#62: Balancing Global Expansion and Tax Compliance

Date: November 11, 2020

Episode: 62

Title: Norman Farrar Introduces Tom Meek, International Business Development Manager at AVASK.

Subtitle: Tax Requirements and things to remember before expanding to new markets 

Final Show Link: https://lunchwithnorm.com/episodes/episode-62-balancing-global-expansion-and-tax-compliance-w-tom-meek/

In this episode of Lunch With Norm…, Norman Farrar introduces Tom Meek, International Business Development Manager at AVASK. 

Tom discussed some of the Tax requirements to meet before expanding into a new market. He also gave some tips for sellers on how to prepare for upcoming changes.

If you are a new listener to Lunch With Norm… we would love to hear from you. Please visit our Facebook Page and join in on episode discussion or simply let us know what you think of the episode!

In this episode, we discuss:

• 10:35 : Things to keep in mind when expanding into EU
• 16:25 : Tax requirements when expanding into EU & UK
• 21:11 : Importance of Product Compliance and doing your research
• 26:37 : Capital investment before expanding to EU
• 29:18 : Pan-European: Definition & Advantages
• 36:56 : Brexit & eCommerce: Changes and Guides for Sellers
• 42:43 : Avask

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Explore these Resources

In this episode, we mentioned the following resources:

• https://www.linkedin.com/in/thomas-meek-b06982ba/
• https://www.avaskaccounting.co.uk/
• https://www.globalexpanders.com/
• tommeek@avaskgroup.com

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Norman  0:00  

Hey everyone, it’s Norman Farrar, a.k.a The Beard Guy here and welcome to another Lunch With Norm, the rise of the micro brands.

Norman  0:20  

All right, so welcome back to another podcast. I’m joined today by Tom Meek. Tom is the business development manager at Avask. It’s an accounting and business consulting firm, with a particular focus on corporate and private entrepreneurs accounts selling on global eCommerce platforms. So focusing on a lot of Amazon accounts. Anyways, in today’s episode, we’re gonna be diving deep into how you can properly prepare your business for global expansion, and how to stay tax compliant. Now, before I get into that, let’s talk with Kelsey. 

Kelsey 0:58

Hello. 

Norman 0:59

Hey, Kelsey. Oh, I should be telling everybody that we are broadcasting live on Facebook, YouTube and LinkedIn. I should be telling people about smashing likes and ringing bells and all that stuff. Or am I taking away the job from you?

Kelsey 1:13  

That’s my one and only job. 

Norman 1:14

Sorry. 

Kelsey 1:15

Alright, so yeah, smash those like buttons. Like and share the video. I see that we already have a couple likes coming in from you. Angie, coming in.

Norman 1:25

Hey, Angie. 

Kelsey 1:27

Hello, Angie, how are you? This is going to be a great episode and we’re looking forward to it. You can follow us on social media. We got Facebook, Instagram, YouTube. If you happen to miss some of the episode, you can always go to the YouTube channel. It’s Norman Farrar, and all the full episodes will be there along with some fun highlights and all that good stuff. But yeah, we are a podcast too. So Apple and Spotify. You can find us there. I just searched Lunch With Norm and that’s about it. Oh, and how are you doing today, folks? Let us know in the comments and yeah, how’s your Wednesday? Anything new? How’s your coffee? We got Marina joining us. Hello, Marina.

Norman  2:10  

Hey, Marina. A nice warm Toronto day. I can’t believe it.

Kelsey 2:15  

Oh, yes and before I forget, I always forget to say this. But we do have a pretty big giveaway today. 

Norman 2:22

It’s the biggest giveaway we’ve ever given away. 

Kelsey 2:25

Yeah. So stick around. Who knows maybe you’ll have to answer a question from the podcast today. I don’t know. But yeah, listen to the podcast. 

Norman 2:38

Be honest. We don’t know. 

Kelsey 2:40

Okay, great. Awesome. Yeah. So that’s it for me and we’ll get started.

Norman  2:47  

Okay, so just to add, so if you are on a replay, skip ahead, and you can just watch this get right into it and see what Tom and I are talking about. If you are on my personal Facebook page, it’s always good to skip over to the Official Fan Page at Norman Farrar, a.k.a The Beard Guy and you’ll see a lot of what you’ll see the whole episode as well as highlights and video. I just realized I didn’t turn my phone off and I can just imagine this is gonna go off at any time. I’ll try to turn that off in a second. Anyways, look, if you have questions like Kelsey said, throw them over into the comment area, and we will try to get to every question. If not, we will have Tom answer them a little bit later on. So the major thing that we can do right now is just sit back, relax, grab your cup of coffee and enjoy the show. All right, Tom, where are you?

Tom 3:51  

Hello. How are you?

Norman  3:52  

Hello sir. It’s been a while since we’ve been able to get together.

Tom 3:59  

It’s been a very long time. I think we must be coming up nearly a year now, surely.

Norman  4:05  

Yeah. Was it San Francisco?

Tom 4:09  

It was. Yes, it was. I think it was the beginning of this year. So absolutely flown by. 

Norman  4:18  

So all I can remember guys. If you were a fly on the wall at this dinner that we went out to, I think my stomach is still hurting. I’ve got a ton of pictures that I can blackmail, most of the people at this company and Oksana was there and it was incredible. We had a blast and so the reason I’m bringing that up is that we really didn’t know each other. We went to one other conference that we sat down and had a few drinks. But we met a second time almost a week apart and just really got to know each other and from that time on now you’ve got that network. So I always like to bring in how you can expand your business, how you can expand your network and it doesn’t have to be about business. We talked, we don’t think we talked at all about business during most, probably 90% of the time, 99% of the time we were there. So yeah, that’s always a benefit and I’ve got those pictures where if I ever need a little bit of cash flowing always.

Tom 5:27

Please don’t bring them out today. Yeah. Just to add to that, yeah, I still speak to everyone that we’ve met that day a bit every month at least. So it’s great to stay in touch.

Norman  5:39  

Yeah, yeah and also, Oksana is usually on because we’ll see her make a comment here. So I wonder if she’s there and I’m sure she remembered that. So anyways, it was a great night, and also got a chance to really get to know you. So for us that don’t know you and do not know your company. Can you tell us a little bit about it?

Tom 6:00  

Yeah, of course. So my name is Tom. I manage the International Business Development team, and have done that for three years now, which is going extremely quickly and what does the company do? Well, we’re accounting and business consultants. Ultimately, our mission as a company is to really help entrepreneurs and eCommerce sellers that are looking to expand their business, and essentially help them with the VAT taxes, Sales tax, GST, whatever it might be, when looking at the new opportunity in that marketplace. So I’m trying to simplify everything in bite sized chunks, whilst making sure that we offer a very high level of consultancy, and being able to assist sellers all over the world and we’ll be doing something silly like 50 countries are trying to promo the 10,000 clients and over 20 languages and everyone asked me what languages I speak just the one, which is very disappointing I know, I’m sorry. But in terms of who we are, and what we do, we assist companies worldwide to help with their expansion objectives that are happening with that sort of VAT, registration and compliance services.

Norman  7:14  

You brought up translation and we always talk about, making sure that you use professionals. That’s one area where you want to use a translator, I got just a quick story for you. We were printing some cards up and so for this one company, and the company said that they would take care of the Spanish translation. I’m in Canada, I would take care of the Canadian, or the French and the English, of course and the cards went out. These were New Year’s and Christmas cards. Well, we started getting complaints about the Spanish translation. It was Happy New Year. Sorry. Merry Christmas and Happy New Ass. No, we got no, of course we were blamed for it. Right. Oh, of course. But anyways, we got them to sign off. So always remember to sign off, to make sure that it doesn’t fall back on you. But anyways, let’s talk about this is a really great topic today and one of the things that I’ve noticed when I talked to a lot of different Amazon sellers, that they think .com is it and when I’ve gone to events all over, if I’m in Europe, or this really kicked in when I was at an Israeli conference, and with Toma Rabinovich at his top conference, and we were talking to all these people over there and people were saying, Oh, yeah, like, I’m a million dollar seller, only in Europe. I don’t want to go to .com and you hear more and more of that sort of mentality where a lot of the European sellers think that there’s less competition over in the EU and why bother because it’s so competitive over in .com and on the other side of it, there’s a lot of .commerce that don’t realize the potential over in Europe because they think it’s a hard and arduous task. Why don’t we talk about that? Do you think this is still the case?

Tom 9:27  

Absolutely. I think, yeah, it’s, it always seems to be whenever you speak to a seller wherever they’re sort of Incorporated, wherever they’re from, they know the tax system, that’s what they used to and but when they start looking at other marketplaces, even the slight change in terminology from sales tax to VAT, not going to touch it scares people often. It’s amazing really because I speak to so many different sellers all around the world on a daily basis and the basics stay the same, you still have those thresholds in place, you still need to know the same guidelines on expanding. But just very slight tweaks in the different marketplaces that are available. But definitely agree with that. Yeah.

Norman  10:16  

So if you could give us just a couple, one, two threes, about how hard is it to set up? If I want to go to the EU right now, start selling, what are a couple of things that I’ve got to keep in mind?

Tom 10:35  

Yeah, of course. So it depends on a number of different things. But I would say as a US based seller that’s looking to expand to the EU. Well, firstly, the first thing that people trip up on is whether they need to actually establish a new entity in the EU or UK and you don’t, it’s so straightforward, you can actually use your US entity to set up a VAT number in the EU and that’s what you need to be able to actually start storing your stock there. So firstly, you don’t need to incorporate a new subsidiary or a new company In the EU, you can use your current company. I would say number two is sales tax and VAT are very similar but they are also very different, which I know is a little bit confusing. But the reason I say that is because when you look at sales tax, sales tax is added at checkout and it’s not incorporated during the sale price, whereas VAT is incorporated within the sale price. So making sure that when you’re looking at the competition and looking at your opportunity visibility online, it’s very important to understand that that sale price is inclusive of tax at 20% VAT, that value added tax, which is the equivalent to the sales tax in the USA and then another very common thing that people need to realize when expanding into the EU, is yes you need a VAT number wherever you’re storing your product similar to physical Nexus. But you’ve also got the benefits of thresholds in place when you trade from one country to another. So don’t think from the start that you need to have all of your VAT numbers in place, before you can actually start selling in the EU, you can actually have just your VAT number in let’s say, Germany, and then you can take the benefits of selling from Germany into France, Italy, and Spain, and so on. So it’s actually much much easier than people think as long as you get a company like Avask or one of the other providers out there to guide you on that step by step as to what you actually need to think about before you get to the marketplace and before you start selling.

Norman  12:48  

There is a threshold before you have to start paying VAT tax, what is that threshold?

Tom 12:56  

So there’s a number of things that could be referring to there. So as a US client, for example, that’s looking to start selling in the UK or EU, which I’m sure will come on to later with Brexit and all things concerning that. But ultimately, what you need is a VAT number as soon as you start storing products in that country. Okay, so that’s the main thing, similar to physical Nexus, as soon as you’ve got your stock stored there, you’re going to need to have that sales tax number. in terms of looking at what is actually required, or looking at the threshold, as you said, and that’s you’re going to incorporate as a UK or maybe German or French company, for example, to the UK and you incorporate a UK entity, which I would say very, very unlikely that a seller would want to do that. Then there are some tax benefits, such as the 85,000 threshold before you need to register for VAT. Usually that is for UK residents. But in the main, it’s important to realize that if you are a US set up looking to expand UK or EU market, it’s very, very straightforward and all you need is that VAT number and he already knows that which will allow you to send your goods in, pay your goods at customs where you pay the duties and the import VAT, and then you’ll be able to start selling cross border from that. That’s as straightforward as it is.

Norman  14:25  

So I had a client last year who did an absolute 100% No, no. He didn’t pay his tax and if you think you’re in the US and you don’t have to pay that tax, he got dinged almost 800 over 800,000 pounds. Right. So he got away with it. I don’t know how or why he would do it. But then, he was trying to figure out how he can either close his business or it didn’t make sense like he would go under. But anyways, that happened and if you’re trying to hide, just like you are, if you’re doing that with the IRS, it’s not a matter of time at that. I mean, it’s just a matter of time, they will catch up. It’s not, you can’t hide. I just wanted to, I just noticed that we’ve got a bunch of people on here, and I just at this point, just wanted to give a cute few shout outs out so hard for me to read. Kelsey, if I missed anybody, let me know. I see. We have Gila on, Yarrow’s back on. Timmy’s back on. Hey, glad to see you. You were able to get back on I haven’t seen you in a little while and Alan, I’m expecting Alan to pipe up. He’s in Singapore, I think today. But anyways, if any of you have any questions for Tom, let me know now. It looks like Tom’s

Kelsey 15:55  

I think he’s just adjusting.

Nor man  15:57  

Oh, okay. 

Tom 16:00

I’m back.

Norman  16:00  

Alright. You got me a little worried there.

Tom 16:05  

I was running low in chips. So I thought I’d just top her up.

Norman  16:10  

No problem. So the next thing I like to talk about is there’ve been changes and I want to get into the changes. But what are the tax requirements when expanding into the new market?

Tom 16:25  

Yeah, so tax requirements. We’ve touched on them very lightly, that, I would say, in terms of sort of general rule of thumb is, what are the tax requirements when you’re looking at expanding into the UK and EU, UK? Well, there’s two main reasons why any seller will need to register for VAT in the EU and this is what you need to do if you’re looking to start selling and I’m sure that some people out there listening that already said it. So the first thing is that if your products are stored in the UK, or in an EU country, then you’re going to need to register for VAT as soon as you actually have your product stored in that country. That’s number one. So wherever you’re storing, you’re going to need to register for VAT. Now with the UK and EU, again, coming on to Brexit a little bit later. But what you’re able to do is is making the most of what’s called the distance selling thresholds, okay and all that means is when you sell cross border from one country to another, money country to another, and what these thresholds actually allow you to do, is they allow you to, let’s say, I’m going to hold my, say I’m selling iPhone cases. I’m going to sell them on amazon.com doing really well and thinking of expanding to the EU or what are the next steps? Well, I’m going to need to make a shipment from let’s say, ship from China, I’m going to be shipping them to Germany. Okay, so what do I need at this stage from sort of a VAT and tax point of view? Well, firstly, I need an EORI number and e o r i, which is a number that allows you to clear your goods at customs. That’s number one. Without that your goods aren’t getting in. So yeah, don’t bother unless you’ve got it. Once you’ve got the EORI number, you’re going to need to have a VAT number in case of course, which comes alongside your EORI, which will allow you to then store your goods in Germany in this case, okay. Now, as soon as you’ve got that VAT number in Germany, you are required to file on a monthly basis by a certain date in each country and that differs from country to country, which is what your tax advisor will make sure that they monitor and stay on top of for you and ultimately, it’s just a case of then filing the VAT in accordance to the sales that you make the case. So there’s two taxes and break them down very, very quickly or three really, when you bring your products from China into Germany, you’re going to pay two taxes as you import. Okay, so one is an import VAT, which will be the percentage of the country that you’re important to which in this case 19% VAT in Germany. So you’ll pay 19% import VAT on the cost value of your goods at that point and you’ll also pay customs duty, a very similar situation to shipping anywhere around the world, you’ll have that duty element. So that import VAT and that import duty is calculated from the cost value of goods as you bring your products into Germany and then once you’ve got them in Germany, of course, you’re going to start making sales. So let’s say you sell all of your products, you’re going to be paying 19% sales VAT on those transactions that you sell and you’re basically acting as a tax collector for the authorities in that country and then you’re going to be required to file that VAT and pay the VAT to the authorities because you’re acting as an Tax Collector. Now, that’s not it, because you are able to reclaim the import VAT that 19% as you came in at customs with your EORI, we’re then able to reclaim that and offset that against the sales VAT due. Okay, so hopefully that’s broken that down a little bit.

Norman  20:18  

I think that was really clear. I do have a question about when I’m bringing in products. So let’s say I’m bringing in my soap. So, this just happened in Canada. So I got nailed for labeling. So my actually, right now most of my product is suspended because of the labeling this just happened and if I’m going over, if I want to sell my soap over in Europe, are there certain things that I have to look at before I can actually, you’re talking about importing, but I’ve got to, like, if I just sent over my soap right now, would it be turned away? Or how do I know what type of information I need to add to my labeling or the product specs that have to be on my product that I want to sell over there?

Tom 21:11  

Yeah, it’s really good question and a lot of sellers don’t do some of that due diligence before they actually expand to a new market and there’s like that sort of checklist of things that you need to cross off and I would say label compliance and understanding sort of the requirements of what’s in my product is actually safe and eligible to be sold in this market. So I mean, we work with a lot of partners across the border that are able to assist sort of with that labor compliance and setting up and in terms of making sure that your products are able to be sold and so we work with a company called Graebel eCommerce experts that a lot of our clients use with regards to labeling and just general compliance and there are sort of certain products that may be classed as dangerous in some way, that might be illustrated in perhaps like a CE marking and in some cases, you may need a representative and so that your products will be compliant. So that if the government for example, was to say, Well, we’d like to inspect this, then there needs to be some sort of place of fulfillment, maybe that’s a 3PL provider, which is what GE global e commerce experts offer, and lack of registered address to that product, so that there’s actually one on shelf that that they’re able to inspect. So really important that you get that product compliance. The majority of clients that we speak to have already understood, whether their product is going to be sold. Good example there, soaps and different sorts of moisturizers and things can sometimes be a little bit, I will be a little bit more cautious when expanding into new market bases, just make sure you do a bit of research on the codes there. But feel free to reach out to us on a case by case and we can go through that.

Norman  22:55  

I guess it’s pretty important too, depending on your product, you’ve got to do some audience research as well. If one of the things that we did, just to give you an example, and it has nothing to do with Europe, but Japan. So we have the soap, we can sell it in North America, no problem. But when I lived in Hawaii, I noticed that there were a lot of Japanese and they would be buying anything Hawaiian, anything Hawaiian. They love Hawaii and so what I targeted was the Japanese audience loving Hawaiian soap or Hawaiian product, packaged it completely differently, sold it over in Japan, and a $10 bar of soap. So now look, it’ll be swapped with everybody. But it ended up being $24 to $30 for a bar of soap and people loved it, because it came from the US but particularly Hawaii. Now I could have done that and packaged it a completely different way and we would have probably failed. Just because I knew that. So I think it’s very important even going over there. Just because you’re going over to Europe, doesn’t mean you’re going to be successful. You do have to know your audience and is that something like if somebody went to you to your company and said, like, this is my product, I’ve got these Norm the Gnome gnomes, do you think it would fly? Would you give your opinion on that?

Tom 24:29  

Well, I’d buy them.

Norman  24:30  

Wow. I’ll give you the ASIN right now.

Tom 24:34  

Yeah, I think it’s something that will always happen to have an open conversation about there was and it really depends on the product, right and obviously, we’re happy to give an opinion. We know our market. We live in the UK, but there’s also the rest of the EU, Italian, French, German, Spanish, and I can’t speak for all of them, unfortunately. In terms of sort of product research. Knowing your business, knowing your numbers, of course, and also just understanding, and what would be well received in each market is extremely important. Which is why we always encourage sellers to bring over a number of ASINs to Europe, when they do come not just putting their number one in the US, because you really want to test the market, you want to get a good understanding for what sells well, where and so a lot of people will tend to sort of dip their toe in the water such before they then really start going in on sort of the advertising and making sure that they’ve got everything set up and really pushing hard. So I would say it’s definitely a case of easing in. But in answer to your question, and we would hate to say no, that wouldn’t sell well, they sell and it does sell well. We don’t want that on us, but always happy to give our opinion on what they’re selling and if I see a product that’s awesome, I think so really well. Of course.

Norman  26:00  

The other thing I’d be looking at too is for sellers, is there a bottom line? Okay, you shouldn’t even look at Europe or expanding. I know what I tell people like you got to optimize .com before you start looking elsewhere. But is there a number like if you’re not doing $20,000 a month, don’t bother looking or 10,000? I don’t know, is there a number or a rough ballpark that people should be looking at in the .com arena before they start selling over there?

Tom 26:37  

Well, I get asked these questions so much and of course, it’s a difficult question to answer because there’s no right or wrong answer, right? However, and there’s a number of things that I’ve put this down to and yes, revenue or turnover in the US is really important before you actually expand. So I think it comes down to Yes, do you have the capital to invest in getting your products here with the shipping with the VAT numbers, the compliance translations, all those sorts of things that you need to bear in mind before you get there and I would say typically, sellers that are sort of turning over three bottom lines of three, $400,000 per annum would be sort of that lower benchmark in terms of expanding to Europe. Saying that some people have been very successful, lower. But a lot of people that seem to be generally sort of a couple of hundred thousand plus are starting to be where sellers tend to be before looking at expanding. But you can look at that in two ways. Because when you look at trading in the UK and EU, there’s a number of different tactics you can take. I speak to a seller that’s turning over 50 million in the US and they’re looking to start launching in the UK and EU, my advice would be very different to someone that’s turning over, as you say, like to 10,000 a month, for example, because you can, as I said before, you can sort of dip your toe in the water and start with one country and trade under the distance selling threshold into the others. Or you can go absolutely, full guns blazing and you can register for VAT and all of the countries and have that Prime eligibility if you want Amazon FBA, and have the quicker shipping the local or the local fulfillment fees instead of sort of cross border fees. There’s a number of different advantages from going all the way. But it’s also much heavier costs. So I would say in answer to your question, I would say yes, and sellers tend to have that benchmark before they expand. But it depends on resources, it depends on sort of the capital, it depends on the time that they’ve got to actually invest in the research and all of the other things that come alongside it.

Norman  28:54  

Okay, and you were just talking about, again, multi-country. The benefits of registering or working with Pan-European, so we can take advantage of. Because you don’t have to take advantage of it. But what are the advantages of being registered to use Pan-European?

Tom 29:18  

Yeah, absolutely. Yeah. So take a step back to go forward. So what we’re referring to here is with FBA, all about fulfillment, of course, it’s all about where your products are stored and now if you look at the technical term is EFN versus MCI and how to use sort about how many countries are storing it. So if you look at an EFN service, which stands for European Fulfillment Network, as we go back to the example I used earlier with Germany. You bring your iPhone cases in from China, you get cleared at customs, you’ve got your product stored in Germany, then if you under the EFN means your products are just stored in Germany and you’re selling cross border into France, Italy and Spain, which is the great thing about Europe because it’s got multiple marketplaces within the EU within that territory, unlike the US. So you’ve got multiple different countries to sell to, under the threshold. Everyone has a different sales threshold, most common is 35,000 euros per calendar year. But what that allows you to do is only have tax compliance requirements in just the one country. So you only need to register and comply with the taxes in Germany until you breach those thresholds. Now, on the other side, if you look at Pan-European, the Pan-European means that you’re storing your stock in really six countries post Brexit or seven, including the UK currently. So you send your products into Germany, Amazon, or eBay, or whatever country you pick for that matter and then Amazon will then redistribute your products across the other countries, the UK, Germany, France, Italy, Spain, Poland and Czech Republic make up what’s called the Pan-European program. Benefits of that, compared to the EFN is, well, if my products are in Germany on the EFN, and I’m selling to a buyer in the UK, it’s gonna take a hell of a long time to actually get there. Whereas if my products are already in the UK, because Amazon has already distributed them across their network, it’s going to be much quicker. So it’s prime eligibility and you also pay the local fulfillment free through FBA and if you are already in the country, as opposed to selling from Germany to the UK, which cross border fee or Germany, Switzerland, whatever it might be and so they’re the two main benefits, I would say and obviously, there’s hundreds of millions of prime subscribers out there. I’m one of them, I filter by Prime, if your products aren’t on Prime, I’m not going to see them, because I want the next day delivery. So you’re really cutting your market off unless your products are close enough to your buyers, which is where the Pan-European program comes into effect.

Norman  31:58  

Great. Just one sec. I know I was gonna cough.

Tom  32:05  

I was talking for a bit longer than you.

Norman  32:06  

Yeah, just five seconds more. Okay. So, all right. So Kels, can we talk? There’s two questions, I think.

Kelsey 32:15  

Yep. So one is a comment from Timmy. Guys, due diligence is needed when claiming to sell in a new territory, stuff like names on labels, which has different meanings, which might be offensive in another language. So I think that’s pretty fair to say, do your research.

Tom 32:32  

Definitely. On the translation side, it’s so important to get right as you said, No, read your cards and translations. A lot of people will go on the cheap side and the Google Translate. Translation isn’t sort of our forte as a company. But it’s part of the journey that we take people free because it’s essential to get right. Yes, you can use Google Translate, I wouldn’t advise it. But there are some companies out there that are very competitive, that will do everything for you and you’ll find that your sales will be boosted because of having a localized language and I’m sure you’ve had Jenna on from why IoT?

Norman  33:07  

Yeah, she’s coming. But I was just gonna say that that’s where you should go. Just talk to Jenna and Kelsey, we’ll post that at the bottom here for translation. I mean, that’s the person to talk to. Google Translate, if you’re trying to do it on the cheap, even if you hire somebody from Fiverr, there’s certain words that Oh, they’ll go for five bucks, they’ll go to Google Translate for you. But you have to make sure you translate it properly, or things can get lost. But anyways, yeah, let’s make sure that we put Jenna’s contact information at the bottom. 

Kelsey 33:51  

Yep and the next one is from Marina. I don’t sell directly to consumers in Europe. But I have an online store in France that buys wholesale from me and resells. Do the same rules apply? Is there anything I should be aware of so far as just shipping products to not registered anywhere?

Tom 34:10  

Well, okay. I mean, there’s quite a lot of things that come into play when looking at and that sort of dark bar, sorry, directly buying through wholesale as well. So but then directly, don’t sell directly to consumers in Europe by having an online store in France that buys wholesale from me and resells. Okay, so the rules are very similar, but it really does depend on a number of different things. So what I would recommend on this one is to reach out to us separately so that we can understand a little bit more about your situation, and where they’re selling to and what the requirements are. Obviously, that registration is required if you’re physically holding stock in a country and that’s really, really important. So you may need to register, but where your structure might be slightly different from sort of a standard eCommerce, and selling direct to consumer and then that may slightly differ from the advice that we give, but feel free to reach out to myself and we can take that on directly. 

Norman 35:13

Very good.

Kelsey 35:15  

Okay, and one just came in from Yarrow. If I have a listing with 200 reviews in the US, can I use it in the EU? Will the reviews be shared forever and timely added from all the marketplaces?

Tom 35:28  

Great question. So with reviews previously, and I have to say previously, I’m not 100% right now. But previously, let’s say four, so four to six months ago, it was the case that when you had US reviews, and you launched in the EU, your reviews did follow. Now, I don’t know whether that’s still the requirement or still the process now. But I knew that certainly for a certain period of time, it would be a requirement, and would be the process that Amazon would follow and that can be reflected in some new marketplaces I’ve heard happens in Australia as well. But that’s the process as far as I’m aware and before it didn’t happen. But previously, and as in recently, I have seen that happen, but you might need to double check that.

Norman  36:22  

Okay, and I just wanted to remind everybody that in a few minutes, we’re going to be giving away an incredible prize, the biggest prize we’ve ever given away in podcast history. So anybody that’s listening, if you’ve got friends, go out, get them, make sure they’re listening and also, Tom is going to be hitting some of the most interesting topics in the next few minutes and that is the changes. What is happening with Europe right now with the changes to tax and with Brexit?

Tom 36:56  

Absolutely. So I’m waiting for this question and it’s always an exciting one for everyone. Of course, Brexit, I’m sure everyone’s familiar with Brexit and obviously, the UK is leaving the EU, we’ve been through a transition period out of this year and we are officially, obviously the UK will be a separate entity from the EU as from the 31st of December. So first of January 2020, we will be separate. Okay. So as you’ve probably noticed, what I’ve gone through a lot of these examples, I’ve been very cautious with the countries I’ve used on the basis that the UK is going to be separate. So if you think that, especially for those people that are listening to the podcast today that are selling already from the UK into the EU, that’s the most common theme that we see people use the UK, it’s easy to register, it’s easy customs clearance, it’s easy to distance sell into Germany, France, Italy, Spain and so from that point, a lot of people are relying on Amazon FBA from the UK under the European Fulfillment Network, which is where your distance selling into Germany, France, and Spain, which before or before the end of this year is absolutely fine. As we come on the first of January, and moving forward from there, it’s really, really important that everyone understands the FBA. So Amazon will not be fulfilling orders from the UK cross border into the EU. That’s the main point, okay and vice versa, from the EU, to the UK. So I want to touch on a few points on that and also give you a couple of actionable steps off the back of that, that you can take away and make sure that you stay compliant when you do expand or whether you have expanded. So with that in mind, obviously there’s a new customs border that has arisen from the UK to the EU. So if you’re sending an item from any country to any country, let’s say the UK to keep us in Germany, then as you send that product directly to a consumer in Germany, that product is going to be liable to import duties and import VAT as well. Okay, now that input VAT is reclaimable if you’re VAT registered in the country that you’re selling to, so there’s benefits with registering countries that you’re selling most stock to. But what the main point of all of this is how do you prepare and this is sort of more of the actionable steps. Well, first of all, you’re going to need an additional VAT number if you haven’t got it in ready. So let’s say hypothetically most people watching are going to be already registered in the UK, you’re going to be wanting to sell to the EU. How do you go about that? Well, you need an additional VAT number in the EU. So let’s pick Germany, you register for VAT in Germany. Well that takes a couple of months minimum. So bear that in mind with where we are in the year. Prepare yourself again. Get ready, make sure you pick a country that’s maybe a bit quicker than Germany. Although it’s the largest market in the EU, maybe it’s France, maybe it’s Italy and then what you need to do is split your inventory, speak to your shipping provider, make sure that they send some stock into the UK to cater for the UK. It’s its own country, its own marketplace. There is no inventory transfers, there’s no cross selling, so you need to have the UK catering for itself and then you need to have shipments going to the EU as well, to make sure that you have the EU catering preset and remember the same FBA rules apply that sort of MCI pan EU cross border fulfillment, when you’re in the EU still is operating and the pan EU program is still operating. It’s just not from the UK, because the pan EU, and that European film network is all about the EU, which the UK no longer be part of. Okay, so it’s really, really important that everyone understands that. So the additional VAT number or two VAT numbers one in the UK, one in the EU as a minimum, okay, or more. The second point is the EORIs. So the EORI number, when we track back to the start, we talked about what an EORI number is good is a number that allows you to play your goods or customs. You probably already have one, if you’re selling already, you’re going to need an additional one, that will be sufficient for the EU. If you’ve already got one in the EU, then you’re going to need one in the UK. So it’s vice versa. So let’s say again, that you’ve got a UK VAT number, you go to your UK EORI number and currently you’re trading just fine. What are you going to need? Well, you’re going to need a German VAT number or VAT number in another country and you’re going to need an EORI number to be able to clear those goods because you’re splitting shipments. Okay. So hopefully that breaks it down as to how to prepare for Brexit in the best possible way. There are also a number of other changes that are coming with regards to sort of Amazon, potentially collecting and remitting for non UK businesses as well and there’s a lot of information that still gets to fold out from that and plus, there’s more changes in July 2021, which is very exciting, which really just make taxes easier. So don’t need to worry about that.

Norman  42:12  

Very good. I see Timmy sent over another question, Kels?

Kesley 42:16  

Oh, yeah, he’s just saying things are going to be different post Brexit definitely and there’s definitely going to be clauses that sellers need to be aware of going forward and we are at the almost 45 minutes in so we should get into the giveaway.

Norman  42:33  

So first of all, I just want to talk about your company a bit. Let’s talk about some of the services that you provide.

Tom 42:43  

Yeah, of course, I mean, now our core services, and some where the majority of the business that we do with entrepreneurs are obviously in the UK and EU, that’s our main focus. So UK companies or anywhere, really, they’re looking to expand into other markets, but mainly UK, Germany, France, Italy, Spain, and Czech, I’m sure you probably know that Amazon have obviously opened up in Sweden, the Netherlands. Ireland is another country that potentially has a marketplace coming into the near future. I don’t know that for sure. But we presume so. As well as others as well. So we’re assisting VAT registration, and also compliance services in those countries. So that’s our core business areas. But we also have our UK accounting. So if you’re looking to incorporate a UK company, you’re looking for a sort of that bookkeeping accounting side, then we can deal with that. We also have the US accounting. So if you’re a US business, and you want a CPA that’s dealing with your accounts, your bookkeeping, all of it. The statutory requirements that obviously need to be filed, then we can also assist with that and also sales tax lucky us, we get to deal with both VAT and sales tax and so definitely the EU, UK, definitely the USA. I would also say sort of the other marketplaces on Amazon, the majority that we deal with. So things like and looking at our UAE, Australia, and Saudi Arabia, and the list goes on and I’m sure that if you’ve got a specific requirements, specific country that you’re needing assistance in, feel free to reach out to us, I’m sure we’ll be able to either help you, we’ll be able to have a service offering for you, if not be able to point you in the right direction. So there are of course taxes.

Norman  44:29  

Very good. Where did the name Avask come from?

Tom 44:33  

It’s a great question. It’s one that I’m still trying to work out myself and actually personally, I got asked on another podcast about a month or so ago saying What does Avask stand for and I was sort of like, I need to find that out. But I don’t actually, I think, it definitely has a meaning behind Avask. But it’s one of those mysterious names for now that we’ll have to find out more and upstage.

Norman  45:01  

But you could easily just make up the story. Right?

Tom 45:04  

Well, I was going to, but it might have been an insult.

Norman  45:10  

So how do people get a hold of you?

Tom 45:13  

So, I mean, I’ve Avask website. I’ve also got some great resources as well as I once mentioned, for any kind is with us we have a website called the globalexpanders.com, and which is loads of webinars, industry experts coming on similar sort of thing to this podcast or different people coming on, which is great and but in terms of how we actually get through this company website, please email myself at tom.meek and my name is the on screen @avaskgroup.com. Otherwise, we have expansion at fastgroup com. Basically type in Avask to your Google or whatever search engine you are using and make an inquiry through that and we will get back to you pretty much immediately.

Norman  45:55  

So that’s A V A S K guys. All right. Tom, tell us about the incredible, like when we asked Tom at the beginning of the podcast, so hey, is there anything that you can do and I thought, Okay, he’s going to send over some lapel pins or t-shirts. Anyways, he says, Yeah, we could do this, and my mouth dropped. Why don’t you? I’ll let everybody know how you can claim this prize. But why don’t you tell everybody about the prize, as well as the kind of value? The rough ballpark value of the prize?

Tom 46:38  

Yeah, cool. So you want me to free the offering the promotion? 

Norman 46:41

Yeah, please. 

Tom 46:42

Yeah. Awesome. So, obviously, from anyone that’s watching this now, it’s a bit of a race to who comes through. But so for the first person that comes through to tom.meek@avaskgroup.com, we’ll offer 100% off VAT registration costs, which, depending on the amount of countries that you go to can add up to a sizable amount, which I’ll come on to in just a second. So the first person that comes through is 100% off VAT registration. The next five people that come through, are going to have 50% off VAT registration and as we’ve discussed, depending on the amount of countries you go to, that can be anywhere from, say 250 pounds, right the way through to 1750. So 1750 pounds saving if you were to go for that full penny you package and so that’s for the first person that contacts me, I’m sure. I know. I thought I was already getting an email through there. But I wasn’t.

Norman  47:40  

I was gonna say if they post it in the comments section, just all they have to say is Avask 100, 1st person here gets it. How’s that?

Tom 47:51  

That’s even easier, even easier. 

Norman 47:56

Avask 100.

Tom 47:58

Avask 100 is the code, first person 100% off and the second, third, fourth, fifth, sixth get 50% off. So looking forward to having some people come through and yeah, just mention the code. So, you have the list at the end and we can take it from that.

Norman  48:12  

All right. Oh, look. Simon, you’re always so quick.

Tom 48:19  

Simon, give everyone else a chance.

Norman  48:20  

Come on. Oh, man. All right, we’ve got some others coming through and Yarrow, you just have to do it once. Anyways, look, like we said, this is an incredible prize. This is up to about 1750 pounds and the five other people are getting 50% off. If you want to take part in that, again, just Avask 100 and we’ll just send the winners over to you, sir and also, they’ve got your email, but we’ll do it here. So Kelsey, let’s tally this up. I think we got everybody.

Kelsey 49:06  

So we have Simon coming in first.

Norman  49:09  

Congrats Simon.

Kelsey 49:10  

I’ll send over the info for that. 

Norman 49:14

Does Yarrow win five times?

Kelsey 49:16

Yarrow had some trouble. Also, Tom, I know you have to get going. So if you need to get going, I can let you know all the information.

Tom 49:24

I’m okay. But I just wanted to say that because it’s been such a brilliant podcast, and I really appreciate you guys inviting me on. We’re happy to extend it further and so if you guys want to say that the next 10 people, we’ll offer the 50% off cuz I’m feeling extra generous now. So feel free to keep going guys keep getting your Avask 100 and we’ll look after you, I’m sure.

Norman  49:50  

Oh, that’s a great deal. That’s a really great deal Tom. So, Hey, thank you for coming on and all of a sudden my computer’s installing something. But anyways, yeah, thanks for coming on the podcast today. I’d love to have you on again, especially when the changes are happening. When is it? It’s July next year, we could start talking about that the next time we’re on the podcast. But there’s all sorts of other things that I’d like to talk to you about anyways. So thanks a lot. I know you got a call that you got to get on to, and we really enjoyed having you on.

Tom 50:24  

Fantastic. Thanks very much for having me Norm, really good to be a part of it and yeah, I’ll speak to you soon.

Norman  50:29  

Say hi to the team for me.

Tom 50:31  

Of course I will, of course. 

Norman 50:33

Alright, see you later. 

Tom 50:34

Have a good one. Speak soon.

Norman  50:35  

Bye. All right, so guys, it looks like hey, Melanie, you still have to put in the Avask 100. It looks like you got your 100. But just put in Avask just to make it official.

Kelsey 50:54  

Right now we have Simon, Allen, and we have Yarrow.

Norman  51:02  

Yeah and Melanie, we’re gonna slip Melanie in there too, because she did give the Woohoo. Just needed the Avask. All right. So that’s it for today’s podcast. Let me see, if you are looking at checking out the whole podcast, you can always go to Norman Farrar, a.k.a The Beard Guy and listen to the whole podcast, highlights and other types of content. We’ve got a newsletter that comes out, which really does not suck. Just go over to Lunch With Norm Or you can go over to normanfarrar.com and just sign up. It comes out every Monday. It’s all content. It’s all content to help online sellers become better sellers. So it’s not just Amazon, it’s  right across the board. It also has different clips and video clips that you can watch in case you don’t want to read. Let me see our next guest. Our next guest Kelsey? Whose that? It’s Christy.

Norman 52:10  

It’s Christy. Is that right?

Kelsey 52:11

Yep.

Norman 52:14

Kirsty Verity is coming on. So if you guys don’t know Kirsty, you got to tune in. She lives in Montreal now. So a fellow Canadian. But hey, I really love this lady. She is great, full of energy. She’s gonna be just talking about becoming an entrepreneur, how to be a CEO and run your business like a business. We don’t talk a lot about that and I think it’s really important that we do treat our businesses like businesses, especially if it’s smaller, medium sized businesses. But anyways, we’re gonna be diving deep with Kirsty, and we’ll talk about that. So Kelsey, do we have anything more?

Kelsey 52:55  

All right. So if you enjoyed the episode, please like and share it. There’s still time for the contest. If you did win, so Simon, you can contact me at k@lunchwithnorm.com. Maybe you can see me in the email just to make sure that I went through and that goes with anyone else that’s typed in Avask 100. So Alan, Yarrow, I’ll put in Tom’s email here. So you can go ahead and email him and I’ll let Tom know that, Simon, you came first and we’ll see how generous Tom is afterwards and yeah, I hope you guys enjoyed the show. We do have our Facebook group, Lunch With Norm Amazon FBA & eCommerce Collective and we are looking for moderators. So if you want to kind of help us out and come up with ideas,

Norman  53:55  

Discussions.

Kelsey 53:57  

Discussions, advice for the group, just let me know. You can message me on Facebook or my email k@lunchwithnorm.com and it looks like Alan, I can’t believe Alan is up. 

Norman 54:12

Go to bed Alan. These are recorded.

Norman  54:16  

He wants those prizes. 

Norman 54:18

Yeah, that’s right. 

Kelsey 54:19

But yeah, we really appreciate it and if you ever have any tips or advice for us to make this a better podcast, you can always reach us by my email again, k@lunchwithnorm.com. Yeah. Thank you guys.

Norman  54:34  

I do want to just talk a bit more about that group. So the group is about discussion. The group is really, hey, we can put up all the funny posts you want. That’s great like them, but at the end of the day, it’s really becoming a better online seller. So you can open up the discussions, Kelsey might post something, a poll or whatever. I know that today, we just got another from Sponsored Profit. We got another bonus that we’ll put into the group and that’s 50%. I just got it today. So 50% first month, 10% ongoing for their new semi automatic app, which is very cool. So that’s going to be posted. I haven’t even told you, Kels. It just came in, but these are the types of things that will be happening. There’s again, no affiliates in the group, but we want you guys, what are you interested in? Ask questions. Start talking, give your opinions, post articles, stuff that we can share with everybody. We want this to be an incredible group. Congrats Kels, you grew this. I think we were at about 200 people in the last month and we’re doing this all organically. We’re not trying to get any paid people to come in. We want people that are just strictly interested in the group and interested in engaging. So that’s about it for today.

Norman  56:10  

Yep, that’s it. I’ll shut up. I just go on too long. Anyways, tune in. Kelsey, do you want your allowance?

Kelsey 56:21  

Well like $10? 

Norman  56:22  

No. It’s 2 remember? Anyways, tune in every Monday, Wednesday, Friday, at noon Eastern Standard Time and guys, thanks for watching. Thanks for being part of the community and enjoy the rest of your day.