Amazon foreign currency changes could cost sellers
Amazon have made changes to their set-up and now you can receive euro payments directly into your bank account. But this could cost you on fees.
Up until March 2014, Amazon sellers had to open a bank account in specific countries in order to receive proceeds from sales – which was a time-consuming and expensive process. Now, people selling in Europe can receive sales directly into their UK bank account via Amazon – however they will a currency conversion fee of around 3.5% on all Euro sales.
Tot it up. A UK seller taking €10,000 of monthly sales on Amazon European marketplaces will pay Amazon an additional £3,500 per annum to use the “Amazon Currency Converter for Sellers” system.
Deepak Goyal, Head of the e-tailing team at Currencies Direct, said: “British e-tailers need to be aware of the costs attached with selling their products via Amazon in Europe. When it comes to converting their hard-won sales back into Sterling, there are various options open to them: allow Amazon to convert their sales at a 3.5% cost, open a high street bank account within the Eurozone or use a specialist e-tailer Collection Account that will convert your sales into Sterling for a considerably lower fee.
“However, opening a Eurozone bank account can take up to six months and can also carry fees of up to 3%. If you want to lose the currency conversion fees, the obvious choice is to set up an e-tailer Collection Account. At a time when the online retail market has never been so competitive, it pays to take your currency costs as seriously as VAT and supplier costs. When every sale counts, do not let currency fees wipe out the gains from selling overseas.”
Cutting down on currency conversion costs will help reduce a seller’s overall liability for selling via Amazon, which varies according to retail sector; for example, sellers pay approximately 8% of the sales price of consumer electronics goods to Amazon, rising to approximately 17% for watches. Sales fees are made up of a monthly fee and a “variable closing fee” depending on the category the product is listed in.