How to Sell on Amazon USA from India: An FBA Guide

To sell on Amazon.com from India, you first need an Amazon Seller Central account and an Indian business entity. Then, you secure a method for receiving US dollar payments. Finally, you ship your inventory in bulk to Amazon's US fulfillment centers (a process called FBA), and Amazon handles the final delivery to customers.

Most new sellers get this wrong. They focus on product sourcing first and logistics second. This is backwards. Your legal setup and supply chain are the foundation. A great product can't succeed if you can't get it to the customer or get paid for it.

What Legal Structure Do I Need in India?

You must have a registered business entity in India. A sole proprietorship is the simplest to start, but most serious sellers operate as a Private Limited Company (Pvt Ltd).

A Pvt Ltd company offers liability protection, separating your personal assets from the business. This is critical when selling in a litigious market like the US. It also makes it easier to raise capital, manage taxes, and establish credibility with US partners.

Key requirements for your Indian entity:

• PAN Card: For the business entity itself.
• GST Registration: Mandatory for sourcing goods and for export compliance.
• Import Export Code (IEC): A 10-digit code required for any business exporting goods from India. You can apply for this online from the DGFT.
• Business Bank Account: In the name of your registered entity.

Don't try to do this using your personal PAN or bank account. It creates tax and liability problems down the line.

How Do I Get Paid in US Dollars?

Amazon pays US sellers in US Dollars (USD). You cannot directly receive USD into your Indian Rupee (INR) bank account. You need a service that provides a "virtual" US bank account.

Amazon's own tool for this is the Amazon Seller Wallet. It's the most integrated option. However, many Indian sellers use third-party services like Payoneer or PingPong. These services give you a US routing and account number that you can enter into your Amazon Seller Central account.

Here’s how it works:

1. Amazon Payout: Amazon deposits your USD earnings into your virtual US account every 1-2 weeks.
2. Withdrawal: You then log into your payment service (e.g., Payoneer) and withdraw the funds to your Indian business bank account.
3. Conversion: The service converts the USD to INR at a specified exchange rate and deducts a fee (usually 1-2%).

When choosing a service, compare their fees and exchange rates. A 0.5% difference in fees can add up to thousands of dollars over a year.

What are FBA and FBM?

FBA and FBM are your two main options for fulfilling orders on Amazon.

• FBA (Fulfillment by Amazon): You ship your products in bulk to an Amazon warehouse in the US. Amazon then stores your inventory, picks, packs, and ships individual orders to customers. They also handle customer service and returns. This is the most common method for international sellers because it makes your products eligible for Amazon Prime, which is a major conversion driver.

• FBM (Fulfillment by Merchant): You ship each individual order to the US customer directly from India. This is also called "Merchant Fulfilled Network" (MFN). While it avoids the cost of storing inventory in the US, international shipping for single items is slow and expensive. We rarely see this work for Indian sellers targeting the US market, except for very high-value, low-volume items.

For 99% of Indian sellers, FBA is the correct choice. US customers expect fast, free shipping. You cannot compete on a 2-week delivery timeline from India.

How Do I Ship from India to Amazon FBA in the US?

This is the most complex part of the process. You are the "Importer of Record" (IOR). This means you are responsible for customs clearance, duties, and ensuring your products comply with US regulations.

Here is the simplified process:

1. Prepare a Shipment Plan: In your Amazon Seller Central account, you create a "Send to Amazon" workflow. You specify which products you're sending and in what quantity.
2. Label Your Products: Each individual unit needs an Amazon barcode (FNSKU). Each shipping carton needs an FBA box label.
3. Hire a Freight Forwarder: You cannot just use DHL or FedEx for a bulk shipment. You need a freight forwarder who specializes in Amazon FBA shipments from India. They will handle booking the air or sea freight, customs paperwork, and delivery to the Amazon warehouse.
4. Customs Clearance: Your forwarder will work with a US customs broker to clear your shipment. You will need to provide a commercial invoice and packing list. You will also need to pay US import duties.
5. Pay Import Duties: Duties vary widely by product type (HS Code). They can range from 0% to over 25%. This is a direct cost to you. Make sure you research your product's duty rate before you start.

Common Mistake: Many sellers under-calculate shipping and duty costs. A typical air shipment from India to the US might cost $5-$8 per kg. Sea freight is cheaper but much slower (45-60 days vs 7-10 days). These costs must be factored into your product pricing.

Do I Need a US Company or Address?

No, you do not need a US company (like an LLC) to start selling on Amazon.com from India. You can use your Indian entity (e.g., a Pvt Ltd company) and a payment service like Payoneer.

However, some sellers choose to form a US LLC later on. The primary reason is to simplify US sales tax obligations. As your sales grow, you may be required to collect and remit sales tax in various US states. Managing this from an Indian entity can be complex. A US-based LLC, managed by a US accounting firm, can streamline this process.

For beginners, start with your Indian entity. Don't add the complexity and cost of a US LLC until you have significant sales volume (e.g., over $100,000 in a single state). We see some founders in our Basecamp program prematurely setting up US entities, which adds cost and administrative burden before it's truly needed.