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E-commerce: how to start selling on Amazon?
Amazon is the world's largest and most recognisable sales platform. It has operated in the United States for 30 years, while the American giant has had logistics centres in Poland since 2014. In the first quarter of 2021, amazon.pl was launched, opening the way for Polish businesses to trade internationally. How do you become an Amazon seller, and what accounting obligations come with selling on this platform?
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How do you register a shop on Amazon?
Any seller can register an Amazon account, from the most recognisable brands to beginners. Small and medium-sized firms account for more than 50% of products sold on the platform, while Amazon has hundreds of millions of active customer accounts worldwide (in the United States alone, 195 million people visit Amazon monthly). No wonder more and more Polish e-commerce companies choose to sell through Amazon, often alongside Allegro or their own online shop.
To start selling on Amazon, you can use an existing customer account or create a new seller account with a company email address (we recommend the latter). Private individuals cannot sell on Amazon, so first you must establish a sole proprietorship, limited liability company or another form of business.
How do you create a seller account, step by step?
Seller account registration takes place in Seller Central. This seller hub is used to conduct sales, manage the account, add product information, update inventory and manage payments.
Step 1: Choose a plan: ● Individual (standard) plan: for companies intending to sell fewer than 40 items monthly that do not need advanced tools or sales programmes (cost: PLN 4 per item sold); ● Professional (premium) plan: for businesses planning to sell more than 40 items monthly and wanting access to APIs and additional sales reports (cost: PLN 165.91 per month).
Step 2: Open the registration form and create a seller account, entering your first and last name, company email and password. Prepare the following for registration: ● company email address, ● valid credit card (international cards are accepted), ● valid passport or identity card, ● company registration details (if possible with an EU VAT number, the international counterpart of NIP; a VAT number can be obtained by submitting a VAT-R form to the tax office), ● telephone number, ● bank account number. You will then be asked to verify your email address and telephone number (by SMS or phone) and provide key details such as the company's country and legal name, registration information and primary contact person. Additional documents, such as a business licence or bank statement, may be needed to complete identity verification.
Step 3: Add a valid credit card (debit and prepaid cards are not accepted) for verification. After registration, you can change or add another bank account for settlements.
Step 4: Enter a unique name for your Amazon shop; it need not match the company name. Amazon customers will see it.
Step 5: To finish registration, click the START LISTING YOUR PRODUCTS button.
How do you list your first product on Amazon?
To sell on Amazon, you must first create a product listing. You can attach your offer to an existing one (if another seller sells the same product) or create a new one. How you add products depends on your sales plan: on the professional plan, for example, you can list products in bulk through a batch upload, whereas on the individual plan each product must be added separately.
Most products need a GTIN (Global Trade Item Number), such as UPC, EAN, JAN or ISBN. This unique identification code contains 12–14 digits and allows the product page to display detailed information. If your product has no such number, you can request a GTIN exemption.
Each offer must also contain:
● SKU (Stock Keeping Unit): an inventory code that helps sellers identify products in stock; ● product title: up to 200 characters, with each word capitalised; ● images: 500 × 500 or 1,000 × 1,000 pixels; ● variants: for example, colours and sizes (optional); ● description and bullet points: short descriptive sentences covering the principal features and benefits
● search terms and keywords: increase the chance of a customer finding the product.
How much does it cost to sell on Amazon?
Sales fees depend primarily on the plan and the types of items sold:
● subscription fees: the individual plan costs PLN 4 per product sold, and the professional plan costs PLN 165.91 per month; ● selling fees: charged on sold items and include a referral commission (a percentage of the total selling price varies by product category) and variable costs (only in multimedia product categories); ● shipping fees: if you fulfil orders yourself, the selling commission also applies to shipping, with fees calculated by product category and the buyer's chosen shipping service; ● FBA fees: apply to products Amazon delivers on your behalf (Fulfilment by Amazon) and include fulfilment, storage and optional service fees.
Amazon and accounting: how do you choose an accounting partner?
Selling on Amazon is international trade, which creates additional duties for sellers. It is worth seeking the support of an experienced accounting firm specialising in e-commerce accounting.
If you sell goods in any EU country, you will probably have to register as a VAT taxpayer in each country where you sell. However, on 1 July 2021, VAT OSS was extended to intra-Community distance sales of goods (WSTO), enabling simplified settlement of VAT on online sales owed in various EU countries. VAT taxpayers exceeding the annual sales limit (EUR 10,000) must register for VAT in every EU country to which they sell, or use VAT OSS, which allows them to settle the tax solely in their country of business registration.
An e-commerce accounting firm provides:
● support and advice on taxes, settlements and dealing with authorities; ● help with formalities such as creating an Amazon account, VAT requirements, payment gateways and complaints; ● integration with the accounting system for easy access to information, reports, summaries, inventory levels, settlements and payroll; ● integration with e-commerce platforms, bringing all data into one tool accessible around the clock; ● ability to list products on several platforms: TaxCoach also handles Amazon, eBay and many other marketplaces.
If this article interested you, explore our e-commerce accounting services and see how we can help:
Summary
Every Amazon seller is responsible for complying with
VAT regulations. If you are unsure of your
obligations, use the support of TaxCoach accounting firm. We offer comprehensive
VAT registration services, tax support for Amazon sales
and monitoring of tax matters to identify VAT overpayments or
underpayments. We specialise in e-commerce
accounting, supporting Amazon sellers and businesses
selling on Allegro, eBay or their own online shops.
Contact us to ask about our e-commerce offer.
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