Hey guys! Welcome to the second episode
of Ask Jungle Scout. Hope you enjoyed the
first episode! If you haven’t checked it
out make sure you do that. If you want
your question to be answered on the
show
make sure you put it in the comments
below this video for a chance for it to
be picked out for another episode.
Alright,
Question one is from Vadimas. How
about customs duty if sending goods from
China to the US? When and how should you
pay
duties tax? Thanks for the question Vadimas.
So what I’ve seen, is that sellers will tell
their supplier, that we need freight
forwarder that will handle customer
duties. So basically they will pick – and a
lot of them like Fedex and DHL etc – they
generally all handle customers duties. So
if your supplier is handling your
shipping for you
they will basically tell you when there’s duties
tax to be owed or they might ask for you to
pay a certain amount up front. They might
say “okay, based on your shipment value, it
could be about two hundred dollars, so
please pay that in advance so that your
shipment isn’t held up and then
whatever the balances we will pay you
back”
So if you’ve got a good relationship
with your suppliers that option should
be fine.
You might be asked to pay a certain
amount upfront, that then your supplier
will let you know how much it actually
was, and then they’ll reimburse you with the
rest or they’ll credit you for the next time
there’s customs duties to be paid. The
other route to ago is if you organize the
freight forwarder yourself.
There are a out there – Shapiro I know
is quite a popular one. I don’t know from
personal experience but I believe it’s a
very straightforward process, they look
after that all for you, so if you choose
a US freight forwarder and so basically what they
do is they pick up your shipment from
China and they’re responsible for it all
the way over to the US and they’ll walk
you through the whole process of paying
customs duties. Whichever option you
choose the most important thing is that
you make your supplier or your forwarder
aware that you need someone
or you need the customs duties to be
paid. You just need to ask the question
and let them know it it needs to be paid
and they’ll tell you whether that
particular freight forwarder is able
to handle that for you.
Other sellers I’ve spoken to, have said
that basically they will get a call from
let’s say Fed Ex or DHL saying that
they’re holding their stock and they
won’t release it until the customs
duties are paid and then they’ve just been able to
pay it over the phone or online and as soon
as they do that, then the items are then released.
Question 2 is from Greg. How do you bundle
products using overseas suppliers? Ok
firstly why would you want to bundle
your items? One of the big reasons people
bundle different items together is to
make their offering unique to what
everyone else is selling and also to
make it harder for other people to come
in and copy their product. So while it
might seem a bit more difficult it’s
actually not too different to just
getting one item. Essentially you can ask
the one supplier if they stock the other
item that you’re after and get them
bundled together or in some cases you
might need to find two different
suppliers. In that case you would then
pick the supplier that you want to be
the main sort of supplier that will ship
your product through the US. I would ask
that supplier “are you happy OR are you
willing to accept this product and put
it in a package with your product?” and
quite often I’ll be happy to do that and
so then with the second supplier all you
do is you just place an order with them
as per usual but you get them to ship it
through to the other factory. The good thing
about this is that shipping from one
factory in China to another factory is
usually fairly cheap so the shipping
there will be quite minimal, and then as
I said you get factory A to package the
two products together and then send them
off together as one unit to the US.
Question 3 is from Assad. Is it a must to
get a trademark now for our product?
Basically the answer is no. The purpose
of a trademark is to further protect
your brand or your products from other
people copying them. When you’re just
starting out your business, you haven’t
launched any products,
there really isn’t any reason for anyone
to want to take your name or to really
infringe upon that, and to get a trademark
is quite an expensive thing to do.
So generally speaking a lot of sellers
will start up their business without a
trademark and then that’s something that
they’ll look at once their business has
been well established. The point at which
you want to look at getting a trademark
is really up to you and is dependent on
how far along you are in your
business and when you would like to make
that leap. If you’ve got the ability to
get a trademark for your brand
it certainly is a good idea and does
give you a certain level of protection
however it’s not necessary at all to
have for your business. Question 4 is
from Jordan. Any general tips for Aussie
sellers starting up? This is a
great question that doesn’t just apply
to Australia but also sellers from all
over the world that are outside of the
US. As a seller in Australia the biggest
challenge that I came across was
keeping my money in US dollars because
Amazon pays you in US dollars and then
generally your suppliers in China will
accept US dollars only, and Amazon only
pays you out in the currency of your
own country.
So if I was getting paid from Amazon
they would send it in Australian dollars
or it will be converted to Australian
dollars. You can open up things like
foreign-currency accounts so I could
have a business account here in
Australia that is in US. dollars
however Amazon would still send in
Australian dollars because that’s the
country it’s going to. Now the problem
with that is if they send it in
Australian dollars, if they send me a
thousand dollars US, that gets
converted to Australian. Then if I use
that to pay a supplier in China, in that
conversion rate in me
converting it back to US dollars I’ll
probably lose some money. So long term for
your business, you don’t want to be
losing money in the exchange.
So how do you go about keeping it in US
dollars? Well when i first started I
found a great service called Payonner. They
give you a credit card and they accept
Amazon payments in US dollars. You can
make payments
with this US credit card however when
paying suppliers I couldn’t use a credit
card so in that instance I was able to
use Paypal with that credit card
linked to it. Now the downside of this is
that you get charged approximately a
four percent fee on every transaction
going through. The other thing as well is
that not all suppliers will accept
Paypal. They often will, for smaller samples
or smaller orders but when you’re looking
at larger orders they generally won’t
accept Paypal. A great service that I’ve
now found which is great for Australian
sellers but I’m sure a lot of other
foreign sellers as well, it’s called World
First. So I believe they are somehow
connected to Citibank but they’ve got
the ability to set you up with a US bank
account so you can get paid into that
account with US dollars and then you can
make payments to suppliers from there in
US dollars.
The other really big challenge I found
as a foreign seller was figuring out
the US tax system and the legal
requirements. Now I want to start this
out by saying that I’m not legal advisor.
I can’t give you business advice
this is just what I found in my own
experience. So firstly as a foreign
seller do you need to pay tax in the US?
Without going into it too much, if
you’re doing FBA in the US,
yes you do need to pay sales tax in those
states. Any state where your inventory is
being held. So it’s not just the address
or the state that you’re sending your
inventory to, because Amazon will often
distribute your inventory to many
different warehouses so that it can
access their customers quicker. So you
might have to pay in a number of states.
Now how do you find out which states you
need to pay sales tax in? Well i found
that TaxJar is very good for that.
So basically TaxJar will tell you all
the different states that you’re selling
in. Now how do you go about registering in all
those states? Basically you need an
accountant in the US. I actually found that
on Seller Central they list a number of
accountants that help people with Amazon
businesses. Contact all of them. I believe
most of them should be able to help
foreign entities,
foreign sellers to register for
sales tax in the relevant states in the
US. Then of course that same accountant can
help you figure out any other relevant
forms or help you to do an actual tax return
in the US.
Ok so the second part of George’s
question Also how to save money shipping
wise if products are sent to Australia
before it goes to FBA? Mate, I haven’t found
a way. Most Australian sellers I’ve spoken
too, just send direct from China
to the US. It’s just too expensive
to send it to Australia first and then to
send to the US.
It does make it harder. You do have the
option of getting different services in
China to inspect your products before it
leaves there so that it gives you some
peace of mind about that product. The
best thing to do is to get some samples
sent out to you.
Unfortunately then, you do need to kind
of hope that the quality of your
big shipment matches the quality of the
samples.
Perhaps you could get a couple of
samples for each shipment that get sent into
the US to give you some further peace
of mind. As a long-term business play,
you want to build a good relationship
with your supplier so the more you can
do that, you can get to a point where you
can trust them that they are indeed
sending the best quality.
I don’t know if any other of these
sellers or foreign sellers have any
other experiences or found a cheaper way
to send to Australia and then onto the
US. If you have, make sure you put it in
the comments below to help us other Aussie
Chinese sellers own blackhat method multiple seller accounts and any other foreign
sellers. So those are all the questions
for this week. I wanted to try and keep it
a little bit shorter but again if you
want your question to be answered on the
show
make sure you put it in the comments
below. Give us a thumbs up if you liked
today’s episode. We’ll see you next week!