Tuesday 31 January 2017
4 Hour Work Week - Tips To Make It Highly Possible
4 Hour Work Week is something that many people want, but very few know how to get. I am here to share with you my tips to make the 4 hour work week highly possible no matter who you are and how much experience you have.
US Sales Tax for European Online Sellers: The Essential Guide
By Emma Scotton
Ecommerce is booming and businesses are increasingly fighting for a share of the lucrative global market by looking at ways to take their online business cross-border.
The US market makes for a particularly attractive option, with US consumers expected to spend $327 billion online in 2016. Moreover, the number of web shoppers in the US is expected to grow by 15% this year to 192 million and each shopper will be spending more on average, up 44% from 2012 to $1,738 per year.
What’s more for marketplace sellers is that global marketplaces are expected to own nearly 40% of the online retail market by 2020, providing a viable and rewarding route to new markets for businesses of all sizes.
In the rush to expand, however, merchants can overlook areas of international business that are unfamiliar. Ensuring you support international payments and have a logistics network capable of fulfilling orders is important, but with new opportunities come new complexities, particularly when meeting the challenge of sales tax compliance in the United States.
Businesses in Europe are used to dealing with transactional taxes in the form of VAT, but US sales tax is a different prospect entirely.
With over 12,000 taxing jurisdictions throughout the US, each empowered to alter rates and rules with little oversight, the complexity for companies trading in the US becomes mind-boggling. There are 100,000+ rules and boundary changes annually, so it’s easy to see why many companies require outside expertise to manage what initially seems like a straightforward process.
On which items do you charge sales tax? What rate of sales tax do you need to charge for different addresses on the same street? What is the difference between state, county, city and special taxes? Where do you need to file and remit sales tax? What records need to be kept in case of audit? How often do you file taxes and to which authority? And what on earth is nexus?
These are just some of the questions merchants will need to consider before either selling or planning to sell in the US. It’s a veritable minefield of legislation, regulation and complexity but if you get it right the rewards for your business could be sizeable.
What is sales tax?
As revenue from property taxes collapsed during the Great Depression in the 1930s, US states implemented transactional taxes on commodities. As an indirect tax (a tax levied on goods and services), sales tax requires the seller to collect funds from the consumer at the point of purchase.
Today, there are over 12,000 state, county and city jurisdictions in the US charging a sales tax. Forty-five states and the District of Columbia now impose a sales tax on retail sales and some services. The bulk of their revenue is now generated from sales taxes, not income taxes.
The five states that do not have a state-wide general sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon, although Alaska and Montana do allow localities to charge local sales taxes.
How does sales tax differ from Value Added Tax (VAT)?
Many European businesses are familiar with VAT and may assume that they can apply current processes to US sales tax. However, VAT is applied every time value is added at each stage during the supply chain, whereas sales tax is collected only at the time of the final sale.
If a seller has nexus in a state (more on that below) they must collect sales tax on all taxable sales to customers in that state, regardless of the channel.
Just how complex is sales tax?
Depending on the state in which your customer is based, different items may be taxed at different rates. In some states, for example, food is not taxed, while in others the same item may be classified differently. So far so good.
In New York, clothing and footwear costing less than $110 per item/pair is exempt from state sales tax, yet it is still subject to local sales tax in some jurisdictions. Local jurisdictions can change their tax policy towards clothing once a year, however, “most fabric, thread, yarn, buttons, snaps, hooks, zippers and similar items that become a physical component of clothing” or are used to repair it are exempt.
To be compliant, a retailer needs to know the correct classification of an item in each state to ensure it collects and remits the correct level of tax. Collecting too much in one state will make them uncompetitive, while not collecting enough increases their exposure to potential fines. Adding to the complexity, in some states the rates can vary by city, county, or even street. Two adjacent properties can have different tax rates.
What is the risk if you’re not compliant with sales tax regulations?
In an effort to safeguard tax revenues, each state conducts audits of businesses, which may result in penalties and interest. Businesses must keep records of sales in each US city, county and state in which they sell. California alone announced in August 2014 the hiring of 100 auditors, lawyers and specialists to help collect online sales tax.
As more businesses sell in the US, auditors are also turning to international sellers to ensure they do not have a competitive advantage over domestic retailers. The financial importance of collecting sales tax on a state cannot be underestimated. The more auditors assessing international businesses, the more revenue a state can make in penalties and unpaid tax.
With the average audit costing as much as €79,000 (US $100,000) you can’t afford to be complacent about compliance.
What is nexus?
The good news is international businesses selling in the US are not required to collect sales tax in a state unless they have “nexus”.
Nexus is defined as a connection or business presence in a state or jurisdiction. If you have nexus in a state, you need to collect and remit sales tax according to their regulations.
How do you determine if you have nexus?
On the face of it, for a marketplace seller, it sounds like you need not be concerned with Sales Tax. However, here comes the bad news. Activities leading to having nexus vary per state and can include activities such as opening offices, stores or franchises, storing items in warehouses or even attending meetings or tradeshows.
Determining nexus can be confusing if you are unprepared or do not fully understand the obligations. This will ultimately increase your business’ exposure during potential sales tax audits.
Once you have determined where nexus exists for your business, you are required to calculate, collect, report and remit that state’s sales tax. There are several scenarios where nexus can be applied to marketplace sellers giving you a “significant physical presence”, and these should also be considered before you start selling to US consumers.
What constitutes a “significant physical presence”?
Nexus rules are established by individual states and every state defines them uniquely.
Determining exactly how a rule applies to a business is critical. With more than 12,000 sales tax jurisdictions across North America, and with rates and boundaries constantly changing, staying on top of nexus responsibilities is a substantial drain on businesses, carrying no benefit to the bottom line.
Recently, in an effort to avoid losing taxes, many states have enacted Amazon laws, requiring more national and international online retailers to collect sales tax for the first time. These laws expanded definitions of nexus to include online-specific relationships such as affiliate and web advertising.
As a marketplace seller, you will need to consider closely the ways in which you manage your fulfillment as a number of scenarios here may trigger nexus.
Nexus triggers
The following scenarios are some of the more common situations in which marketplace sellers can trigger nexus.
Owning or leasing property or warehouses in the US
To better serve US consumers, and for cost-effective delivery, many marketplace sellers opt to store inventory in the US itself. Whether you decide to own or lease property in the US for this purpose, or you decide to rent or own storage or warehousing facilities, this will be considered a nexus-triggering activity. You will therefore be required to register, collect and remit Sales Tax for sales in the state in which your property, storage or warehouses are located.
Using a third party fulfillment provider with a presence in the US
Similarly, some marketplace sellers may decide to outsource elements of their supply-chain to a third-party, who will store and deliver goods to customers on their behalf. This method of fulfillment can prove cost-effective for businesses and enable you to get goods to your US customers much quicker. However, even if you outsource to a third party, and it is the third party who owns the warehouse and delivers your goods in the US, this can still trigger nexus.
Let’s take Fulfillment by Amazon (FBA) as an example. FBA helps sellers sell products internationally by giving you access to Amazon’s logistics network. If you ship your products to their fulfillment centers, they’ll store, pick, pack and ship it locally to your customers.
Whilst the definition of nexus varies slightly from state to state, all states where Amazon has warehouses (with the exception of Virginia) say the same thing, namely that this suffices for the creation of nexus. For example, Kansas regulations state that “stocking inventory in a Kansas warehouse or consignment” triggers nexus. Similarly, Washington regulations state that where “the goods are located in Washington at the time of sale and the goods are received by the customer or its agent in this state” nexus will be triggered.
Amazon won’t always notify you if they move your inventory to a new fulfillment centre. So a conservative approach is to register for Sales Tax in all the states where Amazon has a fulfillment centre to avoid getting caught out. It should also be noted that once you have nexus in a state you must collect tax on all sales into that state whether or not you ship them yourself or through a third party.
Drop-shipping methods
Many retailers and marketplace sellers utilize drop-shipping as a supply-chain management technique. In this scenario, the retailer does not keep the goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer or a wholesaler who then ships the goods directly to the customer. This triangular situation adds a layer of complexity when it comes to determining nexus.
If both you as the retailer and your drop-shipper are situated outside of the US, and thus have no nexus in the state of your US customer, it will be the customer who is subject to “use” tax.
But if your drop-shipper is located in, or has nexus in, the state in which the sale occurs, then the drop-shipper could be responsible for collecting sales tax. That said, the rules vary again across different states, and in certain circumstances use of an in-state drop-shipper by an out-of-state retailer is a nexus-creating relationship, and it will be the seller who will be responsible for collecting the sales tax. In other states de minimis thresholds apply, whereby nexus is triggered only once the retailer or the drop-shipper have shipped $50,000+ worth of goods.
With this degree of complexity, sellers must ensure they plan ahead. All members of the supply-chain must cooperate to determine nexus to avoid either double-charging for sales tax or not charging at all.
Determining nexus
To safely navigate these challenging tax rules, businesses should understand their exposure as part of a nexus study. Making the nexus determination on your own is difficult, confusing and can lead to problems further down the road.
Other sales tax rules
This complexity doesn’t end at nexus! Sales tax compliance is full of complicated rules and nexus is just one aspect. Several other layers must also be considered in order to be fully compliant.
Some bizarre but very real sales tax laws:
In New York, any bagel that has been sliced or prepared with toppings is subject to a sales tax. However, if it is sold whole and consumed outside of the store, it is untaxed.
Alabama charges a 10-cent tax on any pack of cards that contains 54 or fewer cards in the deck. The seller must also pay $1 and an annual tax of $3.
Pennsylvania taxes air – at least the air that comes out of a compressed air vending machine or vacuuming vending machine. Therefore, petrol stations must charge the tax when customers pump up their tyres. Also in Pennsylvania, state and US flags are not subject to tax, but if either is sold with “accessories” (i.e. a pole), the entire purchase becomes taxable.
In New Jersey, naturally carbonated water is exempt, but artificially carbonated water is taxable.
And finally… in Tennessee, the sale of a good is subject not only to the state sales tax of 7%, but the local sales tax on the first $1,600, plus an additional state sales tax of 2.75% on the second $1,600, all of which cannot exceed $3,200 – potentially subjecting a sale to a 9.75% sales tax rate.
Top points to consider before selling into the US
1. Keep up to date with each state’s tax requirements
Businesses need to keep up to speed on all the changes made by states and municipalities each year. These changes include rate increases/decreases as well as new sales taxes added to jurisdictions, and boundary changes.
2. Establish processes for water-tight record keeping
The best way to stay compliant is to keep up to date on filing sales tax returns and payments (quarterly or monthly, depending on the state’s requirements) and keep accurate and detailed sales records.
What records do businesses need to keep?
Sales invoices
Paid bills
Contracts
Purchase orders
Register tapes
Bank statements
Cancelled cheques and similar original documents
Depreciation schedules and other fixed asset records
Documents supporting tax-exempt sales, such as resale and other exemption
Certificates
Freight bills indicating shipments to addresses across states
Keeping records and preparing and filing sales tax returns can be a major headache, particularly for small businesses. The good news is there are tools available that automate these processes, reduce this tedious and labour-intensive task, and save you money in the long run.
3. Understand your nexus requirements
As outlined above, nexus-triggering events can be complicated and vary across states and product types. The way in which you deliver the goods sold to US customers will have implications for your tax obligations. Using any third party, whether it’s a drop-shipper, carrier or warehouse can trigger nexus for your business, so consulting with experts will be critical.
4. Plan to use geo-location over ZIP codes
While the US Postal Service has established ZIP codes for mail delivery, tax jurisdictions do not generally follow ZIP codes. Going down to street level is essential to get it right. Businesses relying solely on ZIP code often find big discrepancies during audits.
In order to help businesses cope with these differences, providers of automated solutions continually research the physical boundaries of taxing jurisdictions nationwide. Without the use of geospatial technology, there is limited chance of accurately determining which jurisdiction applies to a transaction.
5. Set out your returns filing and remittance schedule
Each US state has its own set of rules and regulations for filing and remitting tax, which may differ from other states. In addition to state rules, cities and counties may impose and manage sales tax returns on their own.
Responsibility lies with businesses to not only determine if they have to file with specific cities and counties, but also to register of their own accord. Moreover, filing frequencies vary by jurisdiction so not all returns are due on the same day of the month. When dealing with multiple states and local jurisdictions, the number of due dates and filing schedules that must be managed can be daunting.
Filing methods can vary just as much, even within the same state or municipality. Some states now require sales tax returns to be filed electronically; others still require hard copy submission, while a few states offer online filing along with an electronic data interchange (EDI) option.
6. Collect and store all exemption certificates
Not everyone is required to pay sales tax. Depending on the rules in the taxing jurisdiction, certain businesses and individuals may be exempt. The vendor must collect and keep on file a valid exemption certificate for each business, organization or individual with an exemption.
It is also up to vendors to ensure that exemption certificates are valid for each sale transaction. This requires businesses to keep a copy of each exemption certificate and ensure that they are renewed when they expire.
7. Identify if the “Streamlined Sales & Use Tax Agreement” is right for you
Around half of the states have worked together on an agreement called the Streamlined Sales and Use Tax Agreement, designed to “simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance.” Signing up to SST requires only one form to register across all SST states. Once registered, businesses then have to file returns every month in all SST states.
For companies selling, or looking to sell in the US, or have affiliate relationships in a number of states, registering as an SST volunteer can save you a lot of time, effort and money. There is no cost for registration and if you qualify, filing is a free service across the SST states. SST volunteers have limited audit exposure (no negative audits are possible).
As of early 2015, SST Member States include:
Arkansas
Georgia
Indiana
Iowa
Kansas
Kentucky
Michigan
Minnesota
Nebraska
Nevada
New Jersey
North Carolina
North Dakota
Oklahoma
Ohio
Rhode Island
South Dakota
Utah
Vermont
Washington
West Virginia
Wisconsin
Wyoming
8. Plan for sales tax holidays
Further complicating the matter, dozens of states also declare sales tax holidays. Some states offer tax reprieves for products like school supplies for kids, while others give consumers a tax break on hurricane preparedness items, like plywood and nails. In states where hunting is a big business, tax holidays might be in place for firearms, ammunition and hunting supplies.
The holidays are varied and complicated, often taking place over specified dates and limiting the number of items that can be purchased tax-free.
In Virginia, for example, during the sales tax holiday for clothing and school supplies, many items are singled out as exempt. For clothing, this includes clerical vestments, choir and alter clothing, corsets, girdles, lingerie, purchased costumes, steel-toed shoes, suspenders, formal wear, etc. However, protective gloves, hard hats and helmets are taxable. School supplies that are exempt include calculators, binders, erasers, lunch boxes, highlighters, notebooks, paintbrushes, scissors, etc.
Keeping up to date with these tax holidays may seem burdensome, but could actually prove part of a rewarding marketing strategy and help you to take advantage of peak selling times.
Steps to successful market-entry in the US
International trade is a great way to grow your business, so don’t be put off by the complexities of sales tax. Expansion need not be daunting and provided you take the right steps, selling your products in American markets could be the boost your business needs.
Work out where your business has nexus, so you know in which states you’ll need to register by declaring your business.
Get your ID number by setting up an account with a state, and visit their local “.gov” website to determine the exact steps. Usually they will have you file a form and register.
Once that is complete, you will have a unique code applied to your business and this code will show up along with your business name in all future sales tax filings.
As soon as you have completed your paperwork, make sure to check that same regulatory department for up-to-date rates, tables, rules, and boundaries.
Research the taxability of your items, making sure to apply thresholds and tax holidays if they apply in the state.
Make sure that you only have to file one sales tax form in one state, as many states require remittance to local jurisdictions (which can number in the hundreds), as well as the state.
Alternatively, there are a number of solutions available to merchants to help automate and take the administrative burden out of US sales tax. You can speak to the KnowGlobal team to find out more.
(SOURCE)
By Emma Scotton
Ecommerce is booming and businesses are increasingly fighting for a share of the lucrative global market by looking at ways to take their online business cross-border.
The US market makes for a particularly attractive option, with US consumers expected to spend $327 billion online in 2016. Moreover, the number of web shoppers in the US is expected to grow by 15% this year to 192 million and each shopper will be spending more on average, up 44% from 2012 to $1,738 per year.
What’s more for marketplace sellers is that global marketplaces are expected to own nearly 40% of the online retail market by 2020, providing a viable and rewarding route to new markets for businesses of all sizes.
In the rush to expand, however, merchants can overlook areas of international business that are unfamiliar. Ensuring you support international payments and have a logistics network capable of fulfilling orders is important, but with new opportunities come new complexities, particularly when meeting the challenge of sales tax compliance in the United States.
Businesses in Europe are used to dealing with transactional taxes in the form of VAT, but US sales tax is a different prospect entirely.
With over 12,000 taxing jurisdictions throughout the US, each empowered to alter rates and rules with little oversight, the complexity for companies trading in the US becomes mind-boggling. There are 100,000+ rules and boundary changes annually, so it’s easy to see why many companies require outside expertise to manage what initially seems like a straightforward process.
On which items do you charge sales tax? What rate of sales tax do you need to charge for different addresses on the same street? What is the difference between state, county, city and special taxes? Where do you need to file and remit sales tax? What records need to be kept in case of audit? How often do you file taxes and to which authority? And what on earth is nexus?
These are just some of the questions merchants will need to consider before either selling or planning to sell in the US. It’s a veritable minefield of legislation, regulation and complexity but if you get it right the rewards for your business could be sizeable.
What is sales tax?
As revenue from property taxes collapsed during the Great Depression in the 1930s, US states implemented transactional taxes on commodities. As an indirect tax (a tax levied on goods and services), sales tax requires the seller to collect funds from the consumer at the point of purchase.
Today, there are over 12,000 state, county and city jurisdictions in the US charging a sales tax. Forty-five states and the District of Columbia now impose a sales tax on retail sales and some services. The bulk of their revenue is now generated from sales taxes, not income taxes.
The five states that do not have a state-wide general sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon, although Alaska and Montana do allow localities to charge local sales taxes.
How does sales tax differ from Value Added Tax (VAT)?
Many European businesses are familiar with VAT and may assume that they can apply current processes to US sales tax. However, VAT is applied every time value is added at each stage during the supply chain, whereas sales tax is collected only at the time of the final sale.
If a seller has nexus in a state (more on that below) they must collect sales tax on all taxable sales to customers in that state, regardless of the channel.
Just how complex is sales tax?
Depending on the state in which your customer is based, different items may be taxed at different rates. In some states, for example, food is not taxed, while in others the same item may be classified differently. So far so good.
In New York, clothing and footwear costing less than $110 per item/pair is exempt from state sales tax, yet it is still subject to local sales tax in some jurisdictions. Local jurisdictions can change their tax policy towards clothing once a year, however, “most fabric, thread, yarn, buttons, snaps, hooks, zippers and similar items that become a physical component of clothing” or are used to repair it are exempt.
To be compliant, a retailer needs to know the correct classification of an item in each state to ensure it collects and remits the correct level of tax. Collecting too much in one state will make them uncompetitive, while not collecting enough increases their exposure to potential fines. Adding to the complexity, in some states the rates can vary by city, county, or even street. Two adjacent properties can have different tax rates.
What is the risk if you’re not compliant with sales tax regulations?
In an effort to safeguard tax revenues, each state conducts audits of businesses, which may result in penalties and interest. Businesses must keep records of sales in each US city, county and state in which they sell. California alone announced in August 2014 the hiring of 100 auditors, lawyers and specialists to help collect online sales tax.
As more businesses sell in the US, auditors are also turning to international sellers to ensure they do not have a competitive advantage over domestic retailers. The financial importance of collecting sales tax on a state cannot be underestimated. The more auditors assessing international businesses, the more revenue a state can make in penalties and unpaid tax.
With the average audit costing as much as €79,000 (US $100,000) you can’t afford to be complacent about compliance.
What is nexus?
The good news is international businesses selling in the US are not required to collect sales tax in a state unless they have “nexus”.
Nexus is defined as a connection or business presence in a state or jurisdiction. If you have nexus in a state, you need to collect and remit sales tax according to their regulations.
How do you determine if you have nexus?
On the face of it, for a marketplace seller, it sounds like you need not be concerned with Sales Tax. However, here comes the bad news. Activities leading to having nexus vary per state and can include activities such as opening offices, stores or franchises, storing items in warehouses or even attending meetings or tradeshows.
Determining nexus can be confusing if you are unprepared or do not fully understand the obligations. This will ultimately increase your business’ exposure during potential sales tax audits.
Once you have determined where nexus exists for your business, you are required to calculate, collect, report and remit that state’s sales tax. There are several scenarios where nexus can be applied to marketplace sellers giving you a “significant physical presence”, and these should also be considered before you start selling to US consumers.
What constitutes a “significant physical presence”?
Nexus rules are established by individual states and every state defines them uniquely.
Determining exactly how a rule applies to a business is critical. With more than 12,000 sales tax jurisdictions across North America, and with rates and boundaries constantly changing, staying on top of nexus responsibilities is a substantial drain on businesses, carrying no benefit to the bottom line.
Recently, in an effort to avoid losing taxes, many states have enacted Amazon laws, requiring more national and international online retailers to collect sales tax for the first time. These laws expanded definitions of nexus to include online-specific relationships such as affiliate and web advertising.
As a marketplace seller, you will need to consider closely the ways in which you manage your fulfillment as a number of scenarios here may trigger nexus.
Nexus triggers
The following scenarios are some of the more common situations in which marketplace sellers can trigger nexus.
Owning or leasing property or warehouses in the US
To better serve US consumers, and for cost-effective delivery, many marketplace sellers opt to store inventory in the US itself. Whether you decide to own or lease property in the US for this purpose, or you decide to rent or own storage or warehousing facilities, this will be considered a nexus-triggering activity. You will therefore be required to register, collect and remit Sales Tax for sales in the state in which your property, storage or warehouses are located.
Using a third party fulfillment provider with a presence in the US
Similarly, some marketplace sellers may decide to outsource elements of their supply-chain to a third-party, who will store and deliver goods to customers on their behalf. This method of fulfillment can prove cost-effective for businesses and enable you to get goods to your US customers much quicker. However, even if you outsource to a third party, and it is the third party who owns the warehouse and delivers your goods in the US, this can still trigger nexus.
Let’s take Fulfillment by Amazon (FBA) as an example. FBA helps sellers sell products internationally by giving you access to Amazon’s logistics network. If you ship your products to their fulfillment centers, they’ll store, pick, pack and ship it locally to your customers.
Whilst the definition of nexus varies slightly from state to state, all states where Amazon has warehouses (with the exception of Virginia) say the same thing, namely that this suffices for the creation of nexus. For example, Kansas regulations state that “stocking inventory in a Kansas warehouse or consignment” triggers nexus. Similarly, Washington regulations state that where “the goods are located in Washington at the time of sale and the goods are received by the customer or its agent in this state” nexus will be triggered.
Amazon won’t always notify you if they move your inventory to a new fulfillment centre. So a conservative approach is to register for Sales Tax in all the states where Amazon has a fulfillment centre to avoid getting caught out. It should also be noted that once you have nexus in a state you must collect tax on all sales into that state whether or not you ship them yourself or through a third party.
Drop-shipping methods
Many retailers and marketplace sellers utilize drop-shipping as a supply-chain management technique. In this scenario, the retailer does not keep the goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer or a wholesaler who then ships the goods directly to the customer. This triangular situation adds a layer of complexity when it comes to determining nexus.
If both you as the retailer and your drop-shipper are situated outside of the US, and thus have no nexus in the state of your US customer, it will be the customer who is subject to “use” tax.
But if your drop-shipper is located in, or has nexus in, the state in which the sale occurs, then the drop-shipper could be responsible for collecting sales tax. That said, the rules vary again across different states, and in certain circumstances use of an in-state drop-shipper by an out-of-state retailer is a nexus-creating relationship, and it will be the seller who will be responsible for collecting the sales tax. In other states de minimis thresholds apply, whereby nexus is triggered only once the retailer or the drop-shipper have shipped $50,000+ worth of goods.
With this degree of complexity, sellers must ensure they plan ahead. All members of the supply-chain must cooperate to determine nexus to avoid either double-charging for sales tax or not charging at all.
Determining nexus
To safely navigate these challenging tax rules, businesses should understand their exposure as part of a nexus study. Making the nexus determination on your own is difficult, confusing and can lead to problems further down the road.
Other sales tax rules
This complexity doesn’t end at nexus! Sales tax compliance is full of complicated rules and nexus is just one aspect. Several other layers must also be considered in order to be fully compliant.
Some bizarre but very real sales tax laws:
In New York, any bagel that has been sliced or prepared with toppings is subject to a sales tax. However, if it is sold whole and consumed outside of the store, it is untaxed.
Alabama charges a 10-cent tax on any pack of cards that contains 54 or fewer cards in the deck. The seller must also pay $1 and an annual tax of $3.
Pennsylvania taxes air – at least the air that comes out of a compressed air vending machine or vacuuming vending machine. Therefore, petrol stations must charge the tax when customers pump up their tyres. Also in Pennsylvania, state and US flags are not subject to tax, but if either is sold with “accessories” (i.e. a pole), the entire purchase becomes taxable.
In New Jersey, naturally carbonated water is exempt, but artificially carbonated water is taxable.
And finally… in Tennessee, the sale of a good is subject not only to the state sales tax of 7%, but the local sales tax on the first $1,600, plus an additional state sales tax of 2.75% on the second $1,600, all of which cannot exceed $3,200 – potentially subjecting a sale to a 9.75% sales tax rate.
Top points to consider before selling into the US
1. Keep up to date with each state’s tax requirements
Businesses need to keep up to speed on all the changes made by states and municipalities each year. These changes include rate increases/decreases as well as new sales taxes added to jurisdictions, and boundary changes.
2. Establish processes for water-tight record keeping
The best way to stay compliant is to keep up to date on filing sales tax returns and payments (quarterly or monthly, depending on the state’s requirements) and keep accurate and detailed sales records.
What records do businesses need to keep?
Sales invoices
Paid bills
Contracts
Purchase orders
Register tapes
Bank statements
Cancelled cheques and similar original documents
Depreciation schedules and other fixed asset records
Documents supporting tax-exempt sales, such as resale and other exemption
Certificates
Freight bills indicating shipments to addresses across states
Keeping records and preparing and filing sales tax returns can be a major headache, particularly for small businesses. The good news is there are tools available that automate these processes, reduce this tedious and labour-intensive task, and save you money in the long run.
3. Understand your nexus requirements
As outlined above, nexus-triggering events can be complicated and vary across states and product types. The way in which you deliver the goods sold to US customers will have implications for your tax obligations. Using any third party, whether it’s a drop-shipper, carrier or warehouse can trigger nexus for your business, so consulting with experts will be critical.
4. Plan to use geo-location over ZIP codes
While the US Postal Service has established ZIP codes for mail delivery, tax jurisdictions do not generally follow ZIP codes. Going down to street level is essential to get it right. Businesses relying solely on ZIP code often find big discrepancies during audits.
In order to help businesses cope with these differences, providers of automated solutions continually research the physical boundaries of taxing jurisdictions nationwide. Without the use of geospatial technology, there is limited chance of accurately determining which jurisdiction applies to a transaction.
5. Set out your returns filing and remittance schedule
Each US state has its own set of rules and regulations for filing and remitting tax, which may differ from other states. In addition to state rules, cities and counties may impose and manage sales tax returns on their own.
Responsibility lies with businesses to not only determine if they have to file with specific cities and counties, but also to register of their own accord. Moreover, filing frequencies vary by jurisdiction so not all returns are due on the same day of the month. When dealing with multiple states and local jurisdictions, the number of due dates and filing schedules that must be managed can be daunting.
Filing methods can vary just as much, even within the same state or municipality. Some states now require sales tax returns to be filed electronically; others still require hard copy submission, while a few states offer online filing along with an electronic data interchange (EDI) option.
6. Collect and store all exemption certificates
Not everyone is required to pay sales tax. Depending on the rules in the taxing jurisdiction, certain businesses and individuals may be exempt. The vendor must collect and keep on file a valid exemption certificate for each business, organization or individual with an exemption.
It is also up to vendors to ensure that exemption certificates are valid for each sale transaction. This requires businesses to keep a copy of each exemption certificate and ensure that they are renewed when they expire.
7. Identify if the “Streamlined Sales & Use Tax Agreement” is right for you
Around half of the states have worked together on an agreement called the Streamlined Sales and Use Tax Agreement, designed to “simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance.” Signing up to SST requires only one form to register across all SST states. Once registered, businesses then have to file returns every month in all SST states.
For companies selling, or looking to sell in the US, or have affiliate relationships in a number of states, registering as an SST volunteer can save you a lot of time, effort and money. There is no cost for registration and if you qualify, filing is a free service across the SST states. SST volunteers have limited audit exposure (no negative audits are possible).
As of early 2015, SST Member States include:
Arkansas
Georgia
Indiana
Iowa
Kansas
Kentucky
Michigan
Minnesota
Nebraska
Nevada
New Jersey
North Carolina
North Dakota
Oklahoma
Ohio
Rhode Island
South Dakota
Utah
Vermont
Washington
West Virginia
Wisconsin
Wyoming
8. Plan for sales tax holidays
Further complicating the matter, dozens of states also declare sales tax holidays. Some states offer tax reprieves for products like school supplies for kids, while others give consumers a tax break on hurricane preparedness items, like plywood and nails. In states where hunting is a big business, tax holidays might be in place for firearms, ammunition and hunting supplies.
The holidays are varied and complicated, often taking place over specified dates and limiting the number of items that can be purchased tax-free.
In Virginia, for example, during the sales tax holiday for clothing and school supplies, many items are singled out as exempt. For clothing, this includes clerical vestments, choir and alter clothing, corsets, girdles, lingerie, purchased costumes, steel-toed shoes, suspenders, formal wear, etc. However, protective gloves, hard hats and helmets are taxable. School supplies that are exempt include calculators, binders, erasers, lunch boxes, highlighters, notebooks, paintbrushes, scissors, etc.
Keeping up to date with these tax holidays may seem burdensome, but could actually prove part of a rewarding marketing strategy and help you to take advantage of peak selling times.
Steps to successful market-entry in the US
International trade is a great way to grow your business, so don’t be put off by the complexities of sales tax. Expansion need not be daunting and provided you take the right steps, selling your products in American markets could be the boost your business needs.
Work out where your business has nexus, so you know in which states you’ll need to register by declaring your business.
Get your ID number by setting up an account with a state, and visit their local “.gov” website to determine the exact steps. Usually they will have you file a form and register.
Once that is complete, you will have a unique code applied to your business and this code will show up along with your business name in all future sales tax filings.
As soon as you have completed your paperwork, make sure to check that same regulatory department for up-to-date rates, tables, rules, and boundaries.
Research the taxability of your items, making sure to apply thresholds and tax holidays if they apply in the state.
Make sure that you only have to file one sales tax form in one state, as many states require remittance to local jurisdictions (which can number in the hundreds), as well as the state.
Alternatively, there are a number of solutions available to merchants to help automate and take the administrative burden out of US sales tax. You can speak to the KnowGlobal team to find out more.
(SOURCE)
Monday 30 January 2017
Amazon.com, Inc.'s Q4 Preview
Amazon.com, Inc. (NASDAQ:AMZN) reports on 2/2 after the close. Bank of America Merrill Lynch is slightly below on revenue and above on EPS vs. the Street. Amazon’s use of Google PLAs ads, November AWS price cuts, and weakness in select offline retailer sales (online shift?) are three key variables for the quarter. Amazon’s holiday press release data was not conclusive on 4Q spending, but highlighted several solid growth trends, including Fulfillment by Amazon (FBA) delivery growth, Alexa/Echo demand, and Amazon Business strength. While Amazon remains its top eCommerce idea for 2017, BAML is cautious into 4Q’16 results due to: 1) Historical unpredictability of 4Q; 2) Increasing revenue expectations due to offline retailer misses (share shift to online), and 3) Risk to 1Q margin outlook due to content/fulfilment ramp.
BAML has below Street margin expectations in 2017 at revenue/GAAP profit of $35.6bn/$978mn vs. the Street at $36.0bn/$1,337mn. While BAML anticipates cuts to Street 2017 profit expectations, the firm thinks the Street will view content and fulfilment investment positively and see potential for retail margin to rebound in 2018 as recent fulfilment centers better leverage fixed costs, 3P mix increases, India investment growth slows, and streaming content costs are better absorbed (Prime Video expected to launch globally in 2017). Any commentary on the border tax or COGS deductibility implications will also be important for the stock (unlikely that Amazon provides much guidance), BAML estimates that loss of imported COGS deductibility could be more than 50% dilutive to EPS.
As in the past, BAML thinks investors will quickly move past a near-term profitability miss if the top-line trajectory remains solid, retail market share is rapidly shifting to Amazon, and the Street is constructive on Amazon's investment initiatives. BAML views any downside on conservative 1Q profit guidance as a particular buying opportunity as core drivers (Prime, AWS, delivery infrastructure advantage) and new opportunities (SaaS, India, B2B, autos, apparel) remain intact. BAML views Amazon as the most attractive long-term risk/reward for Internet mega caps., and maintains its $1,125 PO.
11 Mistakes To Avoid When Selling Clothing on Ebay With Jason Slone
In this LIVE VIDEO with Jason Slone, A.K.A Prof Sales we will be covering 11 mistakes to avoid when selling clothing on eBay.
If you are selling on eBay and want to learn how to sell clothes effectively these 11 mistakes will save you from much hardship. Steve and Jason have been selling on eBay for many years and have learned some awesome strategies for making money on eBay through selling clothing.
In this video we will be covering the best items to sell on eBay, eBay shipping, tips for improving the listing process, increase profits on eBay, and much more!
We hope you enjoy this video! Watch out for it on February 2!
Sunday 29 January 2017
The Biggest Mistakes I Made With My
First Wholesale Order
By Stephen Smotherman
About 6 months ago, my very first wholesale order was delivered to my house… Of course, I had to take a picture. We worked as fast as we could to prep and send this huge wholesale order to Amazon. As soon as our wholesale shipment arrived at Amazon, we started to see some sales… but then things started to go terribly wrong. Sales started to slow and prices began to tank.
To make a long story short, I ended up actually losing money on my first wholesale order. Sure, I was able to get almost all of the capital back, but overall it was a massive failure.
If you know me, then you know that I’m a “glass half full” kind of guy, and I was able to turn this epic failure into a learning experience. Since mistakes were made, I thought I’d share with you the 6 biggest mistakes I made in my first wholesale order (and the last mistake was the biggest) so that you can set yourself up for successful future wholesale orders.
1. Ordered too many items
When ordering products from wholesalers, the items you buy usually come in cases, so buying only one of an item is usually not a possibility. I knew I was going to need to buy multiples, but I must have had my head in the clouds because I bought way too many items. I honestly should have known better.
Any time you try something new, it’s usually best not to jump headfirst into the deep end… but instead to wade in slowly until you get used to the water. In my first wholesale order, I went way too deep and ended up with plenty of inventory that took forever to sell. Some of them I may even be paying long-term storage fees for soon.
2. Spent too much money
I mean, waaaaaaaaaay too much money. When you’re dealing with a wholesale supplier, they’ll usually have what is called a Minimum Opening Order amount. Different wholesalers will have different minimum amounts that they’ll need for your first order. They have these so the wholesale supplier knows that the buyer is a serious buyer and will be worth the time and energy to work with.
For my first wholesale purchase, the Minimum Opening Order was around $350, but I think I got caught up in the excitement and totally blew past that minimum. I ended up tying up a lot of my sourcing capital that could have gone to my retail or online arbitrage sourcing.
When you make your first wholesale order, be sure to not go too far above the minimum. Not only do you not want to use too much of your sourcing capital on a method you’re not yet confident in, but you’ll also want to make sure the items you order meet your expectations. Once you find success in your opening wholesale order, then you can go back and get more.
3. Ordered time-sensitive goods
I ordered items that were focused around a specific season, and for the wholesale order to be successful, I needed these items to sell quickly. It turned out they didn’t all sell in time and when the season passed, I had to drastically lower my prices in order to get the sales and to avoid any additional monthly or upcoming long-term storage fees.
It’s probably best to order items that should sell well all year long when it comes to your first wholesale order. I ended up putting all of my eggs into one basket hoping that all these items would sell by the end of that season, and I ended up paying for it.
4. Didn’t Negotiate
I’ve negotiated deals to get a better price most of my life. I can do it at garage sales, thrift stores, and at retail stores with store managers. Most of the time I’ll say, “If I buy all these items, will you give me a discount since I’m buying so many?” Most of the time I can get a small percentage off of the overall total. That one question has saved me thousands of dollars… but for some reason, I just never thought about it with this order.
Now, don’t get me wrong, I understand trying to negotiate a better deal on the first order isn’t always the best way to introduce yourself to a supplier, but remember mistake number 1 and 2 from above? I ordered way too many items and spent way too much money. If I was ordering the minimum, I would not have asked for a discount, but since my first order was a great deal higher, I think I could have negotiated a better deal.
5. Made faulty assumptions
I made two very incorrect assumptions that cost me both time and money. My first assumption was assuming that my shipping was going to be free. I guess with all of my online purchases in the past, I assumed an order this big would qualify me for free shipping. I had no basis for this assumption, and when I saw the final shipping costs, it ended up eating into the profits I had calculated.
I also assumed that the items I was buying would not come poly-bagged. My first wholesale order had many items that were going to need poly-bagging in order to send to Amazon. I ordered a ton of poly-bags and suffocation warning labels so that when the items arrived, I could bag them up and ship them to Amazon quickly. As it turned out, the items were sent already poly-bagged and had a printed suffocation warning label on them. So now, I have what seems to be a lifetime supply of poly-bags in my office.
When you are making your first order, don’t be afraid (or too proud) to ask your supplier questions. Even if you think the questions are elementary, go ahead and ask so you are able to make knowledgeable decisions.
6. Didn’t realize difference between a manufacturer and a distributor
This ended up being my biggest mistake. If I could have known this and applied that knowledge to my wholesale sourcing strategy, then most of the other mistakes from above could have been avoided.
When you purchase from a manufacturer, you’re buying directly from the maker of the product. You’ll be able to buy your inventory with the highest possible discounts. You might have to go a little deeper when buying from a manufacturer, but knowing you’re getting the best deals usually outweighs how deep you might have to go.
On the other hand, when you purchase form a wholesale distributor, you’re working with a middle-man who needs to take his cut of the profits. The distributor buys directly from the manufacturer and then marks up the inventory so that he can make a profit. Then the distributor offers up these wholesale items to us with smaller minimum orders than the manufacturer requires.
As you may have guessed by now, my first wholesale order was purchased from a distributor. When I got my huge wholesale order processed and sent to Amazon, I immediately began to see some sales come in, but after a short time the competition started to come in (who probably got their inventory from the manufacturer at better prices) and the prices tanked quickly.
In the end, I was able to recoup almost all of my capital back from that first wholesale order. I know some people will think that it was a waste of time and money, but I don’t see it that way at all. While the order ended up not meeting my expectations, it did provide many valuable lessons. I have taken these lessons and applied them to future orders and have seen great success.
Aside from my first wholesale order, I simply love sourcing and creating wholesale orders. I’ve found some great companies to work with and have reordered many items over and over again. I’m most thankful to my wholesale mentors Dan and Eric from The Wholesale Formula. After taking three different courses on selling wholesale items on Amazon and not finding the success I was looking for, finally the teachings from The Wholesale Formula just plain worked!
Aside from my first wholesale order, I simply love sourcing and creating wholesale orders. I’ve found some great companies to work with and have reordered many items over and over again. I’m most thankful to my wholesale mentors Dan and Eric from The Wholesale Formula. After taking three different courses on selling wholesale items on Amazon and not finding the success I was looking for, finally the teachings from The Wholesale Formula just plain worked!
Right now, the cart to purchase The Wholesale Formula is open, but it will only be open for one week. The cart will close on Thursday, January 26th at midnight.
SPECIAL BONUS worth well over $300:
I believe in this course so much that I’m ready to give you a special bonus package worth over $300. If you purchase The Wholesale Formula through my link, then I will give you access to ALL of the following digital eBooks and video courses for free. You’ll get:
The Reseller’s Guide to How to Keepa Camel ($97)
The Reseller’s Guide to a Year in FBA ($67)
The Reseller’s Guide to Board Games ($49)
Married to Reselling ($27)
and you’ll get access to our newest book/video course (coming soon!)
The Reseller’s Guide to a Year in FBA ($67)
The Reseller’s Guide to Board Games ($49)
Married to Reselling ($27)
and you’ll get access to our newest book/video course (coming soon!)
The Wholesale Formula is a video-driven course put together by my wholesale mentors, Dan Meadors and Eric Lambert. Their methods in this course have actually saved me from repeating my massive failure with my first wholesale order.
One of the best parts of The Wholesale Formula is their money back guarantee. If you’re not satisfied with the course, you can get 100% of your money back. You really don’t have anything to lose here, but so much to gain.
This course will walk you through exactly how to add wholesale to your Amazon business in a way that I’ve never seen taught anywhere else. I’ve completed three different wholesale courses and this is the only one that taught me the methods that actually worked!
How to Source Products to Sell On Amazon
By Antony Maina
Sourcing products to sell on Amazon (NASDAQ:AMZN) is somewhat different than looking for products to sell on eBay and similar auction websites. You need to start thinking along the lines of selling products at a retail store more so than just selling used items one or a few at a time.
So how can one source products to sell competitively on one of the largest eCommerce sites in the world? Well, there is no one answer to this question. It all depends on the type of products you want to sell. Your own preference for the kind of eCommerce business you want to build and your customers’ preferences also come into play.
However, there are a few tricks that can help you get started.
How to Source Products to Sell on Amazon
Sourcing Products Overseas
With the world so connected now thanks to the internet, you no longer have to physically go to China, India or Japan to source merchandise from overseas.
Of course, large retailers have been selling products manufactured overseas for years to keep prices low. But today there are a couple of online wholesalers that you can source your products from, and one of the best known of these is Alibaba.com.
This giant online marketplace functions more or less like an Amazon for wholesalers. From the website you can get a variety of products that you can order and have shipped to your preferred destination. As you do this, make sure you search for unique products that are also in high demand so they will quickly sell on your Amazon Store.
Use Google for Your Sourcing
While sourcing products overseas is one option, there are some particular products like supplements that you may want to order domestically. The U.S. has tough FDA regulations so it is wiser to source these kinds of products from approved and compliant suppliers right here at home. If you are, for instance, interested in selling Vitamin C, just search Google for “Vitamin C Private label suppliers.” “Private label” simply means that the supplier will customize your products with your message and logo after your purchase. This gives you the ability to customize products to make direct connections with your customers — and hopefully generate followup orders.
What’s Next?
Once you’ve ordered your products and are ready to sell look into Amazon’s FBA service to handle the fulfillment side of your eCommerce business with ease.
The FBA service allows you to pre-emptively send and store your products in one of Amazon’s many fulfillment centers. The benefit: every time a customer orders a product from your Amazon store, Amazon takes care of the packing, shipping and customer service on your behalf. Pretty cool, right?
Next focus on marketing your products on the eCommerce giant’s massive website being sure to research how to get a good rank on Amazon.
Potential Trouble on the Horizon
But today the burgeoning business opportunities as an Amazon seller may be threatened. Some are questioning whether the incoming administration of incoming U.S. President Donald Trump could make things tougher for eCommerce sellers.
The best answer is — probably. Trump has vowed to place a tariff on all Chinese imports as part of an economic stimulus plan. If this happens then importing products for your eCommerce store could become super expensive.
The question is whether more fair trade oriented Republicans in Congress might block that move. But for now, it’s best to focus on getting your business started while watching and waiting to see how the new policies shake out.
Saturday 28 January 2017
Protecting Your Amazon Business: Tips From an Insider
By Peter Kearns
Are you an Amazon seller who has been recently suspended? Or have you received warnings about suspension? Are you unsure what to do next or how you even got to this point?
Selling on Amazon can be tricky. However, the right knowledge about Amazon’s policies and violations, combined with strategies for preventing suspension, can help you save your business.
Amazon has more than 270 million customers and is the most trusted brand worldwide. The retail giant has built this vast customer base and exceptional reputation because of high quality service it provides. As a result, Amazon has very little patience for sellers that offer poor shopping experiences.
Many sellers have received a warning or faced account suspension at one point or another, due to performance violations or customer complaints. Amazon isn’t shy about policing these issues even for its top sellers. Suspensions are not rare – they can happen at a moment’s notice – and often Amazon will give you very little detail as to the reason behind your suspension.
While suspensions can hurt immediate cash flow, they’re not detrimental to your business if handled correctly. And many suspensions can be prevented by following key best practices. Here’s a closer look at the world of Amazon seller privileges and how businesses can manage and prevent suspension notifications.
Maintaining your selling privileges
The first approach Amazon sellers should take to protect their business is to prevent suspensions altogether. The golden rule for sellers is to manage their accounts the same way Amazon manages its business, by following these three Amazon Leadership Principles:
Customer Obsession
Insist on High Standards
Bias for Action
Customer obsession is probably the most important of the three. As a seller you are more or less an extension of Amazon. Customers do not differentiate between sellers and Amazon – if something goes wrong and it’s your fault, they’ll likely blame Amazon. As a result, Amazon is very concerned about the way in which you treat and interact with customers. If you’ve created a bad experience, Amazon will take action through a warning or suspension.
So to prevent punishment, your number one priority needs to be responding to customer issues without delay. This means that you must apologize for everything, respond to any and all issues within 12 hours, and issue refunds with no questions asked.
It’s also important to insist on high standards, which means that your product listings must be accurate and shipment processes and product quality must be consistent with what you’ve told customers.
Lastly, make sure that your team has a bias for action. What does that mean? Well, part of having high standards means you’ll immediately take any action necessary to improve the customer experience. If you receive a complaint, don’t be afraid to contact seller support immediately to inform Amazon that you’re taking action to resolve the issue and prevent future instances.
Types of policy violations
Even some of the most diligent Amazon businesses have faced violations. Amazon values its customer service and is quick to take action in response to customer complaints. The two types of Amazon seller policy violations that your business could face include seller performance violations and product quality violations.
Seller performance violations are the easier of the two to manage. Amazon essentially creates metrics and ranks you (green, yellow or red) on each one. The metrics include measurable issues like late shipment or order defect rates. When you’re underperforming in any metric, you receive warnings or suspension. These rates are very clear to understand and sellers are aware of the benchmark they need to maintain their business.
The second, more complicated type of violations are product quality violations. When Amazon issues one of these violations, they typically provide very little information as to why or how to resolve it. Product quality violations involve any of the following three customer complaints:
Counterfeit Complaints: When customers believe a product you sold them is counterfeit.
Material Difference Complaints: When customers believe that an item they received is different from what they ordered.
Expired Product Complaints: When customers receive items that have already expired, or are going to expire before they’re completely consumed.
The challenge with product quality violations is that it’s often difficult for sellers to know where they stand. There are no green boxes or metrics to track. So to remain in good standing, it’s important to practice preventative techniques.
Preventing account suspension
Business owners must constantly monitor feedback and buyer/seller communications in order to prevent account suspension. If you receive any feedback that is less than five stars, reach out to that customer and make sure it has been resolved. Even though Amazon already knows something went wrong based on the feedback, they’ll know you addressed it immediately.
It’s crucial for sellers to monitor buyer/seller communications. This is another key location of information that you can use to proactively prevent suspension. It helps you predict issues before they arise and address them before Amazon issues a warning or suspension. If you do have a significant issue arise, it’s crucial that you proactively contact Amazon Seller Support to make sure Amazon is aware that you’ve addressed the issue.
Lastly, performance notifications within Seller Central can help you address issues before suspension. Amazon will communicate with you solely through this channel, so pay close attention to these notifications and address them before it’s too late. At the end of the day, it comes down to taking a proactive approach in response to all communications with both Amazon and the customers.
What to do if your account gets suspended
Despite your best efforts, it’s possible that Amazon will still suspend your account at one point or another. The first step to take should this situation arise is to inactivate all listings and correct the errors. This is crucial because once you get reinstated, all of the inventory you previously had for sale will otherwise become active again. That can lead to new order defects (and further suspensions) because shoppers will once more be able to buy the products that led to your suspension in the first place.
When you’re suspended, Amazon won’t give you much information as to why. So the next step is to review Amazon correspondence, buyer/seller communication and feedback. This will give you some information and provide you with the ASINs in question. But beyond that you’ll have to do your due diligence to address the issue.
Peter Kearns
Once you’ve determined the root causes, it’s important to write a clear Plan of Action (POA) and provide documentation. This needs to be similar to a business plan in that it should lay out how you’ve fixed the issue and how you’re going to prevent it from happening again. Be specific! Maybe you’re adding more quality control team members or you’re reviewing all of your product descriptions.
Also, keep in mind that if you’re a large seller and you’ve been down for a few weeks due to suspension, you might be put on a “rolling reserve” disbursement schedule when you are reinstated. When you’re suspended, sales are flat. So when they reinstate your business, they’ll immediately spike. Amazon will assume something is wrong and hold onto your funds for a short time period. Keep this in mind for budgeting and planning purposes.
Lastly, remember to be professional and courteous in your communications with Amazon. The company has worked hard to provide such a widely trusted platform for you to run your business. Remaining on Amazon’s good side is a smart move for everyone. Be proactive, polite and ultimately treat Amazon employees as if they’re your best customers, because in a sense, they truly are.
(SOURCE)
By Peter Kearns
Are you an Amazon seller who has been recently suspended? Or have you received warnings about suspension? Are you unsure what to do next or how you even got to this point?
Selling on Amazon can be tricky. However, the right knowledge about Amazon’s policies and violations, combined with strategies for preventing suspension, can help you save your business.
Amazon has more than 270 million customers and is the most trusted brand worldwide. The retail giant has built this vast customer base and exceptional reputation because of high quality service it provides. As a result, Amazon has very little patience for sellers that offer poor shopping experiences.
Many sellers have received a warning or faced account suspension at one point or another, due to performance violations or customer complaints. Amazon isn’t shy about policing these issues even for its top sellers. Suspensions are not rare – they can happen at a moment’s notice – and often Amazon will give you very little detail as to the reason behind your suspension.
While suspensions can hurt immediate cash flow, they’re not detrimental to your business if handled correctly. And many suspensions can be prevented by following key best practices. Here’s a closer look at the world of Amazon seller privileges and how businesses can manage and prevent suspension notifications.
Maintaining your selling privileges
The first approach Amazon sellers should take to protect their business is to prevent suspensions altogether. The golden rule for sellers is to manage their accounts the same way Amazon manages its business, by following these three Amazon Leadership Principles:
Customer Obsession
Insist on High Standards
Bias for Action
Customer obsession is probably the most important of the three. As a seller you are more or less an extension of Amazon. Customers do not differentiate between sellers and Amazon – if something goes wrong and it’s your fault, they’ll likely blame Amazon. As a result, Amazon is very concerned about the way in which you treat and interact with customers. If you’ve created a bad experience, Amazon will take action through a warning or suspension.
So to prevent punishment, your number one priority needs to be responding to customer issues without delay. This means that you must apologize for everything, respond to any and all issues within 12 hours, and issue refunds with no questions asked.
It’s also important to insist on high standards, which means that your product listings must be accurate and shipment processes and product quality must be consistent with what you’ve told customers.
Lastly, make sure that your team has a bias for action. What does that mean? Well, part of having high standards means you’ll immediately take any action necessary to improve the customer experience. If you receive a complaint, don’t be afraid to contact seller support immediately to inform Amazon that you’re taking action to resolve the issue and prevent future instances.
Types of policy violations
Even some of the most diligent Amazon businesses have faced violations. Amazon values its customer service and is quick to take action in response to customer complaints. The two types of Amazon seller policy violations that your business could face include seller performance violations and product quality violations.
Seller performance violations are the easier of the two to manage. Amazon essentially creates metrics and ranks you (green, yellow or red) on each one. The metrics include measurable issues like late shipment or order defect rates. When you’re underperforming in any metric, you receive warnings or suspension. These rates are very clear to understand and sellers are aware of the benchmark they need to maintain their business.
The second, more complicated type of violations are product quality violations. When Amazon issues one of these violations, they typically provide very little information as to why or how to resolve it. Product quality violations involve any of the following three customer complaints:
Counterfeit Complaints: When customers believe a product you sold them is counterfeit.
Material Difference Complaints: When customers believe that an item they received is different from what they ordered.
Expired Product Complaints: When customers receive items that have already expired, or are going to expire before they’re completely consumed.
The challenge with product quality violations is that it’s often difficult for sellers to know where they stand. There are no green boxes or metrics to track. So to remain in good standing, it’s important to practice preventative techniques.
Preventing account suspension
Business owners must constantly monitor feedback and buyer/seller communications in order to prevent account suspension. If you receive any feedback that is less than five stars, reach out to that customer and make sure it has been resolved. Even though Amazon already knows something went wrong based on the feedback, they’ll know you addressed it immediately.
It’s crucial for sellers to monitor buyer/seller communications. This is another key location of information that you can use to proactively prevent suspension. It helps you predict issues before they arise and address them before Amazon issues a warning or suspension. If you do have a significant issue arise, it’s crucial that you proactively contact Amazon Seller Support to make sure Amazon is aware that you’ve addressed the issue.
Lastly, performance notifications within Seller Central can help you address issues before suspension. Amazon will communicate with you solely through this channel, so pay close attention to these notifications and address them before it’s too late. At the end of the day, it comes down to taking a proactive approach in response to all communications with both Amazon and the customers.
What to do if your account gets suspended
Despite your best efforts, it’s possible that Amazon will still suspend your account at one point or another. The first step to take should this situation arise is to inactivate all listings and correct the errors. This is crucial because once you get reinstated, all of the inventory you previously had for sale will otherwise become active again. That can lead to new order defects (and further suspensions) because shoppers will once more be able to buy the products that led to your suspension in the first place.
When you’re suspended, Amazon won’t give you much information as to why. So the next step is to review Amazon correspondence, buyer/seller communication and feedback. This will give you some information and provide you with the ASINs in question. But beyond that you’ll have to do your due diligence to address the issue.
Peter Kearns
Once you’ve determined the root causes, it’s important to write a clear Plan of Action (POA) and provide documentation. This needs to be similar to a business plan in that it should lay out how you’ve fixed the issue and how you’re going to prevent it from happening again. Be specific! Maybe you’re adding more quality control team members or you’re reviewing all of your product descriptions.
Also, keep in mind that if you’re a large seller and you’ve been down for a few weeks due to suspension, you might be put on a “rolling reserve” disbursement schedule when you are reinstated. When you’re suspended, sales are flat. So when they reinstate your business, they’ll immediately spike. Amazon will assume something is wrong and hold onto your funds for a short time period. Keep this in mind for budgeting and planning purposes.
Lastly, remember to be professional and courteous in your communications with Amazon. The company has worked hard to provide such a widely trusted platform for you to run your business. Remaining on Amazon’s good side is a smart move for everyone. Be proactive, polite and ultimately treat Amazon employees as if they’re your best customers, because in a sense, they truly are.
(SOURCE)
How To CRAIGSLIST!! | For Your Amazon FBA and Ebay Business
Discover what you can buy and sell on Craigslist!
Friday 27 January 2017
Amazon SEO Tips: 5 Lessons Sellers Can Take From Great On-Page SEO
By Erik Matthes
Marketplace selling is a dog eat dog world – you have to win the Buy Box, and competition to get there can be tough. Shoppers are looking for fast and cheap deals, and won’t spend too long agonizing over which seller to buy from.
So, how to succeed?
Amazon SEO best practices and tactics can be used by ambitious sellers in order to maximize product listings. Thankfully, we’ve got some Amazon SEO tips to help your products rank better.
First things first: Optimize within your platform in 2017
As we all settle down after the hype of Black Friday and Cyber Monday, it’s time for merchants and sellers to regroup and get ready for another year of trading in 2017.
Before we launch into these five SEO strategies, it’s important to emphasize that Amazon sellers should be optimizing primarily within the Amazon platform itself. (Nathan Grimm’s awesome blog on Moz from 2014 covers Amazon’s search ranking factors).
If you treat optimizing your Amazon listings EXACTLY like optimizing your website in search engines, you are going to struggle. You have to know the difference – these tactics are transferable, but you should never lose sight of the end goal – more Amazon sales.
With that said, let’s launch into our Amazon SEO tips:
1. Longtail keywords in product names
Longtail keywords are big in SEO right now and they are useful for Amazon sellers, too.
Shoppers are on a mission and they know what they want – longtail keywords help customers identify your products more accurately. Give your products the best possible chance of ranking and converting by using longtail keywords in your product titles.
• Use accurate and specific keywords in your title – listing product features like colors and sizes will help improve your conversion rates. Amazon is always looking for more conversions because conversions lead to more sales on its platform. By giving Amazon what they want (more sales), you are getting what you want, too (more revenue).
• Put brand names in product titles to help you rank for branded search terms. Be specific.
• Use an Amazon keyword research tool to help you identify keyword opportunities.
2. Unique content
Unlike search engines, Amazon doesn’t penalize duplicate content – but having boring manufacturer content isn’t going to help conversions.
To stand out:
• Differentiate yourself from competitors by providing more product data. Don’t make people hesitate because they aren’t sure about key product features – always give the user as much as information as you can.
• Provide content that will satisfy both the shopper who wants to make a purchase fast, as well as the browser who is doing market research and will come back later.
Just make sure to avoid huge walls of texts above the fold and use concise language. And, take advantage of formatting features like bullet points and bold text to better sell your words.
3. Competitor analysis
The key to Amazon SEO success is holistic competitive analysis. Don’t just focus on the obvious facts in front of you, delve deeper into the customer experience to get real insights on how to beat your competitors. Ranking within the seller marketplace takes strategic research.
Competitor analysis should be keyword focused. Answer these questions when doing your research:
• What words are your competitors ranking for?
• What keywords are popular?
• How have your competitors approached product titles?
Look outside Amazon to get inspiration, but bring it back to the platform for implementation.
Price is another factor to analyze. While you shouldn’t always compete on price, it can definitely help.
Competitor pricing is a super important factor for making it into the Buy Box – you can use software that will strategically change your prices so that you can win it. Sometimes a cent can make all the difference and it can be worth it – just be careful about selling too low and undercutting profits in the long-term.
Product filtering (colors, sizes) can also make a big difference to conversions – look at how your competitors have approached filtering. Try to offer more flexible options.
Finally, make sure that your products are nearly 100% available – Amazon doesn’t like to rank unreliable sellers.
4. Product imagery & accurate product data
Complete product data and imagery will help increase your conversions. Just like good on-page SEO, Amazon SEO is all about giving users as much information as possible and helping them make the right decisions by being accurate and informative.
Understand that:
• People like to zoom in on images – include high-quality product images on your product pages. Try to offer as many angles as you can.
• Product dimensions must be perfectly clear – returns and negative reviews often come from people thinking the products was a different size.
Don’t let negative reviews and returns impact your seller ranking and always be upfront about a product’s size. A great way to visually communicate product dimensions is to include another item next to your product for comparison.
5. Customer review acquisition
Social proof is increasingly important for B2C and B2B sellers, both online and on Amazon.
• Customer reviews lead to more sales – encourage people to leave feedback by including a review prompt in the parcel, or in your emails. Don’t be too pushy and try to offer an incentive if you can.
• You ideally want to receive both reviews for your products as well as ratings for you as a seller. Customers look at both, and each metric can impact their purchase decision in either direction.
• Don’t be afraid of the occasional negative review or seller feedback. Anecdotal evidence suggests that a 100% positive seller rating might not always increase conversions; people often find that a figure in the 90s is more realistic and truthful. (After all, no one is perfect 100% of the time).
• Bad Amazon reviews are legendary – a really funny, outrageous, or unfair negative review may actually galvanize other customers into “retaliating” with positive reviews.
There will always be things that keep Amazon sellers up at night, but by following these optimization strategies you can win the Buy Box and succeed as an Amazon seller.
What Amazon SEO tips are you going to be trying out in 2017?
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