The Amazon phenomenon is a trendsetter in the e-commerce industry. The most important market is Amazon.com, which represents 45% of total visits from all Amazon marketplaces. But how to solve shipping from the EU to the US, CLO, excise duty and other related requirements?
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Amazon: The E-commerce Trendsetter
Amazon stands as the undisputed leader in the e-commerce sector, recognized as the most prominent marketplace globally. Its extensive catalog spans nearly every product category, from electronics, apparel, and cosmetics to groceries, furniture, and home goods. Beyond products, Amazon offers a wide array of services, including unlimited access to streaming content.
Amazon’s Global Dominance
Did you know that Amazon USA started as an online bookstore in 1994? Since then, it has gradually expanded into new markets, becoming a true e-commerce trendsetter.
Amazon currently operates in 22 markets, with the bulk of its business concentrated in four major ones: the USA, Germany, the UK, and Japan. Amazon is incredibly dominant and preferred in these regions, accounting for 70-80% of its total sales.
No one currently rivals Amazon’s scale, and that’s unlikely to change. While local champions may emerge and succeed, no single entity has managed, or is likely to manage, to replicate Amazon’s success across so many diverse markets.
Key Competitors
Among Amazon’s most significant local competitors in the USA are eBay and Walmart. Globally, other players include AliExpress, Cdiscount, Argos, and Facebook Marketplace, among others.
Consumer awareness surveys in the USA reveal Amazon’s strong presence: 92% of consumers are familiar with Amazon, compared to 72% for Walmart and 69% for eBay.
Amazon.com: The Most Crucial Market
Amazon.com in the USA remains the most significant market, generating 45% of total visits across all its marketplaces. The next three largest — Japan, Germany, and the UK — each account for roughly 10%. The top five markets combined (USA, Japan, Germany, UK, and India) make up nearly 77% of visits.
Another interesting fact is that approximately 25% of all sales made through Amazon.com are delivered outside the USA. This indicates that the .com domain functions as a global platform, not just one for the US.
Amazon Prime: A Universal Shopping Tool
Amazon Prime dominates US e-commerce. This paid service offers numerous benefits to US customers. Currently, about 157 million users subscribe to Prime, with most located in America.
For sellers on Amazon, being part of the Prime program is crucial, both for fast order delivery to customers and for products to appear as “Prime” in search results on the platform.
If your product is listed as Prime, there’s a much higher chance of selling it. The program can significantly boost your product’s visibility and customer loyalty.
It’s often said that Amazon holds the key to every other door. It can deliver orders to 4 out of 5 US households and every second household in Germany or Austria.
Only 1 in 10 Online Shoppers Hasn’t Ordered from Amazon Yet
Amazon boasts a vast customer base of over 400 million customers worldwide. On average, more than 66% of consumers now start their online shopping journeys on Amazon.
Consumer purchasing data confirms the marketplace’s popularity. On average, up to 89% of participants have previously made a purchase on Amazon.
As Mirek Severa from A Spirit, an EXPANDO client, puts it when discussing Amazon sales: “The most important thing is that you gain access to customers who would otherwise be difficult to reach, and you benefit from the advantages of a large marketplace brand. The difference is like casting a fishing line into a village pond versus fishing from a luxury yacht. There are many more fish, and importantly, there are more varieties! In our case, there are noticeable differences not only between what we sell domestically and in individual marketplaces but also significant differences among the marketplaces themselves. It often happens that we successfully sell something abroad that doesn’t do well here, and vice versa, of course.”
US Customers Spend the Most
On average, 52% of all Amazon shoppers spend over €100 weekly, with 23% spending over €200. Compared to monthly averages, 18% of shoppers spend over €100, and 4% spend over €200.
US customers are the biggest spenders on the platform: 18% of them spend $200 per month on Amazon (compared to only 4% of Italian and 5% of Spanish Amazon shoppers).
Shipping Orders from the EU to the USA: Rules and Considerations
If you plan to ship goods from the EU to the USA, you need to consider several factors that will impact the cost and delivery time. These include:
- Import Permits: Confirm if your specific product is allowed for import into the USA. Some items may be restricted or prohibited due to safety, health, or trade regulations.
- Shipping Costs: These can be high, especially for larger or heavier items. Air freight is often costly, while sea freight can take longer.
- Delivery Speed: Choose between express or standard delivery options.
- Customs Requirements and Fees: Depending on the type of goods, customs duties, taxes, or additional fees may apply, and other customs requirements might need to be fulfilled.
EXPANDO, in cooperation with the international logistics company DHL (Dalsey, Hillblom and Lynn), can significantly simplify the entire shipping process. DHL offers international freight services, including deliveries from Europe to the USA. If you order goods from Europe and want them delivered to the USA via DHL, you can use several different services, such as:
- DHL Express: This is an express shipping service that allows goods to be delivered from Europe to the USA within a few days. This service includes tracking, insurance, customs clearance, and door-to-door delivery.
- DHL Global Forwarding: Specializes in international sea and air freight, which can be suitable for larger orders and goods that don’t require express delivery. This service includes planning and organizing the entire shipment from the origin in Europe to delivery in the USA.
- DHL eCommerce: Designed for smaller shipments and goods sold online. This service enables shipping from Europe to the USA at a lower cost and includes tracking and delivery to designated locations, such as post offices or parcel lockers.
FBM & FBA: Fulfillment Options
FBM stands for “Fulfillment by Merchant.” This means that the seller on a platform like Amazon fulfills orders and ships goods directly from their own warehouse or other storage facilities. This sales model is an alternative to “Fulfillment by Amazon” (FBA), where Amazon stores and fulfills orders on behalf of the seller.
In the FBM model, the seller manages their own inventory, packs and ships orders, and handles customer support. Sellers can use FBM to offer their goods on Amazon without having to use Amazon’s storage and fulfillment services and associated fees.
Customs Duties with FBM (Fulfillment by Merchant)
Currently, customs duties are levied on some goods imported from the EU to the USA. Different types of goods have varying duty rates, determined by the Harmonized System (HS) of product description and coding and other factors like the country of origin and destination of the goods.
For importing goods from the EU to the USA, specific documents are required, including an invoice, a cover letter, and a Certificate of Origin, which proves the goods originate from the EU. The commercial invoice must have a complete and accurate description of the goods being shipped—a detailed product description, individual item names, marking of individual parts of the shipment, quantity and weight of goods, prices, shipping-related costs (packaging, discounts, rebates), destination, delivery terms, names of buyers, sellers, and carriers, etc.
If you sell and ship individual packages from the EU to customers in the USA, customs duty is typically not paid if the shipment’s value does not exceed $800. This means that if your shipments to the USA are valued under $800, customers usually don’t have to pay customs duties upon delivery.
Sales Tax with FBM (Fulfillment by Merchant)
When selling and shipping goods from the EU to customers in the USA, you need to be aware of “sales tax.” Sales tax is a tax on the sale of goods or services paid by customers in some countries. This tax is usually added to the price of the goods or service and then remitted to the state authority. It can vary depending on specific jurisdictions and can be set at different levels (state, local, etc.). In some US states, sales tax is not paid at all, while in others, it can be up to 10%. It’s important to note that the seller is responsible for paying sales tax, not the customer.
Amazon automatically remits “sales tax” for sellers; the customer pays it. When selling on this platform, you don’t need to worry about a Tax ID.
Amazon automatically increases the order value by the “sales tax,” but this doesn’t affect the seller’s pricing. Also, there’s no VAT in the USA, so sellers can offer goods cheaper with the same margin.
Selling on Amazon with EXPANDO
EXPANDO helps e-shops expand globally. Through its proprietary software, EXPANDO APP, and other specialized e-commerce services, EXPANDO can fully automate and streamline the entire expansion and sales process.
“At EXPANDO, we handle integrations between marketplaces, e-shops, and accounting systems. We are also a team of experts who have generated the highest revenue from new sellers on Amazon across Europe. Simply put, new sellers achieve the fastest turnovers on Amazon through EXPANDO,” emphasizes David Cikánek, Head of Sales, regarding their collaboration with Amazon.
Amazon’s catalog boasts over 1 billion listed products, which you can easily link to using the EXPANDO APP. Selling costs are minimal compared to expanding through a foreign e-shop. Moreover, launching sales is quick, and you can manage everything conveniently from the Czech Republic.
In 2022, we generated over €48,000 in GMV and facilitated more than 820,000 orders for our clients.
Our AUTOPRICER, which dynamically adjusts product prices based on competitor behavior, generated an additional €10.3 million in revenue for our 155 clients.
“As the global market continues to open up, even smaller EU sellers have the opportunity to succeed on the largest marketplace. Thanks to express delivery via DHL and favorable tax conditions, our sellers are performing better year after year in this market,” says Jakub Petřek, Account Manager at EXPANDO.
Conclusion
Operating on Amazon.com offers EU sellers access to a new market with a massive customer base and the potential to maximize their e-shop’s sales. However, you must consider not only the numerous advantages but also the disadvantages, such as associated costs. Therefore, it’s crucial to carefully weigh all factors and find the optimal solution for your e-shop.
