How to sell on Amazon USA from the UK

Key takeaways

• You can sell on Amazon USA from the UK.

• You don’t have to be based in the USA.

• The main downside of selling on Amazon USA is losing money on the exchange rate.

• However, you can mitigate this with a Wise Business account to receive money at the mid-market exchange rate.

Yes, sellers from the UK can sell on Amazon.com from the UK - great news for those wanting to expand their Amazon businesses.

But, before you can tap into America’s vast market, you’ll have to register a new North American account first.

You can even transfer your UK product listings over to Amazon USA using Amazon’s Build International Listings tool, meaning you won’t have to start from scratch.

This will save you time, allowing you to manage, create, and update listings simultaneously. Plus, if you change your prices on your UK listings, the tool will automatically adjust it for the US marketplace.

The only downside is that you’ll need to re-apply to get approved again for any product categories that you received approval for in the UK, as the USA will have different regulations.

Expanding your reach into the Amazon.com marketplace brings with it many benefits that can lead to business growth, transforming your brand and scaling up, allowing you to fully go global. These include:

• A bigger market: Amazon.com allows you to access one of the world’s largest economies. What does this mean for you? Bigger market reach, more customers, larger product visibility and more opportunities.

• Boost your cash flow: The US market is famous for its holiday seasons and peak sales events, such as Black Friday, Thanksgiving etc., that the UK either doesn’t have or isn’t as commercialised. By being a seller in the US market, you can capitalise on these high-demand periods to strengthen your revenue stream and boost your cash flow.

• Seamless global operations: Another major benefit is Amazon’s infrastructure. Thanks to their efficient logistics, tools and customer service, the whole international selling process is simplified, meaning you have more time to strategise on growth and expanding your business.

• Unified account: With a North America Unified Account, selling becomes a breeze, and you can conveniently switch between partner tools to list and manage your products in multiple marketplaces, including, Amazon.com as well as Amazon.ca and even Amazon.com.mx.

While there are undoubtedly many benefits, expanding into the USA can also be tricky, and no e-commerce marketplace is perfect.

Knowing these potential challenges in advance will help you ensure that your decision to sell on Amazon USA is right for you and can help you create a better strategy to reduce any impact on your business.

• Greater competition: The USA is one of the world’s largest economies, with Amazon being the largest retailer in the country. And while Amazon.com’s 1.1 million active sellers dwarf the UK’s 281,257, a bigger marketplace also equals greater competition, and your product can easily get lost in a sea of offerings if you don’t have an effective business and marketing strategy in place.

• Taxes and regulations: Selling on Amazon.com means you’ll have to comply with local taxes and customs regulations to avoid paying costly penalties. However, there are consultants you can hire and work with to help you take out some of the guesswork and mitigate any potential risks.

• Currency: Selling on Amazon.com will mean pricing your products in US dollars. Therefore, receiving your earnings into your UK bank account will result in exchange rates and processing fees. A potential workaround for this is opening a US-based bank account through Wise, which provides you with US account details, resulting in potentially smaller transaction fees.

• Adjusting to local business dynamics: Every market has its own quirks, and what works for you in the UK might not work for you in the US. That’s why thorough research and market analysis are a must if you want to replicate your success in the States.

To set up shop on Amazon.com from the UK, first, you’ll need some documents to register your account before you can get started and list your products. These include:

• Contact details: You’ll need to provide your basic contact details, including a valid phone number and an active email address.

• Bank account: You’ll also need to provide financial details to manage transactions, such as an internationally chargeable credit card and associated billing address.

• Seller identity verification: Amazon places a lot of importance on seller authenticity. Depending on where you reside and your business is located, you’ll need to provide a form of valid ID, such as a passport or driver’s licence, as well as proof of residence, such as a bank statement or utility bill.

No, you won’t need an American bank account to sell on Amazon.com from the UK, and sellers have the flexibility to choose what currency they want to get paid in.

But, if you’re seeking efficiency when it comes to money management and are interested in having a US bank account for convenience, Wise has got you covered.

Wise allows you to receive USD account details to receive money in USD from sales - and the best part is you can open an account from the comfort of your own home in the UK!

Wise’s multi-currency account also allows you to effortlessly convert your earnings back to GBP at the mid-market rate with low fees or keep your profits in USD in case you have to make any payments to suppliers.

The bottom line? Thanks to Wise, you don’t have to lose money on the exchange rate and let currency conversion erode your hard-earned profits from Amazon.

If done right, selling on Amazon can be incredibly lucrative. However, it doesn’t come for free, and it’s important to understand the different fees you might have to face when selling on Amazon.com from the UK.

It’s important to note that these will apply whether you’re selling locally at home or internationally. But selling products across borders in dollars will mean you are subject to additional charges.

Currency conversion fees

• If your Amazon account links to a UK bank, selling to international customers on Amazon.com leads to extra charges, including:

• A cross-border fee of 0.5%.

• A processing fee of 2.7%.

• An authorisation fee of £0.30 per transaction.

• A currency conversion fee of 2.5%.

You can significantly reduce these fees with a Wise Account, giving you access to local USD account details. Get paid directly in dollars from Amazon and have the freedom to convert into different currencies or even make a 4.33% APY return on your USD balance in the form of savings interest.

Account plans fees

• Professional: A flat rate of £25 per month.

• Individual: £0.75 for each item sold.

Referral fees

• These vary between 5-45% based on the type of product you are selling and its value.

Fulfilment fees

• If you choose Amazon’s storage and shipping option, known as Amazon FBA (Fulfilment by Amazon), charges will apply, regardless of whether you manage these tasks by yourself or not.

Refund administration fees

• If a customer seeks a refund, administration fees can go up to 20% of the original order or a maximum of £5.

High volume listing fees

• Those listing a high volume of products will have to pay a high volume listing fee of £0.0003 per product, excluding media items.

All Amazon sellers must pay sales tax when trading on the e-commerce platform due to collecting sales tax from their customers.

Sellers also have to hand over this collected tax to the government to adhere to US tax legislation.

It’s important to note that sales tax is unavoidable, and failing to pay will result in weighty fines and penalties that can impact your business and bottom line.

In addition, you’ll have to ensure that you’re compliant, and your responsibilities as a seller include registering and collecting taxes as well as paying the correct amount to the US government.

Order fulfilment is how people get the products they’ve paid for and is one of the last and more crucial stages of the e-commerce sales process as a retailer. To fulfil orders in the US, you have two main options:

Amazon FBA

One of the most popular options is using Amazon’s FBA service. With FBA, you ship your inventory to one of Amazon’s many fulfilment centres.

Once you make a sale, Amazon takes over and picks, packs, and dispatches the order to your customer.

Amazon FBA also handles any returns and exchanges that may occur and even carries out customer service inquiries, ensuring an efficient process for both sellers and customers.

On the downside, sellers should be aware that Amazon’s storage process might result in having to pay additional tax nexus in various states. This is when your business has a connection to a state and is generally defined as having a physical presence, such as a warehouse where your goods are stored.

Direct shipping from the UK

Shipping your orders directly from the UK is another option you could go for, but you should be prepared for high tariffs.

If your sales surpass the $2,000 threshold, Amazon sellers are required to have a Federal Employer Identification Number (FEIN) for customs purposes.

However, if you have a FEIN, you are obliged to file and pay US federal taxes, even if no tax is owed due to treaties between the UK and the US.

In addition, you’ll also have to consider insurance, which is another added cost. Once your goods are in the US, they’ll have to be insured to avoid potential issues such as quarantine.

While expanding your business into the US market is definitely an exciting prospect, providing new opportunities and new customers to conquer, it also comes with its own challenges - most notably, managing costs to protect your profit margins.

One of the biggest factors that will affect your profit the most will be having to deal with currency exchange. Here's how you can safeguard your earnings:

Be cautious with exchange rates

Even when selling on Amazon.com, you can still receive payments directly into your UK bank account.

However, this can leave you exposed and vulnerable to unfavourable exchange rates used by Amazon and your bank. While it may seem unfair, these institutions typically use higher exchange rates than those you might find on currency exchange platforms, meaning you'll lose out on some of your earnings when they get converted.

Consider using Wise

Avoid these high conversion costs and consider using Wise instead.

With their multi-currency account and transparent fees, you can benefit from the mid-rate market and only get charged a nominal fee that's clearly outlined upfront, meaning no nasty surprises during conversions.

You'll also receive a set of US account details, meaning that, in essence, you have a US bank account.

What’s more, you can earn a 4%+ return on your USD and GBP balances via interest on deposits. Your money won’t just sit idly by as you strive to grow your Amazon business.

Not only can you receive your customer payments in dollars, but you can also hold these funds and transfer however much you want back to your UK balance when you need.

This flexibility, combined with the guarantee of the mid-market exchange rate and a transparent fee structure, can go a long way to not only protecting but enhancing your profit margins as you navigate the US market.