Sales Tax and Amazon FBA: Have We All Been Getting It Wrong?

Alex Knight interviews attorney Paul Rafelson about US sales tax for Amazon FBA sellers, and the MTC’s amnesty. Should you opt in?

As you may have seen, sales tax is a rather hot topic for Amazon sellers at the moment, following the Multistate Tax Commission’s decision to hold a US sales tax amnesty for online sellers.

With the October 17th deadline looming, there is much debate about whether Amazon sellers are even liable for sales tax, and whether they should make a voluntary disclosure under this amnesty. This week, I spoke to Paul Rafelson, a state and local tax attorney, to get his opinions on both of these topics.

What Paul said surprised me, as it was very different to the orthodox view of FBA and sales tax. Ultimately, he believes that Amazon sellers who fulfill their orders using FBA may not be liable for sales tax at all. His contention is that sales tax “nexus”, usually the key consideration for Amazon FBA sellers, is actually irrelevant, because Amazon itself is the “retailer” under sales tax law and should be responsible for collecting sales tax themselves.

We also talked about the MTC amnesty, which Paul believes Amazon sellers should not comply with because, in his opinion, it is a bad policy, based on a weak understanding of the realities of selling on Amazon. He also fears that if sellers comply, they could be hit with further taxes, such as income tax and franchise tax, and end up crippled by a huge compliance burden.

You can watch the full interview with Paul above, and we’ve also included a full transcript of the conversation.

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Bringing Together The World’s Leading Amazon Sellers and Sourcing Experts

Twice a year, the Global Sources Summit hosts the leading speakers on sourcing and private labeling from every corner of the Earth

For Amazon marketplace sellers, private labeling remains one of the most popular business models. This is where sellers source a generic item, create a logo and custom packaging, and then offer it on Amazon under their own brand name and listing.

But the private label model is more difficult than people think, and one of the most difficult aspects is sourcing products from China – especially if sellers have no previous experience of importing. They often make simple but costly errors, like miscommunicating with their supplier or having the wrong export documentation.

This is where the Global Sources Summit comes in. It aims to help established Amazon sellers source more efficiently, by learning from the world’s top sourcing and private label experts. It also gives sellers the opportunity to source products from two co-located trade shows, and to visit Chinese suppliers in person.

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Dropshipping: The Essential Guide for Getting Started

Cody Stallard talks all things dropshipping. From deciding what to sell and finding a legitimate supplier, through to processing orders

This post is by Cody Stallard and was originally published as a ten part series on The Wholesale Forums

If you’re looking into selling online, then you will more than likely have come across the term “dropshipping”. Sadly, this isn’t the practice of dropping a ship into the middle of the ocean, however fun that may sound.

No, dropshipping is a business model for online sellers, where merchants don’t purchase their stock until they receive an order. How is this possible? Well, they list an item and then, when an order is placed, they order it from their supplier, who ships it straight to the customer.

Dropshipping is one of the most attractive strategies for selling online, primarily because you never see or touch your stock. This means that you don’t have to find room for hundreds of units, or spend time handling and shipping orders.

In this post, I’ll be looking at the whole dropshipping process, covering everything from from the pros and cons of starting your own dropshipping business, to how the order process works and how to find legitimate suppliers.

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Is Amazon Controlling My Sales? No Matter What I Do, They Stay Flat

Matthew Ferguson explains how following “the data brick road” and embracing change can prevent your Amazon sales from flatlining

Have a question for us? Send it to Readers’ Questions are in partnership with Emanaged and Online Seller Consulting.


Five years ago, we started selling kitchen products on We started with about 500 SKUs and doubled this to 1,000. We then got rid of 500 SKUs that didn’t sell well, and listed new products. At the moment we are at about 800 SKUs, and always sell between 14,000 and 15,000 units a month.

We also have a top seller that sells 2,000 units every month. We had two months where we weren’t able to stock this product so didn’t sell a single unit, yet we still sold between 14,000 and 15,000 units overall those months.

If we have some weeks above average then the next few weeks are below average. We do not change prices much and we do not change our sponsored ads. This is really frustrating as we have the resources to grow, but no matter what we do, we always have the same amount of sales every month.

Do you know anything about Amazon controlling sales, to keep sellers on a certain level?

— Bernd M., Austria

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