who opt for this internationally ship orders directly to their customers. This process can be quite complex if the seller’s inventory is located in a different country than the marketplace they desire to sell in. Sellers are the exporter of record and have to find the proper carrier (broker) that can ship internationally. The carrier then collects duties from the buyer on the items shipped before the delivery, however it is not recommended by Amazon to transfer over the duty cost to the customer. The seller therefore has full responsibility over the shipping expectations, costs, and fees. For an experienced (and trusted) seller with deep know-how of foreign import/export this could be a viable strategy. For additional info, consult this page.
- Pros: Full control over shipping methods.
- Cons: Costs, duties, possible customs delays, customer service, returns, less competitive offer due to delivery time, and taxes.
FULFILLED BY AMAZON (FBA)
To use FBA for international orders, one must open a seller account and enroll their seller account in Amazon’s FBA program in the marketplace of choice. The seller ships (exports) inventory to the FBA center of the marketplace (under specific obligations), acting also as the importer of record. The FBA seller must be aware of the import taxes, customs duties and fees per country. If a seller fulfills within a country inside the European Marketplace, they are able to fulfill orders from other EU marketplaces with the same FBA seller account choosing from three different fulfillment programs: Pan-European FBA, European Fulfillment Network, or Multi-Country Inventory.
For more information regarding FBA, please visit this page.
- Pros: Simplified shipping (Amazon ships to customers) and inventory is closer to customers.
- Cons: Costs, custom duties and taxes.
- Pan-European FBA: a seller can fulfill orders across the European Marketplace without incurring per-unit-cross-border fulfillment charges, from one pool of inventory which Amazon then distributes across the European fulfillment centers. Sellers can enable Pan-European FBA in the Fulfillment by Amazon settings and becomes active after creating an offer in each of the European Marketplaces desired.
- European Fulfillment Network (EFN): sellers who are already enrolled in FBA are automatically able to use EFN with no additional registration or costs. The seller sends the inventory to the home marketplace, then adds the product listing to the marketplaces of choice and once those products sell, the seller pays a fee per order once shipped outside the domestic marketplace along with the original FBA fees.
- Multi-Country Inventory (MCI): this program helps reduce delivery time to the customer to grow international sales and keeping offers competitive. Sellers export their best-selling products to the country/marketplace of choice to have their inventory local and there are no minimum requirements. To use MCI, sellers must create listings with Amazon’s Build International Tool and then select the desired country in which to sell in.
Selling outside of one’s domestic country requires the seller to export and import items, whether they decide to fulfill orders on their own or with FBA. For somebody with little to no experience with the technicalities of import/export, it may be advisable to hire a customs broker or freight forwarder to streamline the process to ensure smooth international transfers on time and securely. If the seller decides to use a logistics provider Amazon suggests contacting them as soon as the seller signs up for FBA due to the time it takes to complete the paperwork. Amazon does not act as the Exporter of Record (EOR) nor the Importer of Record (IOR), therefore the seller must establish this on their own or with a logistics provider. If the seller were to list Amazon as the IOR, the items would be refused and sent back to the seller at their own expense. For more detailed information about arranging a shipment with a customs broker or freight forwarder, you may consult this page. At any rate, whether self-fulfillment or FBA, the seller assumes all responsibility with complying with the laws and regulations of import/export, customs, shipping arrangements, permits and authorizations.
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FBA Export is a program that sellers can enroll export-eligible products to be sold international marketplaces (more than 100 countries) with no additional costs or going through the hassles of import and export arrangements. This option is made available for sellers who sell internationally the Amazon.com site. The seller sends the eligible products to the same Amazon Fulfillment centers and when customers purchase one of the seller’s products, Amazon ships the products to their international destinations and transfers the international shipping rates and customs duty on to international customers shopping on Amazon.com. Once the seller opens an FBA account on Amazon, they must go to the Export Settings within the FBA section to select FBA Export and submit. The FBA Export seller must create accounts in Amazon’s global marketplaces. Amazon takes care of the import duties, as well as the customs clearance.
For more technical information on export-eligible products, requirements and restrictions, you can visit this page.
- Pros: Simplified process for international shipping, no logistics hassles, no extra costs, faster delivery times and sellers do not have to pay for any returns.
- Cons: Could make your products less competitive or attractive due to the extra shipping rates passed on to customers.
Ready To Expand Internationally?
Selling internationally can be a tricky process but it doesn’t have to be! Whether you are already operating on Amazon or would like to get started using Amazon in your sales mix, we can help from account setup to selecting the right products to sell, strategy, and native translations for content, as well as product listings with our strategic consulting service. Keep up with the latest Amazon news with our Facebook and Twitter profiles, where we post a curated collection of Amazon-related news each week. Want to know more about selling internationally with Amazon or interested in a specific topic that we haven’t covered yet? Drop us a comment in the box below!
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