hey it's patti scharf CPA and co-founder of catching clouds the leader in
e-commerce accounting and today I'm going to be talking to all the us online
sellers who are wanting to expand their business into foreign markets and I've
got nine tips for you on how to sell your products online internationally so
let's get started tip number one don't create another
entity unless you are looking to isolate your product liability for different
products that you're selling in different places or unless there are
some kind of international tax benefits of doing so don't create a whole
separate company to sell internationally you can sell to other markets with the
company that you've got and you can avoid having all the administrative
burden of running two businesses tip number two is register for a VAT license
that stands for value-added tax it's kind of like a sales tax that they
charge in other countries and if you're signing up for this VAT license and say
you're doing the process online with your Amazon store just be aware that
that's only about a third of what you actually need to do to get your VAT
license so don't be fooled by that probably best if you just hook up with
another company who specializes in this like simply bat to get to the
information that you need so that you're up and running quickly and you don't
miss any steps tip number three remember that VAT is tax inclusive so when you're
selling a product in the US let's say you sell something for $100 you're
charging six percent sales tax so instead of $100 you'll be charging one
hundred and six dollars you collect that from the customer six dollars goes to
the government and you keep the hundred dollars for yourself however the prices
are tax inclusive when you're charging that so 20% is not an uncommon number an
uncommon amount to be charging internationally so if you charge 20% VAT
and you your price is only a hundred bucks
that means twenty dollars is going to the government and you only get to keep
80 dollars so make sure that when you're saying your prices you are allowing for
that value-added tax tip number four make sure that you configure your
shopping cart to collect value-added tax a lot of our clients what they like to
do is I'll set up let's say they're selling on Shopify they'll set up one
Shopify account for international sales and one Shopify account for domestic
sales and the domestic sales can then be set for all the sales tax they need to
collect and the International one can be set for all the VAT tax that they need
to collect and that way you're not combing cleaning stuff it's better for
listing and all that stuff so make sure that your shopping cart is configured
properly tip number five get your inbound VAT refunded so what I'm talking
about is when your products are being shipped to let's say the UK when that's
going through customs you're going to be paying a value-added tax doing so this
amount can be refunded to you as a credit on your value-added tax return
when you file that so don't forget to do that tip number six minimise your
payment processor fees there's an easy way to do this you find a local payment
processor so a payment processor that's unique to that country and you'll
probably pay a lower rate then if you're using one that's in the United States
tip number seven use a virtual bank so I'm talking about these international
funds transfer services like world first Payoneer ofx com what these services can
do for you is connect to Amazon or Shopify or something like that you can
make the sales in that foreign currency have the funds deposited into your
account in euros or British pounds or something like that and the money can
stay there in that foreign currency the money that's in that account went before
you withdraw it you can just make sure that the currency conversion rates are
more favorable for you before you take that money out here's a bonus tip for
you I would recommend you keep the 20 percent of value-added tax that you
collected in that foreign currency and then pay it in from
there then you don't have to pay the currency conversion rates going back and
forth to u.s. dollars tip number eight work with a freight corridor a freight
forwarder will handle all of the paperwork related to getting your
inventory into this foreign country they'll handle the shipping and the
customs and paperwork insurance all that kind of stuff
we recommend somebody like Shapiro or flex port or common ones that we've seen
our clients use tip number nine stage of products so we're talking about taking
your your inventory and keeping it at a three PL or a main warehouse for longer
storage purposes instead of sending all of that inventory to somewhere like
Amazon FBA if you send send it to Amazon and it sits there for too long they will
start charging you more and more fees that are long-term storage fees are huge
so if you keep it in a warehouse or a 3pl they can help move the product to
where it needs to be to save you money in the long run I hope you like this
video we've got links down below with some different companies we've heard of
that will help you with all of these different tips and if you liked our
video please like it comment and share and if you haven't subscribed please do
and will next time