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Amazon Sellers FAQs

If you are looking to expand into the UK and Europe then you are sure to have some questions, so please find below some previously asked Amazon sellers FAQs with our relevant answers.

If you are unable to find the answer to any question, then please contact us at admin@extradirect.co.uk and we will be happy to answer and list your question here.

I have a successful Amazon business here in the USA already, so why should I bother with the UK or Europe?

That is a good question, especially if you have a good business there already, but here are some reasons why you should seriously consider it – there will be plenty more, but these should give you enough evidence as to why it’s such a good opportunity.

  1. You have probably done 95% of the work already in sourcing, manufacturing and developing your product and this is a very easy way to expand and increase your sales outside of risking new products, more developments, sourcing alternative products etc
  2. The USA market place is saturated with sellers, as more and more people are becoming involved with  using Amazon as a way to sell their goods, meaning competition will only ever increase and your margins will surely come under increasing pressure, so finding an alternative could be an excellent way to combat this.
  3. The European markets  are very much underdeveloped, meaning many of the sellers here simply don’t have the ability or knowledge like a seasoned American seller, so you will have far less competition in this marketplace.
  4. PROTECTING YOUR BUSINESS – This is one of the key reasons why a successful business should seriously consider horizontal expansion as the bigger you grow the more likely you may come under threat, so by having a separate entity in an alternative market place will certainly help protect the long term future of your business interests.
Do I HAVE to regsiter a UK Limited Company to sell into the UK?

No, it is not compulsory to register a UK Limited Company to sell here, however there are various reasons why doing so will benefit you so is often the best and most efficient way of expanding your business.

You can use your current LLC or foreign entity however you will need to register for VAT in order to obtain your EORI number which will then allow you to sell into the UK and Europe.

Will you will provide me with a UK address for the registered company or will I use my address here in the States?

When registering a UK limited company it is mandatory to have a UK registered address, which we can help with so you will not be able to use your USA address.

So if I am not registered for VAT can I sell at a lower price or price it higher as though I were charging VAT and keep increase profit margin?

Yes that is correct, so you can effectively charge a higher price as though it did include the VAT but as you would not be registered, you would not be required to pass that on to HMRC. Alternatively you could sell your goods at a lower price and be more competitive, which ever you felt was best for your business however please bear in mind you will be required to register once your income is above £85,000 (Approx $110k)

I found a company that said could help, but their UK tax knowledge was zilch, what makes you different?

UK Tax (including the various aspects of Vat both inside and outside of the UK) and ensuring you get the right advice is paramount to ensure your business is fully compliant, which is why we advise to use our accountancy partners AVASK Accounting, who with over 1000 current clients and with extensive knowledge in VAT and tax issues, they will help guide & advice you how best to run your business, with hands on advice.

So coupled with the ability to open a suitable business account as well as all the other requirements, we can offer a fully managed service from start to finish and all available without the need to leave the comfort & safety of your own home.

I will need a business bank account registered with the new limited company, right?

Yes, if you register a UK limited company you will require a business account in your new companies name to collect the payments from Amazon as they will not pay into any other account. Whilst that is ordinarily very difficult if you are a non UK resident, we have some options available who will accept non UK resident directors and shareholders, so will certainly be able to help you.

When good are sold on Amazon is the VAT priced into to cost of the item or do you see it separately?

No in the UK, when selling to the general public all taxes are expected to be INCLUDED and are not shown separately, so whether you are VAT registered or not will not make any difference with regards to to the price your buyers will.

The only difference is if you are VAT registered you will need to account for that in your sales and pay any respective VAT due to HMRC here.

What is the benefit of creating a UK company to sell on Amazon UK as opposed to selling as a USA entity?

The benefit of creating a UK company is that you don’t have to register for VAT until your revenue is over £85,000 (approximately $110,000 per year).

As a USA company, you’ll need to be VAT registered from Day 1

You may also get similar “threshold” VAT exemptions in all the other EU countries…so you don’t have to pay (until you reach the threshold) in Germany, Spain, France or Italy

Another potential benefit is that you can save money in currency conversions because you can transfer your UK funds using a more competitive FX company rather than Amazon exchanging your payments at their potentially higher margin rates when converting payments back.

One last point is protection, by having a separate business entity, should either or come under attack or have any problems, you will always have the other entity still trading.

Seems like I'd just end up paying someone to form a UK entity just to avoid having to file for VAT.

The key reasons why you would use a UK company is to
a) Save a considerable amount of money just on Vat, so any cost is overwhelmingly out weighed by the benefit,
b) you would save money on FX payments when collecting fees, as all payments will remain in GBP and can be sent Internationally using a much more cost effective method than Amazons 3-4% charge and finally
c) by using a separate entity it will completely protect all your existing business interests, as should any entity come under threat, you will always have the other one to fall back on (or possibly sell should you become established and no longer wish to continue with it)

How quickly can all of this be set-up and do I have to visit the UK?

To register a new business and open you a suitable business account will take no more than a couple of weeks once all your documents have been provided, so very quickly in real terms – PLUS you will NOT be required to visit the UK for any part of the process, meaning we can do everything remotely often with just copies of your identification documents.

There are other banking solutions which may take longer and need a UK visit, but we do have options which allows you to avoid this.

What about fulfilment, who is going to help with my stock?

Of course we have plenty of sellers here already and through our network of contact can offer a full storage and fulfillment service for any FBA sellers, so that area will be fully covered once you are ready to ship your goods.

DID YOU KNOW? That if you are using FBA services and your stock is held here in the UK, then Amazon can still deliver directly into Europe, so no need to worry about additional stock for those countries. They also offer, from the UK, Prime +1 for many European countries meaning customers can get their goods within two days of ordering.

Company Formations

Register and Open your new Limited Company ready to start trading in the UK.

Business Accounts

Fully Regulated Business Accounts for All Non-UK Resident Directors & Shareholders.

Accountancy & VAT Advice

VAT, HMRC, EORI, Tax Advice & Accountancy Services to ensure your business trades legally & compliantly in the UK & EU

Fulfillment & Storage

From Port to your FBA centre, we can help you manage your stock, giving you one less thing to worry about

International Payments

Make Free International Payments at competitive rates from our FX Partners.

Trade Finance

For Amazon sellers, Trade Finance options are available to help fund your stock purchases.