Amazon expanding into the freight forwarding business
According to a Wall Street Journal report this week, Amazon is continuing its vertical expansion by moving into the freight forwarding industry, as they are now directly involved in transporting goods by ship from Chinese retailers directly to Amazon warehouses.
It’s still very early to piece together how this move will impact private label sellers. Will Amazon start offering cheaper and more efficient shipping solutions to Western sellers? Or by providing an easier path for Chinese merchants to sell on Amazon, will we see even more significant growth in competition, making it harder for smaller sellers to compete? Either way, this move suggests that big changes are ahead.
BigCommerce guide to Amazon FBA sales tax
BigCommerce has just added to their already helpful list of tax resources by putting out a comprehensive guide to how sales tax applies to American FBA sellers. Certainly worth a look if you’re at all confused about the process, as it covers everything from how to ensure compliance, how to collect tax through Amazon, and how to file your sales tax returns afterwards.
Amazon to begin collecting sales tax in even more states
On a related note, Amazon announced it will begin collecting sales tax in Missouri and Mississippi in February. This means that by March 1, Amazon will be collecting sales tax in ten states where it didn’t collect taxes prior to 2017, and only six eligible states remain untaxed (perhaps another reason to refer to the guide above!).
More and more top Amazon sellers opting for FBA
Marketplace Pulse just put out an interesting article analyzing the percentage of top 10,000 sellers using FBA in each of Amazon’s marketplaces.
The rate is highest in the USA at 57%, but FBA usage continues to grow globally. According to the article:
The number is so high in the US because of how many sellers selling on Amazon.com are not based in the US. FBA has become a life-saver for foreign retailers to compete with domestic sellers by offering the same last-mile shipping guarantees. This is not as big of a factor in European marketplaces, but as US sellers expand internationally it will continue to grow.
So while FBA has its drawbacks and certainly isn’t right for every seller, it certainly provides more sellers with a chance to compete. And since this analysis is only looking at top 10,000 sellers, it’s clearly a program that can work.