How to Sell on Amazon FBA in the USA from India: A Founder's Guide
The short answer: Yes, you can sell on Amazon FBA in the US from India. It involves setting up a US legal entity, getting an EIN, opening a US bank account and payment processor, and managing international logistics and customs.
Table of contents
The short answer: Yes, you can sell on Amazon FBA in the US from India. It involves setting up a US legal entity, getting an EIN, opening a US bank account and payment processor, and managing international logistics and customs. Many founders get stuck on the details, but the process is straightforward if you follow the right steps.
What are the legal requirements to sell in the US from India?
First, you need a US business entity. While you can sell as an individual, it's a bad idea for liability and tax reasons. We strongly recommend forming a US LLC (Limited Liability Company). It protects your personal assets and simplifies taxes. You can register an LLC in states like Wyoming or Delaware remotely from India.
Next, you'll need an Employer Identification Number (EIN) from the IRS. Think of it as a business's social security number. You need an EIN to open a US bank account, file taxes, and properly operate on Amazon. You don't need a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) to get an EIN for your LLC.
Most people get this wrong because they try to use their Indian company or personal identity. This creates huge problems with Amazon, US banking, and the IRS. Start clean with a US LLC. Services like Stripe Atlas or dedicated legal tech companies can handle the entire formation process for you for a flat fee, usually $500-$1000.
How do I get paid from Amazon US?
Amazon US pays out in US Dollars. You need a US-domiciled bank account to receive these funds without losing a huge chunk to fees. Do not use your Indian bank account directly; Amazon's currency conversion service has high rates.
Here’s the standard, three-step payment stack:
- Amazon Seller Central: Your central source of revenue.
- US Bank Account: A real, FDIC-insured US bank account in your LLC’s name. This is where Amazon deposits your funds. Mercury and Relay are two popular online banking options for founders in your position.
- Payment Processor: A service like Payoneer or Wise to manage the currency conversion and transfer funds from your US bank account to your Indian bank account.
This setup gives you control. You receive USD into your US bank account, can pay any US-based expenses (like marketing or software) in USD, and then choose when to convert the rest to INR at much better rates. Trying to skip the US bank account is a common mistake that costs founders 3-5% of their revenue in unnecessary fees.
How do I ship products from India to Amazon FBA warehouses?
This is the core of "Fulfillment by Amazon." You ship your inventory in bulk from India to Amazon's warehouses in the US, and they handle storage, picking, packing, and shipping to the end customer.
Your main job is getting the products from your factory in India to the correct FBA warehouse door. This involves a few key steps:
- Find a Freight Forwarder: This is a company that specializes in international logistics. They will handle customs clearance in both India and the US, book space on a ship or plane, and manage the final delivery.
- Choose a Shipping Method: You have two main choices: air freight or sea freight. Air is faster (7-15 days) but much more expensive. Sea is slower (45-60 days) but significantly cheaper. Most sellers use sea freight for routine inventory replenishment and air freight only for initial product launches or to avoid stocking out.
- Prepare for US Customs: Your shipment will need a commercial invoice, packing list, and it must clear US Customs. Your freight forwarder will handle this, but you are the "Importer of Record." This means you are legally responsible for ensuring the goods are compliant and that duties and taxes are paid. A good forwarder will act as your customs broker.
For a typical shipment, expect to pay around $2-$4 per kg for sea freight and $8-$12 per kg for air freight, including all fees. These are rough numbers and fluctuate wildly with demand and fuel costs. Always get multiple quotes.
What are the main costs of selling on Amazon FBA?
Your total costs are more than just the product. Founders often underestimate the fees involved. Here’s a breakdown:
| Cost Category | Description | Typical Range |
|---|---|---|
| Landed Cost | The total cost to get one unit from your factory to an Amazon warehouse. Includes manufacturing, shipping, and customs duties. | 25-40% of sale price |
| Amazon Referral Fee | The commission Amazon takes on every sale. It's usually 15% for most categories. | 8-20% of sale price |
| FBA Fulfillment Fee | The fee for picking, packing, and shipping your product to the customer. Depends on size and weight. | $3.50 - $7.00+ per unit |
| FBA Storage Fee | The monthly fee for storing your products in Amazon's warehouse. Billed per cubic foot. | $0.56 - $3.00+ per cubic foot/month |
| Marketing (PPC) | Cost for running Amazon Sponsored Product ads. Essential for visibility. | 5-15% of sale price |
Your target profit margin after all these costs should be at least 15-20%. If your numbers don't work on paper, they won't work in reality. Many sellers fail because they only calculate the cost of goods and the Amazon referral fee, ignoring the five other costs that eat into their margin.
What are the biggest mistakes Indian founders make?
We see the same patterns in our Basecamp E-Com Foundation Program. Founders from India are incredibly resourceful, but they often make a few specific, costly mistakes when targeting the US market.
Underestimating Brand and Marketing: The US market is saturated. You cannot simply put a product on Amazon and expect it to sell. You need strong branding, high-quality photography, and a budget for pay-per-click (PPC) advertising from day one. Expect to spend 10-20% of your revenue on ads in the first six months.
Ignoring US Customer Service Norms: US customers expect fast, no-questions-asked returns and quick support. A single bad review can kill a product listing. You must be prepared to handle returns and answer customer questions in perfect English within 24 hours (an Amazon requirement).
Failing to Understand Cash Flow: The cycle is long. You pay your supplier in India (Day 1), ship via sea (Day 5, arrives Day 50), it gets checked into FBA (Day 60), you make sales, and Amazon pays you out 14-21 days later (Day 80+). You need enough capital to cover inventory and ads for 3-4 months before you see a return. This is the single biggest reason FBA businesses fail.
Starting an Amazon FBA business in the US from India is not easy, but it is a well-defined process. Focus on getting the legal and financial structure right from the beginning, understand all your costs, and be prepared for a long cash flow cycle. Get those right, and you're ahead of 90% of the competition.