Last week, Monsoon Commerce and Avalara hosted a joint webinar “Fulfillment by Amazon Benefits, Tips, and Taxes”.
In the 30-minute presentation, Brennan Burns, Senior Strategic Account Executive from Monsoon Commerce and Clayton Goodhue, Partner Sales Manager from Avalara discussed Amazon FBA, Amazon’s global fulfillment network, which has become increasingly popular given its benefits to third-party sellers. The webinar covered the benefits of FBA, tips to help capitalize on the opportunity, and what you need to know about one of the most frequently-asked questions around FBA: State sales tax.
The recording of the webinar is available on YouTube below.
After the presentation, a Q&A session was held and we’ve highlighted some of the top questions and answers here:
Does FBA create a nexus for our sales using other channels? For example, if we sell and ship an item ourselves on eBay to California, and since we also use an Amazon FBA warehouse in California, are we required to charge sales tax for a non-FBA order shipped to California?
Yes. Once nexus, or the requirements to collect sales tax, is triggered in a state, you will collect taxes on all taxable sales made into that state.
Does Amazon allow their shopping cart to collect tax in other than your home state?
Yes. If you have a requirement to collect in other states, you can set up your Amazon profile to collect tax in multiple states here.
Is there an easy way to export Amazon orders into the Avalara console?
Avalara has a simple file import format that uses the data from Amazon orders. Amazon’s output file includes almost all the categories needed for the import, so the work to get it into the format is minimal.
Based on which information does Avalara calculate FBA orders sales tax?
On sales made through Amazon FBA, Amazon can help calculate the correct sales tax rate. Through a simple file upload, Avalara will consume the information for reporting and filing the tax liability.
Can FBA be used for wholesale fulfillment,i.e. B2B, not selling to end-user clients (no tax collected, resale certs on file)?
Not at this time, but Amazon Business may be an option.
Does Amazon’s FBA help increase seller ratings and reviews?
FBA can help seller ratings because the seller is leveraging FBA’s shipping speed and free SuperSaver shipping benefits, which ultimately will leave buyers more satisfied with faster and cheaper service, leading to better ratings and seller feedback (aka ‘Reviews’). Since Amazon also handles customer service issues for all FBA orders (related to delivery time and package integrity upon arrival), any negative feedback or A to Z claims due to Amazon fulfillment errors (late shipment, late delivery, damage en route, etc.) can or will be wiped from the record and not counted against the seller in performance ratings.
If the product itself has issues like the condition was not as described, that is typically still the responsibility of the seller, unless Amazon errantly shipped the wrong product. If a seller’s merchant fulfilled ratings are struggling to stay ‘above the line’ for required metrics, the increased volume of no hassle FBA orders can help dilute the overall ratings, and the seller benefits from improved overall ratings.
It was my understanding that Amazon would move my product between fulfillment centers based on their analytics. Is that true, or do I determine which centers to ship to and fill from?
Amazon aims to avoid inter-warehouse product transfers by splitting up products into shipments to multiple fulfillment centers across their network. This occurs when shipments are created either directly on Amazon or in a third-party software like Monsoon Marketplace. If you want your items shipped only to one fulfillment center, you can utilize Amazon’s Inventory Placement Service. Please keep in mind this option is not currently supported by Amazon’s APIs, so you would need to create FBA shipments directly on your Amazon account and Monsoon Marketplace would later manage your listings once shipments are received at the fulfillment centers. More information about the service is available here.
Can you can use inventory at FBA and have Amazon ship to customers on other sites?
Yes, Amazon offers multi-channel fulfillment for an additional fee. Monsoon Marketplace supports FBA listing and order fulfillment on eBay, Half.com, and Alibris marketplaces for US based customers, and eBay.co.uk for UK based customers.
What does the FBA fee structure look like? Do heavy weight items work better than lightweight items?
You can learn more about Amazon’s FBA fee structure here. Typically lower weight, smaller items will be cheaper to ship via FBA, but it really depends on individual cost per item and comparing pick/pack/ship rates for local versus FBA.
We hope you found our webinar informative. If you have additional questions about how Monsoon Marketplace can help you with Amazon and Amazon FBA please contact us here. If you have more questions about Amazon FBA taxes or retail taxes, please contact Avalara here.