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.
I have a Euro account with Ulster Bank in the Republic of Ireland for all Amazon sales in the Euro zone. Now that I am over €3000, I pay no fees, and, while it was not entirely straight forward to open the account, it did not take months
I honestly do not know what they charge to convert to sterling but as part of RBS, I can take money out of an RBS ATM without a withdrawal fee.
I should also point out that I am a very small scale seller.
I think Mr Goyal would have done better in the article to spell out what his firm charges for that same €10,000 a month retailer.
Mark, I’ve thought about exactly the same bank account and others, but it always seemed to me the downside of the Euro account was that you had to keep the minimum balance, so in effect that money isn’t available. Is this correct or am I missing something?
I’d appreciate your views.
For me at that time, the euro account was simply the least worst option despite its flaws.
When I opened the account, there was no fee but it was introduced soon afterwards which mean that €3000 is ‘unavailable’ in that sense. Psychologically, I consider the Euro account a nest egg, that is, it is not needed for day to day items.
I will now work out what it would cost me to take out the Euros in £ and compare that to Amazon’s 3.5%.
I have been using Currencies Direct for about 3 years. This was because Amazon did not have the facility to disburse Amazon.it funds. They referred me to Currencies direct and after a while I spoke with Deepak and his colleagues in relation to my .fr and .de disbursements also. I made a comparison of the exchange rate paid by them and by Amazon and it was clear that Amazon offered a less favourable rate at that time. In view of that I changed to Currencies Direct and have been a happy customer since then. I get an email to inform me I have received funds and I just email back to confirm i wish to withdraw. I receive the funds in my account in a few hours. It’s simple.
I can confirm apart from being a customer of Currencies Direct I have no other affiliation.
Are you sure it is £3500? My calculator (brain) says £350 for £10000.
It’s £350 per month at that rate, or £4200 per year. He calculated per annum but seemed to only account for 10 months!
Its €3500 on €120000 per year turnover = €291 per month which is 2.91%
We’re all messing up a bit, except for Dan Wilson!
10,000 euros * 12 months = 120,000
0.035 * 120,000 = 4200 euros per year
4200 euros = 3480 pounds (£3500 quoted in article, close enough!)
CurrenciesDirect told me they wanted a £150.00 up front fee to open an account with them, so I politely declined and opened an account with WorldFirst.
The account set up took about two weeks, and now all revenue from our sales on amazon.de, fr, it and .es goes into it, every two weeks.
There’s no fee unless you want to withdraw less than Eur500 and then the fee is Eur 15.00
I can check the balance at anytime on line.
The account is held in Germany, and I have never had any problems with it.
I let it build up to Eur5000 then withdraw it to my UK account, it takes couple of days to transfer.