Expanding your successful global Amazon brand to the U.S. market is exciting—and daunting. The U.S. offers massive opportunities and a host of verifications, requirements, and pitfalls. Your e-commerce expansion can lead to delays, wasted resources, and significant financial losses without proper planning. For seven-figure e-commerce sellers, navigating these challenges requires more than just ambition—it demands strategy and expertise.
Are You Asking the Right Questions?
Expansion isn’t just about selling more; it’s about selling smart. Seven-figure sellers know the high stakes and must dig deeper than surface-level considerations. Here’s a breakdown of the critical questions every seller must address before expanding to the U.S.:
1. Where Are You Expanding? Understanding Marketplace Requirements
Expanding to the U.S. involves more than just choosing Amazon as your marketplace. Are you targeting Walmart, Shopify, TikTok Shop, or eBay? Each platform comes with its own requirements for verification, operations, and compliance.
Ask yourself:
- What are the specific documentation requirements for each marketplace?
- Will you need a business or personal utility bill?
- What happens if you’re rejected during verification? Is there a contingency plan?
- Does your chosen marketplace favor a U.S.-based LLC, or can you operate through your foreign entity?
2. How Will You Handle Banking and Financial Compliance?
Setting up a U.S. bank account is crucial but challenging for non-residents. The stakes are high because one mistake can mean losing access to your preferred bank.
Factors to consider include:
- Does your bank require utility bills for address verification—for your business or personal residence?
- Which banks or fintech platforms (e.g., Relay, Mercury) work with foreign entities? Do their address requirements align?
- Are you aware that one neo-bank requires you to be a U.S. person?
- How will you manage currency conversions without excessive fees?
Banking decisions can make or break your expansion—this is not a step to leave to guesswork.
3. Is Your Tax Strategy Ready for U.S. Compliance?
Tax compliance is one of the most misunderstood aspects of U.S. expansion.
You’ll need to address:
- Is your LLC set up correctly for tax purposes? (Disregarded entity, partnership, or corporation?)
- Are you generating effectively connected income (ECI), and how does this impact your federal tax liability?
- Do you qualify for treaty benefits to avoid double taxation?
- Have you determined your state tax nexus, and are you prepared to file in multiple jurisdictions?
- Will you need an Individual Taxpayer Identification Number (ITIN)?
Filing incorrectly—or not filing at all—can lead to steep penalties and audits. Consider a $50,000 profit scenario: If classified as ECI, your federal tax bill could exceed $5,700. Planning ahead can save you thousands.
4. Should You Form a U.S. Company?
Forming a U.S. entity might seem straightforward, but the nuances are critical.
Consider:
- Will a U.S. LLC help you qualify for key marketplaces like Walmart or Shopify Payments?
- How should you structure the LLC for maximum tax efficiency?
- Does converting your LLC to a C Corporation via Form 8832 make sense to take advantage of the 21% corporate tax rate?
- How will you distribute profits back to your home country without triggering additional taxes?
5. What Are Your Sales Tax Obligations?
Sales tax is a notorious challenge for U.S. sellers. The rules vary by state and by platform.
Ask:
- Have you exceeded economic nexus thresholds in any state on non-marketplace sales?
- Do you have a system to manage collection and remittance for Shopify sales, where you’re responsible for compliance?
- Are you prepared for audits if your classification or collections are incorrect?
Sales tax isn’t just a line item; it’s a liability. Avoiding it can lead to fines and damaged credibility.
6. Are You Ready for Insurance Requirements?
Once your Amazon sales exceed $10K in a single month, liability insurance becomes mandatory. This requirement might be more expensive and difficult to secure if you’re operating as a foreign entity.
Consider:
- Can you obtain competitive rates, or will your coverage be cost-prohibitive?
- Do you need product-specific coverage, especially for high-risk categories like supplements?
7. When Should You Consult a Professional?
If these questions feel overwhelming, it’s because they are. Expanding to the U.S. is a high-stakes endeavor that rewards preparation and punishes missteps.
Professionals can help you:
- Avoid account rejections due to documentation errors.
- Structure your business to minimize taxes and maximize profits.
- Navigate sales tax compliance to avoid unnecessary penalties.
- Ensure your expansion is seamless and profitable.
Why Go It Alone?
Imagine assembling a complex piece of furniture without instructions—you might succeed, but it will take longer, cost more, and probably involve a lot of frustration. That’s what expanding to the U.S. without professional guidance looks like. At NCP, we’ve helped countless seven-figure sellers avoid the common pitfalls of U.S. expansion. Our team of experts ensures you’re not just meeting requirements—you’re setting yourself up for success.
Schedule a free discovery call with our team so we can learn more about your expansion plans and share our expansion packages and fees to help you expand and get verified so you can start selling faster.
