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What you need to know about selling on Amazon

In the realm of eCommerce, Amazon reigns supreme as a juggernaut of online retail, offering unparalleled opportunities for sellers to tap into a vast customer base. Whether you’re an aspiring entrepreneur or a seasoned seller, navigating the intricacies of Amazon’s platform is key to maximising your potential and profitability. In this detailed guide tailored to the UK market, we’ll explore everything you need to know about selling on Amazon, from registration and fees to tax obligations and optimising your selling strategy.

Do I Have to Pay to Sell Things on Amazon?

Indeed, selling on Amazon entails certain fees, but the structure varies based on the chosen selling plan:

  1. Individual Plan: There’s no subscription fee, but a charge of 75p per item sold applies.
  2. Professional Plan: For a flat subscription fee of £25 per month, sellers can list unlimited items.

Selecting the appropriate plan hinges on your anticipated sales volume and business objectives.

Understanding Amazon Seller Fees:

In addition to subscription fees, Amazon imposes referral fees and closing fees:

  1. Referral Fees: These vary depending on product categories and the marketplace. Amazon provides a comprehensive breakdown of referral fees on its website.
  2. Closing Fees: A supplementary charge of 50p per item is applicable for media products such as books, DVDs, and video games.

Acquainting yourself with Amazon’s referral and closing fees is essential for accurately calculating your selling costs and optimising profitability.

Do I Have to Register as a Business to Sell on Amazon?

Although registration as a business isn’t obligatory, you may need to register for tax purposes depending on your earnings. Amazon mandates certain information during the registration process, irrespective of your business status.

Understanding Tax Obligations for Amazon Sellers in the UK:

Tax obligations for Amazon sellers in the UK are influenced by various factors, including the trading allowance and Digital Platform Reporting Rules:

  1. Trading Allowance: Individuals can earn up to £1,000 of miscellaneous income per tax year without reporting it to HM Revenue & Customs (HMRC). However, exceeding this threshold necessitates tax reporting.
  2. Digital Platform Reporting Rules: Amazon may share seller information with HMRC if certain thresholds are surpassed, such as making more than 30 sales or earning more than €2,000 in a year.

Adhering to tax regulations is imperative to evade penalties and uphold financial compliance.

Can I Claim Amazon Seller Fees as Expenses?

Absolutely. As a self-employed Amazon seller in the UK, you’re entitled to claim tax relief on allowable expenses, including:

  1. Marketing Costs
  2. Shipping Charges
  3. Transaction Fees
  4. Photography Equipment
  5. Software Subscriptions

Collaborating with an accountant like eAccounts can facilitate the identification of additional allowable expenses and optimise tax deductions, ultimately enhancing your profitability.

Conclusion:

Selling on Amazon presents unparalleled opportunities for entrepreneurs to showcase their products and expand their market presence. By comprehensively understanding Amazon’s platform dynamics, including registration, fees, tax obligations, and expense management, you can position yourself for success in the competitive eCommerce landscape of the UK. Remain abreast of Amazon’s policies and regulations, leverage available resources, and continually refine your selling strategy to unlock the full potential of the platform as a lucrative sales channel for your business. With diligence and strategic foresight, you can harness the power of Amazon to propel your business to new heights of success in the UK marketplace.

For more information, please get in touch today! Click one of the buttons below to either ‘Get a Quote’ for your business OR ‘Book a Meeting’ with one of our experts!

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