Question About FBA in the States (UK Resident)

[ljb7]

Hi guys,

I'm looking for some advice regarding Amazon Fulfilment in the States from a UK resident... but there's a twist.

So I'm interested in getting into FBA, which is obviously doable by international sellers but there are many more costs (shipping from sellers country to the states, charges from sellers country when product is imported from China, taxes on products entering the states)... But I had a lightbulb moment.

My mother is American, although I've always lived in the UK. Therefore, I have a lot of family in the US and one close family member who I can rely on for sure (my mother's brother).

I'm a UK citizen as well as a US citizen - I don't know if this will have any effect on the situation, but let it be noted.

I was thinking earlier, I could receive product samples to my address in the UK from the suppliers, and if I'm happy with them and decide I want to take them the FBA route in the US, I could get a larger order sent directly to my American uncle who could then proceed to send it to FBA after checking the quality of the products.

This would mean that I wouldn't have to pay import tax and duty for the package entering the UK because it would never set foot inside the UK, and I'd also not have to pay the freight costs of sending the package from the UK to the US.

My question is, is this legal or absolutely fine? Does this count as tax evasion or just tax avoidance?

I realise it's probably best to seek professional advice for this situation - but it'd be nice to hear peoples opinion's on here as well.

Thanks!

 

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[mikey3times]

I can't comment on the legality. You need to consult an attorney or accountant who knows about international trade laws.

However, I did recently read about a person who uses a shipping company that takes care of getting the goods from China into the US and then on to the FBA warehouses. He said that he doesn't touch the product at all. Here is the article: http://entrepreneurboost.com/first-30-amazon/. Look under, "How Many Trips Did I Take To The Post Office?"

Good luck.

 

[ljb7]

I can't comment on the legality. You need to consult an attorney or accountant who knows about international trade laws.

However, I did recently read about a person who uses a shipping company that takes care of getting the goods from China into the US and then on to the FBA warehouses. He said that he doesn't touch the product at all. Here is the article: http://entrepreneurboost.com/first-30-amazon/. Look under, "How Many Trips Did I Take To The Post Office?"

Good luck.

Thanks for the reply.

I read the article which was a good read, however, I don't think the section you mentioned relates to my situation in particular because this guy resides in the US anyway.

 

[RazorCut]

The Import Duty and VAT you are talking about are specific for goods brought into the UK. As your goods are being shipped and sold directly to the US there would not be any UK taxes to pay. You would of course have to pay any relevant US import duty and taxes for the landed goods you sent directly there.

Also you would obviously also pay income tax on your profits though I'm not sure if this would be US or UK tax, though (going by Starbucks example), if you keep the profits from entering the UK you theoretically wouldn't have any UK tax to pay but the laws on that might be changing. Best to speak to an Accountant.

This is an area I am looking at as I have several products I wish to sell State side and would prefer using a distribution channel to facilitate that.

Have you looked at any other distributors other than Amazon?

Where are you based in the UK?

 

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[mikey3times]

Thanks for the reply.

I read the article which was a good read, however, I don't think the section you mentioned relates to my situation in particular because this guy resides in the US anyway.

Sorry, I was presenting an alternative to having your family member handle the shipping to Amazon.

 

[ljb7]

The Import Duty and VAT you are talking about are specific for goods brought into the UK. As your goods are being shipped and sold directly to the US there would not be any UK taxes to pay. You would of course have to pay any relevant US import duty and taxes for the landed goods you sent directly there.

Also you would obviously also pay income tax on your profits though I'm not sure if this would be US or UK tax, though (going by Starbucks example), if you keep the profits from entering the UK you theoretically wouldn't have any UK tax to pay but the laws on that might be changing. Best to speak to an Accountant.

This is an area I am looking at as I have several products I wish to sell State side and would prefer using a distribution channel to facilitate that.

Have you looked at any other distributors other than Amazon?

Where are you based in the UK?

Thanks.

The first part makes sense and of course there is no way of getting around that.

I can imagine keeping profits from entering the UK can become very confusing. Having separate US accounts for the profits and then having them tied up in the states isn't ideal - I guess (?) their only use would be towards sourcing more products from China and similar countries, because that way they'd never pass through the UK or Europe in general.

I'm going to book an appointment with an accountant (I might even get the number for my mums US accountant who specialises in international accounting) to ask about this for sure. I'll let you know how it goes when I speak to him.

Nope, I haven't looked anywhere else yet. I think FBA is by far the best option seeing as Amazon favour your listings if you use it. I may look around though.

I live in Somerset (South West). How about you?

 

[RazorCut]

Nope, I haven't looked anywhere else yet. I think FBA is by far the best option seeing as Amazon favour your listings if you use it. I may look around though.

Are you not considering selling outside of Amazon?

I live in Somerset (South West). How about you?

Ha! Not far from Chepstow on the other side of the river from you.

 

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[ljb7]

Are you not considering selling outside of Amazon?

I'm selling on eBay within the UK already, so when I go FBA I plan to focus on just that on the US front for the foreseeable future. There's unlimited potential with just Amazon.com and I don't see any point in aiming to branch out past that for now - It'd be better just to focus on that.

Ha! Not far from Chepstow on the other side of the river from you.

Awesome mate that's pretty close, if you're ever down in my area let me know and we can meet up!

 

[RazorCut]

Awesome mate that's pretty close, if you're ever down in my area let me know and we can meet up!

I'll PM you.

If it is any help Amazon can also fulfil for off Amazon sales so you don't have to limit yourself to just selling on Amazon marketplace.

http://services.amazon.com/fulfillment-by-amazon/benefits.htm

As someone who used to sell a lot of product on Amazon I would recommend not having all your eggs in one basket. You are at their mercy and that of the competition who will seize the opportunity to copy and undercut on any product they see as selling well. By the very nature of the Amazon store it is too easy to see the most popular lines and cherry pick products you want to compete with.

 

[RoadTrip]

As someone who used to sell a lot of product on Amazon I would recommend not having all your eggs in one basket. You are at their mercy and that of the competition who will seize the opportunity to copy and undercut on any product they see as selling well. By the very nature of the Amazon store it is too easy to see the most popular lines and cherry pick products you want to compete with.

I'm also looking into importing from China, branding the products and selling them on Amazon. You used to sell a lot on Amazon but not anymore? Are you advising against going this route since undercutting is just around the corner? Even if branded products are used?

Thanks!

 

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