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Breaking Down Amazon’s “Best Sellers Rank”

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We talk to hundreds of entrepreneurs daily. Some are selling on Amazon, but many who haven’t started that leg of their personal journey yet. Most of those who aren’t yet selling on Amazon don’t realize Amazon will literally tell you what to sell.

Think of it from this perspective, if you can look at a product and know that it is selling well – all you have to do is go out and find that product cheaper. If you can do that, the distance between your buy price and sell price (minus applicable fees) is your profit. Amazon tells us what to hunt, all we have to do is find it cheaper and make money.

So, how does Amazon tell us what is selling?

They use a system called “Sales Rank”, or sometimes referred to as “Best Sellers Rank”, or BSR for short.

The Amazon BSR is an incredibly easy-to-understand system. It is a linear comparison for products in a given category, where the lowest sales rank (1) is the best-selling product.

Check this out:

A product ranked #1 in the Home and Kitchen Category is the best seller in that category. Whereas, a product ranked 4000 in Home and Kitchen is the 4000th best seller, so on and so forth.

That being said, it is important to note that a product ranked in Home and Kitchen does not compare or have any correlation to a product ranked in the Baby category. This ranking system strictly compares products from the SAME category, in a true ‘apples to apples’ comparison. The last thing you have to remember here (to get started), is products without a rank have not sold.

Sales rank is on the product page on Amazon. Go to the page, and scroll down until you see product details.

See for yourself in the example below:

Now that may appear to be a bit tricky, right? This product is ranked #2383 in Health and Household, but also shows #7 in Health & Household > Sports Nutrition > Endurance & Energy > Powders. This is absolutely CRITICAL. You only care about the top-level category rank, and should completely ignore sub-ranks.

So, for that product, the ONLY rank we care about is #2383 in Health & Household. Now, we have to determine what that means.

We use a site and app called Jungle Scout. They actually have a free tool that will provide you with an estimate of how many units that product sells each month through that listing on Amazon.

You can see the free tool here: www.junglescout.com/estimator

For the product mentioned above, that rank translates to approximately 1801 sales per month at the listed sales rank.

In our experience, this app and tool is incredibly accurate generally with around a 5-10% margin for error.

That being said, think about it; If you were selling that product, you could potentially sell 1800 units per month!

I will leave you with that for the day. Definitely go through and check out some products, use the free tool and imagine the possibilities!

Forming a Mastermind

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Three heads are better than one…I believe that’s the saying, right? But seriously, it doesn’t matter where you are in the world, what line of business is involved, or the format these groups meet in, teamwork provides unparalleled results.

We believe having a discussion with someone is the single most powerful thing you can do. Sure, information is great, as well as product information – but nothing enhances the effectiveness like community. If you build a great community or group, people will take away endlessly and grow beyond their wildest imagination.

We truly realized the power of a mastermind in early 2014. We started opening up and talking to people. We shared without the expectation of receiving and things came back to us ten-fold. Nothing compares to having someone else’s perspective or insight into your business. As a business owner, we work tirelessly to improve but too often overlook the glaring issue. The real problem. Fresh eyes can often discern what we are blinded to.

This is why Masterminds work. It gives you the perspective of a team of people working towards a common goal or interest. It offers insight into your business that you might not have seen otherwise. As you can imagine, based on this article, we are a strong proponent of Masterminds. Business professionals pay tens of thousands of dollars to be in strong closed-session masterminds. I realize that some people don’t have the budget for that, so we are going to tell you how you can make your own.

First, look at the goal of your Mastermind. Is it general business growth or shared information? What we have come to realize is fully-open masterminds tend to operate the best. The ones that share information as well as contribute towards the common goal are the groups that succeed. With that in mind, we will lay out how you can do that.

Step 1: Recruitment

Look for people who fit the following criteria the closest:

  • Close in sales to you. While it may seem counterintuitive to would want someone with your sales, rather than a bigger, stronger, and faster teammate, it will provide you with a much better experience. People in the same sales range often encounter the same issues, look at deals similarly, have roughly the same budget, and have similar infrastructures. It doesn’t make sense to pair someone doing minimal sales (say $10k) with someone doing $1MM in sales because their respective businesses aren’t remotely similar. A deal that the million-dollar seller finds to be favorable may be horrible for a smaller seller because they aren’t capitalized the same. Similarly, it’s easy to rally as a group. You can look to encourage and lift the group as a whole rather than being dragged along.
  • A similar mindset and goals for growing their business. This is incredibly important, as it is hard for full-time people to work with part-time people because their goals and commitment don’t align. You are looking for people that can contribute without being a taker OR being a workhorse for the group. The group has to work together as a unit.
  • Look for diverse interests or skill sets. While it might be cute to clone myself, it is very ineffective. We (my clones and I) would look at products the same way; we would target the same types of products and would miss the same things. While awesome, we would be a poor Mastermind. Instead, you’ll want a diverse skill set among people who examine things differently. Ideally, you would focus on people who specialize in different categories or sets of products and people who review different information than you.

When you have decided on what you are looking for in a Mastermind, and have a good idea of what will make your team successful, it’s time to take to the streets and start talking to people. Ideally, you want to keep your group small. Mean and lean, as they say. These groups provide a more intimate feel, as well as generally keep more people engaged longer. A suggested MM size is between four and six people. Remember, these are people you are sharing your business with, potentially your SKUS, and most importantly your philosophies which govern your business.

Step 2: Setting up the physical Mastermind Group

  • Set up a Facebook Group (set to secret)
  • Set up shared Google docs
  • Do a live webinar-style meet (Skype/Zoom/Spree) to introduce yourselves and interact
  • Share phone numbers for texting
  • Use an App like Voxer

Once those things are in place you should start working to help each other’s business grow. Here are some objectives you should consider with your group.

Step 3: Establishing Your Objectives:

  • Don’t focus on being rules-oriented. If you set a minimum, people achieve the minimum. It’s simple human nature. If you tell me I only need to contribute 5 SKUs per week I will set out with that as my mission. If instead you focus on the promotion of the greater good, say, improvement across the board, then people are more invested in the success of their team.
  • If someone has continued weak performance or isn’t involved heavily in the group, approach them about it. Talk to them first, and develop a strategy towards resolution. Things happen, life happens If something can’t be resolved then cut them from your group and move on. Look to refill the position as necessary.
  • A team is as strong as the weakest player. Period. When you are in this setting, DON’T BE THE WEAKEST PLAYER. No one and I mean no one wants to be the dud, the last pick, or the patsy of a group. Get in there and work! Contribute to the efforts of the group and jointly grow your businesses.
  • Contribute beyond the SKU level. Look at strategy; sourcing, pricing, and seasonal strategies. Look to increase your effectiveness and jointly make your TEAM money.
  • Develop a relationship with your team. Work towards being close with each other, and learn to invest jointly in each other’s success. Don’t be the person who secretly wants to be the best, JUST to be the best. Work towards making everyone better and you will get the most out of this experience.
  • Develop team-oriented goals, and approach situations with the team in mind. As an example, look to raise the ENTIRE teams’ performance rather than your own. Make realistic goals and develop maps to get there.

As I previously mentioned, in terms of the group set up those are the mediums we use. Those mediums allow for the quickest access to information and will help everyone get the most out of their experience. Here is a quick synopsis of how you can utilize each of those mediums to help the TEAM to grow their respective businesses.

Step 4: Sharing with Your Group

  • Ask your group for feedback and be open about your situation. You will realize the more you are willing to share, the same will generally be true for everyone involved. Look for ways to improve your processes, and share when you have better methods.
  • Utilize group file storage. With our Mastermind group, we share every piece of material we use in our business (templates, contracts, agreements, etc). This is an open resource, and other members of the group reciprocate. That means collectively we have access to a MOUNTAIN of information about any topic.
  • We also utilize text messages for time-sensitive information. This is generally reserved for something that needs to happen quickly or ends quickly.

After you are at this point you may very well wonder, “What should I share with my group? How can I contribute? What gives my TEAM the best chance of success?” Basically, you aren’t limited here. You should contribute to the joint success of the team, and if it helps you, it should help your teammates.

Step 5: What to Share with Your Group

  • News articles, industry-related articles
  • Sourcing Strategies
  • Experiments You Are Testing
  • New Strategies – We love this because we get tons of awesome feedback from people we trust.
  • Purchasing / Pricing Strategy (for the sake of mentioning it – I will point out agreed-upon pricing is illegal. You should only talk about this in theoreticals and should NOT agree on prices).
  • Processing Strategies
  • Business Contacts

To summarize, setting up a Mastermind group can be both fun and rewarding. When you do this, you will have a camaraderie that is unmatched by any type of lone wolf situation. The most important thing to remember is to contribute to your team’s success. Be a part of greatness, which realistically the success of everyone involved. Beyond that, it provides HUGE accountability. Not only are you responsible for your own success, but also that of your team!

Tell us what you think… What is holding you back from setting up your Mastermind Group?

Does Amazon Owe You Money?

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Selling on Amazon has provided us with the most amazing opportunity we have encountered: It allowed us to grow and scale our business with minimal infrastructure. For example, in many cases, we have over a thousand orders a day (particularly in peak season), but only three full-time employees processing products.

In most circles of the world, this wouldn’t be possible, but with Amazon it absolutely is. Amazon FBA allows us to scale without needing lots of employees and crazy systems to do it. I say this because I want to talk about some of the amazing things Amazon has allowed us to do, and use that to transition into something you might not know about:

If you already sell on Amazon, they probably owe you money!

Amazon is an amazing platform and allows unparalleled growth and scalability, but it is not perfect. Amazon deals with MILLIONS of transactions each day, and this creates the opportunity for error. While Amazon is incredibly automated, there is still a HUGE level of human input. Human input is something that can lead to errors.

The great news is: if you know what you are looking for, Amazon will review and issue you a reimbursement. However, many people don’t know what they are looking for and these reimbursements often go unclaimed.

I want to dispel a myth regarding this — this is not intentional, and Amazon is not trying to take your money. Errors happen, and they expect that being responsible business owners we should review and create cases when it is necessary. That generally raises the question of whether this should be automated, and the answer is clearly ‘yes.’ The vast majority of these reimbursements do get applied to your account and are done so in an automated way.

However, there are instances where human errors on the Amazon side cause a fraction of these to fail to be automated. Again, this is not intentional and is just a part of doing business. You should take advantage of the fact that they allow you to review and appeal, as it can make a huge difference on your bottom line!

We recently did a video with Ryan Grant (the man behind the reimbursements book) that has literally made us thousands of dollars. This video is great and we highly recommend you watch it!

Just to give you an idea of how much money Ryan’s book has made for us (this is just from one account) from 1/1/16 – 12/31/16:

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Now, let’s talk about a few ways that Amazon may owe you money, such that you can review and get reimbursed where applicable. I’ve included time-stamped links to corresponding portions of Ryan’s video.

1) Lost or Damaged Inventory

Amazon is responsible for any inventory sent into their fulfillment centers while it is in their possession. This means if a product is lost or damaged while Amazon has it, you are able to be reimbursed for it.

I will preface with the fact that the VAST majority of these are automated and you will find reimbursements for them. That being said, depending on your volume there may be thousands of dollars in missed reimbursements that you are owed for.

For more information see video (6:38)

2) Customer Returns

Amazon has a very liberal return policy, and as Amazon sellers that extends to us as well. Basically, customers are allowed to return products for any reason. However, there are certain rules regarding returns… like the customer actually has to return the product!

You would be shocked at how many times customers initiate returns and are refunded then do not return the item. Per Amazon’s own guidelines – this is something that you can be reimbursed for. You can see this with the Returns Report.

For more information see video (10:55) & (19:45)

3) Other Customer Concessions

Amazon loves to make customers happy, so at times they will offer then an extra $20 on their refund or something of that nature. This is done at the discretion of the customer service representative and most of the time Amazon issues this money from their own account.

However, sometimes this can be issued from your account. Amazon does not have the ability to give your money away through Customer Concessions. Only you have the ability to authorize this, and therefore every time this happens, you are eligible for a reimbursement.

For more information see video (16:19)

4) Inbound Shipment Errors

The Amazon Fulfillment Centers receive thousands of shipments each day, and while it works perfectly the vast majority of the time, occasionally things get lost in the shuffle. It is very important that you monitor this and request reimbursements as they come up.

For more information see video (23:26)

5) Verifying Customer Exchanges

It is not uncommon that a customer asks to exchange an item, as opposed to a traditional return or refund. The process looks like the refund process, and should similarly be researched. When a customer exchanges an item, they have to return the original but should NOT be refunded in addition to the original return. If they are, you have an excellent case for reimbursement.

For more information see video (27:02)

6) Customer Returns that Don’t Adhere to Return Policy

Beyond having specified times in which they have to return products, Amazon also has guidelines for the type of returns and the ways customers treat them. For example, customers may not return items in the Grocery category or may not return items that have clearly been used. If they do, you are likely eligible for reimbursement.

For more information see video (29:57)

7) Warehouse/Distributor/Carrier  Damaged Units

These are all non-fulfillable inventory types. In the case of Warehouse and Carrier Damaged you should be reimbursed automatically for those types, and in the case of Distributor Damaged, many of those are cases for reimbursement. The bottom line is: you should review and file as necessary.

For more information see video (34:14)

Those are just seven of the ways you can rescue lost money. The great thing is that most of these strategies are so simple and so broken down that you can do them in minutes or even outsource them to your assistant team. Our VA team handles this and is able to create cases for these reimbursement opportunities.

Our suggestion is to check out the video here, and potentially check out Ryan’s book. This book has had the greatest ROI of any product that we have ever purchased. If you want to check out more of this information you can do so here:

https://www.onlinesellingexperiment.com/reimbursementsTWF

Hopefully, this article helped to open your eyes to some of the reimbursement possibilities that exist. Think of it this way, if you are performing profitably without utilizing these strategies, this is like picking up additional free money to further grow your profits.

Hiring A Virtual Assistant

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When it comes to hiring a virtual assistant (VA) it can be normal to feel overwhelmed at first. For those who haven’t done it, this sounds incredibly daunting. Honestly, I felt the same way at the beginning. I was under this impression for the longest time until one of the students in our course mentioned to me how amazing his VAs were doing.

He asked about our VAs and I told him we didn’t currently have any, but I was curious about what his VAs worked on for him. He actually showed me the VA worksheets that his company uses and I was floored at the level of productivity!

It was at that point I knew we simply had to have our own VAs. It was time for us to get over the hump!  We set out blindly to hire them, train them and ultimately work with them as the new members of our team. Through trial and error, we learned a lot about the hiring and training processes involved with employing someone who does not physically work with you.

I can honestly say that our VAs became an incredible part of our team. We don’t really think of them as VAs anymore, more along the lines of incredibly important and vital members of our team.  They add value to our company, they work with our team to make them more efficient and they contribute ideas daily! Our team is amazing, and hopefully, I can tell you how to identify amazing members for your team as well.

In terms of hiring, we did our hiring off of OnlineJobs.ph. We bought a membership, looked through possible applicants, and developed a list of possible candidates we wanted to interview. When it came to hiring. the things we cared about were computer proficiency, English language proficiency, and the ability to use spreadsheets.

If you notice – we did not target people who had a working knowledge of sourcing on Amazon. There are many reasons that we didn’t want to hire proficient sourcing agents, but first and foremost we didn’t want to retrain them to our metrics and to think like we do. Also, it is far less likely that they would share SKUS among other VAs for other sellers. We don’t want our VAs to work with other people. We want them to be dedicated members of our team.

Our interview process is relatively simple. We told them about our company, our growth, our goals, and our Core Values. Then, we focused on asking them things like:

  • What is your motivation for doing a great job, beyond money?
  • Do you like feedback? What type of feedback do you like about your performance?
  • Will you work American Eastern Standard time hours?
  • What do you think is the most important characteristic of any team member, and why?
  • Do you have any familiarity with Amazon.com? If yes, have you worked for someone who sells on Amazon? If yes, what did you do for them?
  • How important is the role of a team to you?
  • How do you learn the best?

We don’t focus on any skills. Recently, one of our course members said they ask them to perform a task based on their “claimed skills”, which I think is genius. It’s a short task but effectively lets you know if the VA is claiming they can do things they cannot do or are not proficient in.

All of our interviews were conducted with them over Skype at set times. Our current staff is exactly 12 hours different from our time (e.g. 6 PM here is 6 AM there).

Things we have learned about VAs, in general:

  • How much they request to be paid is NOT indicative of performance – start out cheap and give them raises or bonuses. We pay our VA’s a base rate of $1.50 per hour. After 90 days, we give all VAs a review and, if they’re staying on, a raise, normally an additional dollar an hour.
  • We also sometimes award bonuses based on performance, such as excelling at sourcing. Many of our VAs are from the Philippines, where a “13th Month” bonus is traditionally given at the end of the year.
  • Keep a record of how much you pay your VA’s – you can write this off on your taxes as paid labor (check with your CPA to see exactly how).
  • We did live training via Skype and recorded the sessions with Camtasia (you can use something cheaper like Jing, CamStudio, Screencast-O-Matic, IceCream Video, Screencastify, or Snagit). That gave us videos to reference and a working library to train new employees. Keep these training videos short (generally 4-7 minutes). You don’t want them to have to wade through a ton of material to find what they are looking for.
  • You pay your VAs via Paypal. Send it as Goods & Services, as per Paypal’s terms of service.
  • Being a part of a team really does matter to your VA. Team cohesion is also very important. If one of your VAs has a problem working with another one, they’ll be sure to let you know it.
  • Knowing that you care about them means the world and creates reciprocity. I make sure to wish our VAs happy birthday and talk to them about non-work related stuff from time to time. I cannot stress this point enough: when they do a great job – TELL THEM SO! Any employee loves to know their work is appreciated, and our VAs will take a compliment and wrap themselves up like a comfy blanket.

Our VA’s have contributed greatly to our growth and success. We have sourcing VAs and account specialist VAs. Our account specialist handles our Amazon cases, customer correspondence (through templates), deals with bad feedback, reconciles shipments, reconciles returns, tracks our inventory to make sure Amazon has not lost anything or miscounted anything after receiving among many other tasks.

This has given us additional free time to focus on the growth of business! If you don’t think you have the time or skills to adequately hire and train your own VA, there’s another option. The people at FreeUp.net have spent countless hours searching out dedicated, hardworking individuals who are then trained in a multitude of skills and to handle many tasks. They offer a wide range of services from hiring your own personal VA, to even just someone temporary to handle a specific task you’d like to outsource. They’re definitely a viable option for those of you looking to save even more time. Click this sentence to check them out!

What are some things that VA’s could do for you? Have you ever considered hiring a VA? Let us know!

Five Quick Ways to Protect Your Amazon Account

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From day one, we decided that we were going to do EVERYTHING in our power to be completely above board. It certainly was not lost on us there were opportunities that were against Amazon’s rules (which would be highly profitable) but we chose to go the other direction. We realized that our longevity was important if we wanted to create a business. It’s much easier to sleep at night when you try to do the right thing.!

In this article, I want to discuss five quick ways you can protect your Amazon account. If you are anything like us, Amazon is your livelihood! Even if you aren’t a full-time Amazon seller(yet) you probably still have a great interest in protecting the investment you have, as well as the business you are building.

In effect, Amazon wants many of the same things we want:

  • Happy Customers
  • Ethical Business Practices
  • Professional Service
  • Adherence to Standards

If you keep those simple principles in mind you can quickly understand what to do, as well as what not to do on the Amazon platform.

Here are some of the quick and easy ways to protect your Amazon Account:

1) Read the rules

One would think this could go without saying, but if you are going to be selling on the Amazon platform you should take a few minutes to read the rules, terms of service, their prep policies, and inbound policies.

I realize this is not the most exciting set of materials. However, these are the actual RULES that protect your business.

Terms of Service: https://www.amazon.com/gp/help/customer/display.html?nodeId=1161302

Policies and Agreements: https://www.amazon.com/gp/help/customer/display.html?nodeId=1161272

Those two documents encompass many of the rules for selling on Amazon. You will not be able to memorize them entirely, or maybe you will, but for most of you – it is important to read them to understand the spirit of the agreement, as well as give you a place to re-review if you are looking at a questionable situation.

2) Review Notifications

We make it a dedicated practice to constantly review notifications that we receive from Amazon. These notifications come in a variety of forms, and all should have a HIGH priority for your attention and review.

The scariest of these notifications is the “red flag” notification in your Amazon account. These can range from changes to your account, Performance Notifications, or all the way to Policy Warnings. These are essential to address with Seller Performance immediately, or at least follow along with what the notification says.

In most instances, we do suggest a follow-up email with Seller Performance at:

seller-performance@amazon.com

seller-performance-policy@amazon.com

We do this if a listing is closed due to high return rates, or if there are more serious concerns. Our goal is to be honest and open with the Seller Performance team to help them resolve any issues quickly.

Beyond that, you should similarly review and address notifications like “Change Notification” emails or “ASIN Merge” emails. Our VA team reviews all of these emails by doing the following:

Look at the changes made in the email.
Go to the listing on Amazon, review the current listing.
Verify that the changes made DO NOT change the overall product qualities.
Does your product still match the detail page? Look at all aspects, including weight and measurements… All details need to match.
If not, deactivate your listing immediately – file with Amazon via Case Creation to have the details changed back – per the manufacturer website. If the manufacturer’s website/description does not match your product, create a removal order.

Our goal is ALWAYS to sell products that match the Amazon Detail Page perfectly, so we are meticulous and react quickly to these types of emails. To make sure you are selling the correct products, and the listing has not been altered to make your product incorrect, we suggest instituting a similar review process into your own business.

3) Professionally Deal with Customers

This goes without saying, but I will say it anyway. Amazon is VERY MUCH a customer-centric company. Your goal should be to exceed well beyond the minimum expectations they set, and provide the BEST possible customer service to those people who buy your products.

You should focus on:

  1. Answering customer inquiries quickly. Our goal is less than three hours despite Amazon allowing up to 24 hours.
  2. Answering customer emails courteously and efficiently. We focus on giving very detailed answers to customers. In fact, we have saved templates that cover the most common questions we receive.
  3. Your emails should prevent issues with Amazon. If the problem is your fault, take responsibility: give a refund and don’t require return shipping. Then address the problem in your inventory if it is systemic and not isolated.

4) If it is borderline “against the rules”, err on the side of caution

This is the “common sense” rule. If you think that something could be against the rules, it is MUCH safer to assume that it is. Don’t operate in the space of “not knowing.” Be conservative, then research to see if something is or is not against the rules.

You have to understand that Amazon holds a high standard, and ignorance of the rules DOES NOT excuse you from breaking them.

Just remember this quote, as it will really help you with Amazon:

“An ounce of prevention is worth a pound of cure”.

5) Good Invoices

I would estimate the number one reason for suspension is counterfeit products/products not as described. The general reason for this is people have poor invoices. You should source from places where the invoice will stand scrutiny. Trust me, I realize that there are HUNDREDS of questionable invoice opportunities.

For example, locally we have a pallet distribution store; they break down return pallets and retail out those products for VERY low prices. In many instances, you could walk in, spend $500, and profit $1000 or more as they always have great name brand products available at awesome prices.

However, we DO NOT source from this place. We understand that if we receive a “counterfeit claim” or “item not as described” claim that our invoices will not withstand that scrutiny.

Here are the types of invoices you can get, and their relevance to Amazon in descending order:

  • Manufacturer Direct Invoice (Brand Owner)
  • Authorized Distributor Invoice
  • Online Purchase Order + Picture of Item on Website + Packing Slip
  • Retail Receipt from Big Box store with UPC
  • Liquidation with Lineage Trace
  • Retail Receipt without UPC

The issue you can have with retail, online receipts, and liquidation invoices is Amazon understands the liberal returns policy offered by retailers. Such policies can result in non-new or even counterfeit products being available in retail locations.

If you look at only the profit of a transaction and don’t calculate the risk that it brings, you aren’t building a business – only taking advantage of a profitable opportunity. Businesses are built with longevity in mind, and part of longevity is account protection and assurance you are minimizing your chances and opportunities of being suspended or having other issues.

Focus on doing things right, operating above board, and most of all exceeding the minimum standards. Part of being successful is being great. If you strive for perfection in your business and process, your growth potential is unlimited.

6 Easy Steps for Non-U.S. Residents Who Want to Sell on Amazon.com

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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 I wanted to help dispel some of the myths that might prevent you from taking action and getting started.

Here are some common questions we receive about selling on Amazon using the wholesale business model.

1) What information do American-based suppliers, brand owners, and wholesale companies need to do business with me?

If you are a resident of the US or have a US corporation, they will need a resale certificate. The purpose of the resale certificate is to demonstrate that you are a business making a business to business purchase. This allows for the purchase to be made free of sales tax (because the final customer is the one who is to pay the sales tax).

If you are NOT a resident of the US or do NOT have a corporation, this may NOT apply. Instead, you can often use your country’s documentation that you are a real business. Of course, this means you must be incorporated as a business in some capacity in your home country.

2) What do I need to create an Amazon account in the US if I am not a US citizen?

To sign up for an Amazon account, you will need the following:

A) A credit card that can be charged internationally (typically Visa or Mastercard are perfect).

B) 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 potentially save money on currency transfers. Two companies that make it very easy for foreigners to create US bank accounts are

Payoneer.com
Worldfirst.com

C) Your local address.

D) A phone number (with your international prefix). As an alternative, we suggest setting up a US-based phone number through a service like Skype or Google Voice.

E) A US Employer Identification Number(EIN).

An employer identification number (EIN) is a unique number assigned to businesses in the U.S. in order to identify them. You don’t have to be a US corporation or of any legal status in relation to the US to get this number.

To obtain an EIN as a non-US resident, follow these steps

Step 1 – Call the IRS (Internal Revenue Service) at 267-941-1099 (not a toll-free number), 6:00 a.m. to 11:00 p.m. (Eastern US time), Monday through Friday, to obtain an EIN.

Step 2 – On the call, be prepared to provide the information to the best of your ability that is found on this form
https://www.irs.gov/pub/irs-pdf/fss4.pdf

3) What do I need to do to be in compliance with US taxes/laws?

Disclaimer: We are not a tax professional, and this is not professional tax advice

An American tax professional instructed us that you should not worry about getting compliant with US tax laws as an international seller until you doing at least $300,000 in sales per year. But you should do your own research on the subject.

When that time comes OR you would like more info on officially forming your business and establishing it officially in the US as to become compliant with US tax laws, then you must work with a US-based tax professional.

Here are a couple online based tax professional agencies
https://www.apriocloud.com/

https://www.salestaxandmore.com/

4) How will I store and ship my inventory?

Now that you are set up, the next challenge is actually storing and shipping your inventory.

We handle all of our 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 Fulfillment center.

Many suppliers will ship direct to Amazon, and this can be considered as an option. If the item has “prep required”, we generally suggest 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 ensure its safety for Amazon, and then the journey to the customer.

Some recommendations are PrimeZeroPrep.com and PrepitPackitShipit.com

These companies have very detailed onboarding processes, and can get you set up with ease in minutes!

5) What happens if I get returns?

Now…

We are selling, and are hopefully doing really well. That being said, there is one last complication we have to tackle: returns.

Returns are certainly a part of business. In fact, they 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.

You can:

A) Contact US-based charities to see if they may be interested in receiving your returns (we donate a good portion of our returns because it is easier and we 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 organizations will receive shipments. I would talk to a CPA in your country to see how that can be handled with your personal taxes.

B) 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 come as a loss against money you had made.

C) You can have the items shipped to a returns center and processed/sold. Here is one of those services (we have not personally used this service, but have heard good things from other people – please check it out and see if it is right for you):

– gogambit.com

6) Have you had international students be successful?

Absolutely! All kinds and from every corner of the world! Check out this podcast by one of them. His name is Chris Thomas and his podcast is called “The Australian Seller.”

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 being an entrepreneur.

Please bear in mind that we are neither attorneys nor CPAs, and this should not be construed in any way as professional advice. We ALWAYS suggest that you verify and discuss any information with your own legal or tax professional.

Hopefully this helped put in perspective what you need to do to get started!