There are things that don’t exist. And to a certain extent that includes online shops as well. However, with the crucial difference that very real money can be made with the virtual business. Since Amazon at the latest, practically everyone can make lots of sales in a relatively short time with minimal effort. Sometimes even without a shop, warehouse or sales department. But if you want to become a successful Amazon retailer, you have to consider a lot. You can find out exactly what here.
Antonia Klatt
Last Updated on 30 November 2021
Retail vs. Online Commerce
There may be people who consider a certain sales item to be an absolute hit. So what could be more natural than opening a business to get rich and famous and sipping cocktails in the Bahamas for the rest of your life? Well, it won’t be that easy, because the shop in the best city location devours a lot of expenses and the interest of the running public in the sensational products is often far below expectations. But there is still online selling.
However, anyone who now thinks that they can inspire a gigantic number of visitors to their online shop and convert them into customers who are keen to buy will usually do the math without Google. Search engine marketing is not rocket science, but it takes a lot of experience and skill to find your audience within the internet community, to draw attention to your own online shop and to generate relevant sales there.
And as if the whole topic weren’t complex enough, the goods also have to be stored and packaged for shipping and, hopefully, accepted by the highly satisfied customer, until the sales proceeds are finally posted to the business account and part of the profit ends up in their own pockets at some point. Is there an easier way?
Simply become an Amazon seller
Yes, there is – and the solution is called Amazon. But of course there are also a lot of things to consider here that still stand in the way of life in the Bahamas. One of them is Amazon itself. But more on that later. Because the bottom line is that the company has revolutionized online business to such an extent that the effort required to get started in online business has proven to be manageable. So let’s take the first steps on the path to successful online entrepreneurship.
First of all, you should make yourself aware from the start that your project – if you are serious – is a profit-making business. That means you need a license. You can get it from the responsible trade office. The costs for this vary between 15 euros and 50 euros, depending on the city and state.
company or person: the right legal form
You have to determine the legal form for your company. There is a whole range of legal forms to choose from. Ranging from sole proprietorships to civil law companies (GbR) and entrepreneurial companies UG (limited liability) to GmbH. If you love the big show, you can of course consider founding your own stock company as an alternative.
What distinguishes these legal forms from each other is of course, among other things, the amount of the start-up capital. While the sole trader could still pay the running costs more or less from his private account, the other legal forms require start-up capital. In the case of the GmbH, the contribution is set at at least 25,000 euros and in the case of the AG it already reaches 100,000 euros.
The question of liability
The UG can be founded with a share capital of theoretically one euro, only with such a small sum the running costs cannot be covered for long. A deposit of perhaps 3,000 euros would be more realistic. However, the legal background to the corporate forms is far more complex. While the sole proprietorship is even liable with his private assets, the claims on a UG or a GmbH are limited to the respective company assets, in the case of the GmbH to at least 25,000 euros.
The differences are usually only noticeable when you run your company against the wall. If the worst case occurs, the spectrum of atrocities ranges from simple liquidation to personal bankruptcy with seizure of all salaries and private assets. If you position yourself correctly from the beginning, you will still have a life after the bankruptcy in the event of an emergency.
Whichever type of company you choose – you will of course need a bank account, a tax number and a business address. And since we are in Germany, the paradise of all tax officials, a competent tax advisor is strongly recommended. He will also advise you on the type of company, take care of the fixed assets and also prepare the annual report for companies that are subject to accounting.
Set up an Amazon account and become a seller
Once you’ve done everything without an accident, set up an account on Amazon. But since you already have one, you only need to click on “Sell” in the menu bar on the top right of the home page. You’re already a seller.
Or at least almost. Because now the crucial question follows: Do you want to sell more or less than 40 articles per month? If you choose “less”, you set up a basic account and pay Amazon an amount of 0.99 euros for each item sold. However, with 40 items sold, the Bahamas are a long way off.
Sell nationally or internationally?
So if you want to build your business more professionally, choose the professional seller account. Especially since this account with a monthly flat rate of 39 euros does not mean financial ruin. In addition, Amazon also charges a sales commission, which can be between 7% and 20% depending on the item.
The subject of goods storage is somewhat more complex with Amazon. At least if you decide to join the FBA program. FBA stands for fulfillment by Amazon and meansthat Amazon offers you a complete all-round carefree package: The company stores your goods, accepts the order, packs the goods and not only sends them to the customer, but also handles them Returns. And the whole thing works not only for sales within Germany, but throughout Europe and beyond.
Of course, not free of charge: depending on the season, size and product category, storage fees between 15 euros and 36 euros per cubic meter per month apply. That is more than a little money, but when you consider how great the time and personnel expenditure would be if you had to take care of storage, shipping and returns processing yourself, the costs are put into perspective again.
The subject of warehouse location
But there is still a big catch. Because as an FBA dealer, you have no influence on the country in which the warehouse is located. What now sounds a bit arbitrary, are the effects of a sophisticated and enormously powerful logistics system that is able to deliver to practically every customer in Europe within one to two days of receipt of the order.
To this end, Amazon has set up strategic logistics centers in the most important supplier countries, to which the company moves goods across all borders in order to bundle them and use transport capacities more efficiently. So far, so good – but there are still the tax authorities and two very crucial pieces of news: one good and one bad.
International tax accounting made easier
Let’s start with the good one: Since July 1, 2021, it has been sufficient that you only have to register with a single tax authority for advance VAT returns, even for cross-border sales of goods within the EU. This tax accounting procedure called “one-stop shop” represents an enormous simplification in the tax return procedures. Because previously every seller had to register for VAT in the respective country when a certain delivery threshold was exceeded and of course transfer his taxes as punctually as possible.
But let’s get to the bad news: One-Stop-Shop does not apply to the storage of your goods abroad. It still has to be registered in the respective country and registered with the national authorities under a tax number. Since the transfer of your goods to a foreign warehouse is not initiated by you, but by Amazon without your own intervention, this causes misunderstanding and anger among many FBA sellers – as they now have to register for VAT in the respective countries selected by Amazon for storage.
Entire EU as a marketplace
On the other hand, if you consider that you can reach a gigantic target group all over Europe through Amazon, the anger quickly relativizes itself again. You can also avoid the whole topic by not ticking the menu item “Automatically sell on all EU marketplaces” when registering. In that case, your goods will only be listed on amazon.de and you don’t care about the other tax offices in Europe. But unfortunately you would have to give up the other customers all over Europe at the same time.
And that brings us back to the beginning of your registration. After all, there is still a lot to be done here. Because now there is information on questions that you have hopefully already clarified: register number, your VAT identification number, company address and the responsible management including contact details. And don’t forget: the bank details and direct debit authorizations. The data is entered quickly.
Your shop: finding a name and positioning
The desired name for your shop is asked almost in passing. Here you should have researched carefully beforehand. Because success at Amazon does not come from the supplier, but from the retailer who fills a niche with his offer. And it wants to be found first. On the one hand from the retailer who works out a clear USP (unique selling proposition) for his offer. And for the customer who finds this niche on Amazon by entering keywords at the same time.
Here, quite a bit of marketing know-how is required in order to build up your dealer brand in such a way that it stands for a service promise that guarantees the customer real added value. You don’t have to hire the world’s best advertising agency for this, but a little professional support from the graphic and textual side is a worthwhile investment. With an appealing corporate identity including logo and claim, you can significantly increase the click rates on your Amazon shop.
Be sure to observe copyrights
If you upload your articles, important things like product images and Amazon product descriptions are also included. They should never be simply copied from the network, as they are usually protected by copyright and should never be used without approval. Unless you want to pass on your possibly not even achieved sales to opposing warning lawyers.
In general, trading on Amazon is not as risk-free as is commonly assumed. On the one hand, the retailer is responsible for product liability. And regardless of whether he produced the goods himself, had it made by a supplier and simply labeled it with his own logo or simply sold a branded item. In the event of any defects, the dealer is the first port of call for complaints.
Legal pitfalls when selling
In addition, when selling on Amazon, a whole range of different contractual relationships come into play, which make a possible legal dispute extremely complicated: While a normal online purchase is a matter between buyer and seller, when selling on Amazon, buyers and The seller enters into a contract with the platform operator, while the platform operator concludes the actual sales contract with the buyer.
But even without this legal triangular relationship, there are always conflicts on Amazon. What is meant by this is the behavior of Amazon towards its dealer customers mentioned at the beginning. It is not uncommon for them to be in direct competition with Amazon’s own portfolio. If a retailer gets too big, he gets to feel the concentrated market power of the group in some places and is drawn into an unequal competitive battle for customers by Amazon. It should be clear to everyone who saw the better end for themselves.
Don’t neglect other platforms
That is why anyone who wants to get into online trading should not just depend on a single platform. You should therefore always flank your activities as a seller on Amazon with your own website and your own online shop and also put your offers online with other platform operators so as not to become too dependent on one individual.
If you take this to heart, you can plan your future as a successful online retailer at Amazon in a relaxed manner and with a little luck, a lot of skill and even more discipline you will be able to build a successful business – and, if you get the chance, enjoy a cocktail in the Bahamas from recover from stress.
