North America Remote Fulfillment Program: The Breakdown
Many Amazon sellers based in the US would like to sell their products in other countries as well. But selling internationally involves a lot of additional work and obstacles such as taxes/duties, fees, shipping internationally, and storing inventory in foreign countries. According to Statista, as of 2018, 45% of US online businesses are selling internationally. This number would probably be a lot higher if not for all of the challenges involved in international selling. This is why Amazon created a unique program for its North American sellers to be able to sell in other countries without the additional work. This is known as the North America Remote Fulfillment program or NARF. Here we’re breaking down everything you need to know about NARF and some of the major benefits of the program.
What is it?
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.
Enrolling in the NARF program is simple. Before enrolling, you should be registered for FBA in the US, Mexico, and Canada, have a North America Unified Account, and be registered for the Amazon FBA Export program. FBA Export is a separate program that allows citizens in foreign countries to buy a seller’s products from Amazon’s US site, without affecting the business owner’s FBA fees.
Once you are registered for the necessary programs, just log into your Seller Central account and you’ll find “Remote Fulfillment With FBA” under the “Inventory” tab from the main menu. Sellers will have the option to create listings in both Canada and Mexico or either one of the countries. Once approved, your eligible products will be automatically added to the program and available for sale in Canada and Mexico.
Covered Import Taxes
Normally, when sellers want to sell their products in other countries, they must deal with import fees and taxes, amongst other challenges. But with NARF, the 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. This removes a lot of the hassle that typically accompanies international selling, making Amazon’s NARF program an intriguing option. Keep in mind, this does increase the price of the product for the consumer, so you’ll want to take that into account when pricing your products.
grow your market
A major benefit of the NARF program is that it helps sellers expand their market to other countries. The NARF program is like dipping your toes into international selling and is a great way to get started. Amazon makes things simple with NARF and does a lot of the work for you. The program will open up your consumer base to two new countries. And although your FBA fees may be higher with NARF, the increased sales make it worth it for many sellers.
singular inventory management
When selling internationally, sellers will typically have to manage inventory in several different warehouse locations in different countries. But because NARF allows you to sell goods internationally from your US warehouse, you can save time and energy and simply manage your US warehouse inventory. This simplifies things for sellers and consolidates the international selling process into really managing only one inventory location.
risk-free market test
The NARF program gives sellers a unique opportunity to test the waters in foreign countries without having to make a large investment. Because sellers can use the same inventory to sell to Mexico and Canada, they will not need to make additional investments to see if they can find a market niche in these countries. This is a great way for sellers to try out the market in other North American countries without expending additional resources.
The NARF program comes with various tools which simplify the process for sellers. When you enroll in the Amazon Remote Fulfillment program, your listings will be linked to the Build International Listings tool. This tool will automatically duplicate your US listings onto the Canada and Mexico Amazon sites. Amazon will also put the listings through a translation tool so your listings will be in the correct language for the respective consumer base.
This tool comes with pricing options as well. Sellers have the option to 1. Change their pricing rules to receive a profit that is a specific percentage below or above what they are receiving from their US listings, or 2. To keep the same pricing rules to maintain similar proceeds as they are receiving on the US Amazon site. If sellers choose to maintain the same proceeds, the pricing tool will adjust for differences in fulfillment fees, referral fees, and exchange rates and costs involved in converting your profits back into US dollars, to keep the profits as similar as possible in all countries.
With the Currency Conversion for Sellers tool, Amazon will automatically convert your proceeds from foreign countries into US dollars and deposit them into your bank account. This way, sellers will not need to go through the trouble of manually transferring funds, opening up foreign bank accounts, or using third-party payment providers. With the currency conversion tool, simply add your local bank account to Seller Central and Amazon will take care of the rest. This tool comes with a volume-based fee, referring to the volume of sales you make in a year. Amazon rewards sellers for making more sales, so the more you sell over the course of a year, the lower your fee will be. The fees range from .75% to 1.5% of total sales.
A third handy tool that comes with the NARF program is Automatic Listing Creation. This tool will automatically update the Canada and Mexico sites with your new listings on the US site. This saves sellers the trouble of having to manually add new listings to each site.
One thing to keep in mind with the NARF program is that the FBA fees can be pretty hefty, and often nearly double those of US FBA. 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. Many sellers are willing to pay the fees because of the additional profit they can make by selling internationally.
All in all, the remote fulfillment program is a great way for sellers to grow their businesses without having to jump through all of the obstacles involved in international selling. If you want to test out the market in Canada or Mexico, give NARF a try and see what it can do for your business. Happy selling!