How you can start an Amazon FBA Business

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Today,the great attraction that e-commerce giants like Amazon or Mercado Libre provide for sellers is the immediate reward of taking advantage of the massive flow of people traffic with Amazon fulfillment cost.

And this, comrades in the digital economy, is gold.

In addition to this, analysts estimate that there are about 95 million Amazon Prime members to date. By keeping Prime members satisfied, Amazon has created a faithful following of regular buyers.

And Amazon claiming that almost 50% of all products sold on its site come from Marketplace sellers like you, it's no wonder that sellers continue to take advantage of this capitalization opportunity.

we will look at the best strategies to sell on Amazon using FBA and Alibaba.

Time is short Let's start! 

Amazon FBA Instructions: The Most Important Steps Before You Start

1. Register Amazon's business

Register Amazon's business becomes the manufacturer of your brand; the first thing you need to do is start a company. There are different ways.

If we limit ourselves to founding a German company, you can start a sole proprietorship, a UG, or a GmbH.

If you want to start a business, it is most comfortable for you to start with a sole proprietorship. 

With a sole proprietorship or a GbR, you can then decide whether you want to make use of the small business regulation or not. We will look at the advantages and disadvantages of this regulation in the next step.

Registering a sole proprietorship and a GbR is exceptionally cheap. You pay a fee of 10-50 € directly to your local trade office.

Register Amazon business: Now let's take a look at what a business license looks like:

it is an extract from the business license of the city of Cologne, but it seems the same in other cities. If you register a business for Amazon, you have to report to the responsible authority in your town.

You simply enter your standard data here, such as name and address. At the company premises, you will probably also give your home address if you should work from home. The employee of the trade office will help you with the other information.

The most critical section is at point 15: Your registered activity.

Another critical point about registering Amazon business:

In the beginning, you probably don't know what kind of products you want to sell. So you have to trick a bit here: Print out a list with all categories on Amazon and take it to the trade office.

Get registered for all possible product categories, so you keep yourself open about which products you can sell.

Why register a sole proprietorship in the beginning? Establishing a sole proprietorship is the fastest, easiest and cheapest method for you.

A disadvantage of the sole proprietorship is the liability risk because you are liable with your private assets. Also, you are legally the official manufacturer of your products because you import them outside of Europe.

So if you import a product that contains substances dangerous to your customers or a customer injures your product, you are liable in the event of a lawsuit with your private assets.

But if you sign a sole proprietorship, you can you with a business liability insurance cover - I would suggest you also definitely! Get advice from an expert here and take out insurance in a good time.

If you register sole proprietorships, the later name change to Amazon can also be problematic. 

Amazon checks your data when changing the company form and blocks your account for some time. It sounds worse than it is. If it is time that a change of name is possible for you, this is a feasible process!

If you are thinking about starting a UG or a GmbH right away, you should talk to an expert in this area. Together with your tax advisor, you will also master this process.

2. Open a business account.

To separate your costs, income, and expenses from your private money transactions, you should open a separate business account right at the beginning.

You have a much better overview of your finances and immediately see how much capital you have available for new investments. 

If you work with a tax advisor over time, it will also be a lot clearer for him if your private and business cash flows run through different accounts.

As a sole trader, we not officially obliged to open a business account. However, banks do not like to see your business transactions run through your private account. Therefore, you have to open a business account with many, whether a sole proprietorship or not.

If you want to open a business account, you can go to almost any bank. The monthly costs are usually between 12 - 15 €. There are also costs per transaction, but this only amount to a few cents.

Since the fee models differ slightly from each bank, you should simply obtain various offers.

I always tend to choose my house bank, which could be Volksbank or Sparkasse, for example. Here you benefit from personal contacts who can often provide you with proper business liability insurance. To open a business account there, contact your bank advisor.

The Fidor Bank is a slightly different alternative. Here you have no monthly account management fees. You pay a fee of 20 cents per transaction.

However, foreign transfers outside the EU are not possible here. Of course, there are also solutions for this, for example, by using the excellent services from Azimo or Giroux.

If you have chosen a provider, opening your business account is very quick and easy. With your new bank details, you can then go straight to the next step.

3. Questionnaire for tax registration

Together with your business registration and your business account data, you can now tackle the next task - the way to your responsible tax office. After filling out the questionnaire for tax registration, you will receive your tax number, which you will need again and again.

You can also wait for the inquiry to be in your mailbox a few weeks after the business registration.

Much faster it goes, if you go directly to your business registration and the registration of your business account to the tax office and on-site filling out the questionnaire. The beginning of the tax registration questionnaire looks something like this:

The survey on tax registration is not so easy to fill out, which is why I recommend you look for a filler. If you are friendly and prepared, they will be happy to help you with the office!

In addition to some personal information, you also have to provide the tax office with specific details about your company.

Questionnaire for tax registration

Among other things, you have to estimate how high your income and sales will be in the year the business opens Tand in the following year. Itis difficult, of course, because you do not know how your company will develop.

However, you should first enter tiny numbers here. Otherwise, it may be that you get another form directly from the tax office that obliges you to make large sums of pre-tax prepayments before you even start.

In the questionnaire for tax registration, first, enter low income and sales to save these costs. The basic allowance for income tax is around € 9,000. For your first two years of earnings, it's best to report a value below this amount.

4. Apply for an EORI number

The EORI number replaces the former German customs number and is now valid for the whole of Europe. You need them to import your goods from China, but also when you order the first samples.

EORI number application form

Here you must also enter your new tax and sales tax identification number. If you have not yet received the documents, you can also submit them later.

As soon as you want to apply for an EORI number, you can always contact customs directly and clarify any open questions. They are still very friendly and helpful.

As soon as you have filled everything out, you print out the form and sign it again by hand. Then you only have to send the document by email and hold your EORI number in your hands 1 - 2 weeks later - a great feeling!

Conclusion - Amazon FBA instructions

Some tasks are much more fun on the way to building your own company. But these are also part of it.

But here, too, there is a great advantage: by taking the first steps, you increase your commitment again. You left your comfort zone and successfully mastered the first steps. Now you are ready to go deep into the matter!

The faster you complete these four steps, the more time you have to focus on the exciting tasks - let's get started with product research!