Amazon is one of the largest online platforms for selling goods, operating in various countries worldwide. Selling on Amazon may vary depending on the country where you run your business.
Before choosing a specific Amazon platform to sell your products, it is essential to carefully consider (using the example of Amazon USA and European countries) various legal aspects that will help you make an informed choice.
Taxes
First, you should focus on taxes, which can significantly affect profitability.
The United States has a system of sales taxes. Sales tax is analogous to the usual VAT charged to the consumer when purchasing a product or service. This tax can be levied at the state or local level - at the county or city level. For example, Delaware has a sales tax of 0%, while California has a sales tax of 7.25%. This means that the seller needs to include the appropriate amount of tax in the product's price.
If you choose the European market, you should consider the VAT system that operates in most European countries. For example, the VAT rate in Germany is 19%, Great Britain - 20%, and Sweden - 25%. You must register as a VAT payer if you reach a certain turnover and collect VAT from your customers.
Requirements for product labeling
Product labeling is another essential aspect to consider. Amazon requires that all products sold on the platform meet each applicable marketplace's product safety standards and labeling requirements.
Labeling requirements are generally less stringent in the US than in European countries. However, this does not mean that they can be ignored.
Customs regulations state that every foreign product imported into the United States must be labeled in the official language of the importing country (in this case, English), indicating the country of origin. This marking must be clearly and prominently located on the product and written legibly.
In Europe, there are strict requirements for product labeling, which may include the indication of some components, font size, CE marking, and other standards. To sell successfully in Europe, you should carefully research the requirements of each country to which you plan to export your goods.
Within several EU countries, there is a requirement for CE marking. This indicates product compliance with EU legislation, which enables the free movement of products on the European market. If a product has a CE marking, the manufacturer has confirmed compliance with the basic health and safety requirements specified in European directives and regulations. If the product is not covered by one of these Directives or Regulations, the placement of the CE logo is prohibited.
Legislation on consumer protection
When entering international markets, one of the essential details to pay attention to is the specifics of consumer protection legislation. In different countries, it can differ significantly, especially concerning the quality of goods and the provision of guarantees.
In the EU countries, a mandatory guarantee provides consumers with the right to free repair or replacement of the product in case of defects within a certain period - usually 2 years from the moment of purchase.
Meanwhile, in the US, the legislation establishes specific rules regarding guarantees. For example, a seller may officially disclaim product warranties in some states. However, it's worth noting that selling a product without a warrant can give buyers the impression that the product is of low quality or is no longer in production and, therefore, should be available at a lower price.
Intellectual property rights
Intellectual property rights are critical to doing business on Amazon because they protect brand identity, copyrights, patents, and trademarks.
In the US, business owners can register trademarks through the US Patent and Trademark Office (USPTO). Trademark owners have the right to use their trademark in all US states.
In EU countries, trademarks can be registered through the European Intellectual Property Office (EUIPO) for protection in all EU countries. This gives trademark owners a single point of contact to protect their rights throughout the EU.
When choosing a region to sell your products on Amazon, you must carefully research all aspects that may affect your business. Taxes, labeling requirements, consumer protection laws, intellectual property rights, and the specifics of doing business are all critical factors to consider before making a final decision.
To avoid mistakes, contact legal consultants who have experience in these matters. This will help ensure that your Amazon business is flourishing and secure.
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