Selling on Amazon JapanFebruary 11, 2019 in Amazon, Distance Sales, Ecommerce Tips, VAT, VAT and Fulfilment
Amazon Japan is growing quickly and represents a fantastic opportunity to grow a business. Here are some facts about Amazon in Japan which might surprise you:
- Japan has the 3rd largest GDP in the world after (USA & China);
- Japan is the 10th largest country in the world with a population of 126 million people;
- Japan overtook the UK in 2018 to become Amazon’s 3rd biggest marketplace (after the USA & Germany);
- Amazon accounts for 22% of e-commerce transactions in Japan.
- This article breaks down into 10 steps on how to get started on Amazon Japan.
1. Research Japan
Is Japan a good market for your product?
It’s important to have some idea if Japan is a suitable place to sell your products. But generally speaking, it is and many people overthink this. There are a few types of products that won’t be a good fit in Japan. Here are some examples:
Christmas Products: Japanese don’t celebrate Christmas
Complex Games & Card Games: Lot’s of instructions of English language required
Birthday Cards: Japenese don’t exchange birthday cards
Large Furniture: Big, heavy and expensive to store at an Amazon Warehouse
2. Do market research for your products
But generally speaking, if you have a product which sells well on Amazon in your home country it should be fine to sell on Amazon Japan
It’s relatively straightforward to look at your category of products on Amazon Japan:
Use something like google translate a popular customer search term for your product
Copy and paste the result into Amazon Japan to see what similar products are available.
You can change your setting to English to make it easier to navigate and get a feel for the prices and sales rank of them.
3. Set up your Amazon account
It’s easy to add Japan to your account. Although Amazon counts the territory separately (you can’t transfer products over there like you can between European countries) they do make it straightforward to add Japan to your account. They have an official video on YouTube of how to do it. If you’re starting from scratch or you want to set-up a new account, then you will need to submit your I.D and wait for verification checks to be processed. This usually takes around 7 days and is the same process as you went through when you first set-up your Amazon account
4. Get brand registered
If you’re on Amazon’s Brand registry 2.0 program and your account is connected you just raise a support case with the team to get Japan added to your brand registry.
The important thing note here is that you (currently) don’t need a trademark in Japan to have a brand registry on you Amazon Japan account. European & USA trademarks are accepted.
5. Set up your listings
It’s important to get a good quality translation and copywriting done. Very few Japanese people are comfortable shopping online in English, so you will struggle to sell much without getting your listings properly written. And whilst google translate works for translating an individual word or phrase, the grammar is so far removed that it isn’t effective at all for translating sentences.
6. Send your products
Amazon Japan operates FBA centres the same as they do in Europe & the USA. You can send your products directly to them. The thing to look out for here is that you will need either an “Importer of Record” (IOR) or “Attorney for the Customs Procedures” (ACP) to be responsible for accepting the goods into Japan. Amazon doesn’t provide this service, but various companies do. It costs from around $100+ depending on the size of your shipment.
7. Pay your taxes
At the point of import, you pay import tax and duties. These are around 11-14% of the value of your goods, depending on what particular category they are in.
In addition, there is a Consumption Tax, which may or may not apply to you:
– There is an annual CT compliance threshold of YEN 10 million (around £85,000), based on the base year of two years prior to the tax year for sales in Japan.
– For resident companies or for PE’s of foreign entities where the start-up capital is greater than YEN 10 million, then immediate CT compliance is required.
Foreign companies providing goods or services may be obligated to charge consumption tax. This includes ongoing compliance including filing tax returns and paying tax to the Japanese tax authorities
Exporters with taxable supplies below this limit may elect to become taxable businesses to facilitate the recovery of an input CT.
8. Get traffic
Amazon Japan has sponsored products like they do in the USA and Europe. This is where you bid on your chosen keywords and pay for the clicks you get. They also have automatic campaigns which make it easier to get started. Facebook & Instagram are both very popular in Japan, so you can use their advertising services to attract customers too.
9. Get Paid
Amazon transfer money to international banks so this is fairly straightforward – simply input your bank details into your Amazon account to get paid. However, transferring money directly from your Amazon account to your home bank account usually costs around 4% in fees. International currency transfer services can help you save on these fees.
10. Restock and add more products
Once you’ve proved there is demand for your products in Japan you can start to expand the range of products that you sell there and re-stock on your first batch. Congratulations! You’ve successfully added a whole new market to your business.