amazon's four international selling programs: the breakdown
As Seller Central continues to grow, many US Amazon sellers are expanding beyond North America to international markets. But with taxes and fees, international shipping, and storage, selling overseas can be tricky. So what options does Amazon have for selling across the border? We’re breaking down the four different international selling programs available on Seller Central, their pros and cons, and how they compare, so you can evaluate which selling program is best for your business.
North american remote fulfillment program
NARF is a program that was created for Amazon sellers based in the US, Canada, or Mexico who use Amazon FBA (Fulfillment by Amazon). The program allows sellers based in the US to expand their markets to Canada and Mexico (and vice versa) using Amazon FBA. With NARF, Amazon sellers do not need to send inventory to warehouses in Mexico and Canada. Sellers can maintain inventory in their US warehouses and the products will additionally be available to purchase for consumers in Mexico or Canada on Amazon.ca and Amazon.mx. Because the NARF program is a part of FBA, Amazon is in charge of shipping and handling inventory and will ship your products to the respective foreign country in which customers made a purchase.
A major benefit of the NARF program is that it eliminates significant obstacles that come with international selling and thus allows sellers to try out selling internationally without many of the responsibilities. For instance, with NARF, customers in Mexico and Canada pay the import tax for their country when purchasing your product. Meaning, Amazon sellers will not have to deal with this challenge at all. Another major benefit of the program is that sellers can store their inventory in their US warehouse, eliminating the challenge of finding international storage.
With NARF, sellers will need to create new listings for Amazon.ca and Amazon.mx. But Amazon makes this pretty simple with features like the Build International Listings (BIL) tool which will automatically duplicate (and translate) your US listings onto Amazon’s Canada and Mexico marketplaces.
One con of NARF is that the FBA fees can be pretty hefty, and often nearly double those of US FBA fees. While the fees are significantly higher, this is because Amazon is taking care of shipping and handling, and all obstacles that go along with international selling. With NARF, sellers are also limited to the North American markets and cannot expand elsewhere. To learn more about the NARF program, check out our blog here.
A second international selling program Amazon offers is FBA Export. Unlike NARF, FBA Export allows sellers to sell to over 100 countries and regions around the world. With FBA Export, buyers from other countries who are registered for the program can purchase products on your marketplace site. When an international customer orders a product, Amazon will handle shipping and manage any import/customs taxes. With FBA Export, it is the customer’s responsibility to pay customs taxes and shipping, leaving the seller with no extra charges.
Just like with NARF, with FBA Export US sellers can store their inventory in the US as they normally would. However, there are a few major differences between the two programs. For starters, FBA Export opens up your business to countries all over, rather than only those in North America. Another key difference is that with NARF, a seller’s products would be listed on additional Amazon marketplaces like Amazon.ca and Amazon.mx. While with FBA Export, your products would only be listed on your primary marketplace. But if international buyers find them there, they can purchase them. A final difference between the programs is that with FBA Export, FBA fees are the same for domestic and international orders. While with NARF, FBA fees are significantly higher when selling in Canada or Mexico.
One limitation of FBA Export is that not all products can be exported, and sellers must follow guidelines regarding product compliance and transportation, among others. All in all, FBA Export is a super simple way for sellers to gain access to global customers without having to set up additional marketplaces.
Allow Amazon to buy my products & sell globally
A third option for sellers to get their products out internationally is to allow Amazon to purchase your FBA products and sell them globally via additional Amazon marketplaces. Just like with FBA Export, this program comes at no additional cost to the seller.
If a seller opts into this service, Amazon can list, translate, and price their products on additional global marketplaces. Amazon will list your product and when a customer buys it, the eCommerce platform will purchase the item from you locally and then ship it globally to the customer. With this service, the seller is paid the listing price of his product by Amazon and the customer will receive the item the same as they would any other product purchased locally. Finally, sellers will receive the revenue for their product purchases through self-issued invoices from Amazon.
By allowing Amazon to buy your products and sell them globally, you can increase your sales and profit margin, without having to do any of the leg work. The major distinguishing factor with this program is that the seller is not actually selling their products globally. Here, Amazon is listing and selling your products internationally and simply buying them locally from you, the seller. Similar to the FBA Export program, Amazon takes care of shipping and handling here and the seller does not incur any additional cost. This program is ideal for sellers who would like to increase their sales without having to create listings and manage shipping and inventory in international markets.
The final way a seller can sell internationally on Amazon is through the typical route of global selling. Global selling requires sellers to enter additional marketplaces, create new listings, and manage all aspects of international business including shipping, fulfillment, inventory storage, taxes and fees, and customer support.
When selling globally with Amazon, sellers will have to take on all of the additional costs that accompany that. These include:
· International shipping directly to consumers
· International shipping to fulfillment centers (if using FBA)
· International return shipping
· Customer and language support costs
· Currency conversion costs
· Translating product listings into a different language
· Taxes and duties
Global selling requires a lot more from the seller than the other international selling programs. However, it also gives the seller the most access to international markets, greatest control over their listings, and agency regarding which marketplace they would like to enter into. When selling globally, Amazon provides sellers with features such as the Build International Listings (BIL) tool in Seller Central to make the process of creating new listings as seamless as possible. Additionally, with global selling Amazon offers specific payment services such as the Amazon Seller Wallet (available in the US store only) and the Amazon Currency Converter for Sellers (ACCS). Keep in mind that when using global selling you will have to register for your new marketplace and adhere to the respective registration requirements for that area.
To wrap it all up, there are many international selling programs that Amazon offers, some like NARF and FBA Export are ideal for sellers just starting out in international markets, while others like Global Selling are for those who are ready to commit to another marketplace. There’s a program for everybody and with resources like FBA, the BIL tool, and currency conversion, selling globally is easier than ever. Now you have everything you need to begin selling internationally. Good Luck!