How Ukrainian businesses can enter Amazon and Etsy
Registration, payments, certification, and legal protection for Ukrainian sellers on Amazon and Etsy.
November 09, 2022
As we mentioned earlier, e-commerce holds a very strong position in the overall Ukrainian retail market, not only due to large businesses but also small and medium online markets, which are mostly concentrated in social networks such as Instagram, TikTok, etc.
Yes, TikTok is also a profitable platform for entrepreneurs, but that’s not what we’re discussing now.
Let’s imagine a situation. An entrepreneur has been selling their product through Instagram for quite some time, expanding their staff, and realizes that the time has come to scale their business.
However, the idea of scaling does not leave them, and this is where marketplaces come into play.
Amazon and Etsy — are the online versions of shopping malls, but known worldwide. Marketplaces gained the most popularity in 2020 during the pandemic and daily increased their user base, namely potential customers. Analysts predict that by 2024, marketplaces will generate more than 54% of all online sales on the Internet.
Advantages of marketplaces:
- no need to invest money in creating your own online store;
- high level of traffic to the site/platform and loyalty of potential customers due to worldwide popularity;
- established communication mechanisms with customers;
- availability of necessary tools for promotion and launching online sales, as well as for order processing;
- ability to enter the international sales market without attracting additional investments and registering a business abroad;
- availability of real customer/buyer reviews that are moderated by the marketplaces;
- ability to analyze the product range and pricing policies of competitors.
Of course, advantages cannot exist without disadvantages. Among the disadvantages, the main position is occupied by competition and the inability to individualize one’s brand compared to having a personal website, as the marketplace will always take precedence.
Features and requirements for registration.
Amazon — in the e-commerce sector, this marketplace is compared to the popularity of Google. This comparison is deserved, as most of the marketplace's customers go directly to Amazon, bypassing the Google search engine. Amazon enjoys high demand due to the implementation of advanced ideas compared to other marketplaces. Such ideas include the FBA program, Amazon Dash, warehouse automation, delivery of goods by drones and airships, renting out e-books, etc.
- Legal aspect. During registration, store owners agree to arbitration for dispute resolution. Under these circumstances, the platform accepts complaints about rights violations but does not take on the obligation to resolve conflicts.
Before starting the registration process for a store on the Amazon platform, it is essential to pay attention to three main categories: trademark, copyright, and patents.
If, after reading this sentence, you immediately thought: “I’m fine since I ordered a logo design from designers and received rights from them; there won’t be any problems,” we hasten to assure you that this is a mistaken belief. You can only be sure if you undergo a check through the USPTO (United States Patent and Trademark Office) database with the help of lawyers.
However, even with a successful check, the risk of theft of your logo design or receiving a complaint regarding violations of third-party copyrights does not disappear.
2. Registration. You can register an account on the platform as a Ukrainian sole proprietor. During registration, you need to enter information about your sole proprietorship, including full name, identification code, product data, registration address, and information about the product that the account owner intends to sell.
This platform has no restrictions on selling goods from Ukraine.
3. Product. Amazon specializes in selling new products. Certain categories and products are subject to rules that must be followed and should be studied carefully before starting sales.
4. Certification. To sell children's products, food, medicines, dietary supplements, fertilizers, and cosmetics, certificates are required (Child Product Certificate, FDA, GMP).
5. Logistics. The FBA (Fulfillment by Amazon) program is designed to facilitate the delivery and storage of goods by registered sellers on the marketplace in their own warehouses. Additionally, thanks to this program, Amazon takes on a significant portion of the burden of order processing and communication with buyers. If the number of orders increases, it’s better to diversify risks: secure yourself with the help of third-party delivery services.
6. Payments.
There are several ways to withdraw funds from an Amazon store for Ukrainian businesses, such as connecting to the Payoneer or TransferWise payment systems.
Payoneer. The payment system is an official partner of Amazon and accepts payments from the platform online. The owner of an Amazon store, upon opening an account with the payment system, has the opportunity to order a card to Ukraine and withdraw funds to the sole proprietorship (or LLC) account after connecting such a payment system to the Amazon store.
The payment system attracts users with its ease of opening accounts.
The withdrawal period is from 3 to 5 working days. The payment system charges a certain fee for its services:
- 3.15$ + 1.8% (bank fee up to 4%) — USD from the card through the bank's cash register;
- 3.15$ + 1.8% — USD from the card at the ATM;
- 3.15$ + 3.5% — UAH from the card at the ATM.
TransferWise. Has a different system for withdrawing funds compared to Payoneer: withdrawing funds from the Amazon store to a multi-currency account and then to a card. To open an account with the payment system, you need to pass a tax check and provide confirmation of the absence of tax residency status in the USA.
The withdrawal period, like in Ukrainian banks, takes no more than 10 minutes and has no restrictions on the transfer amount.
Fees:
- from 10 EUR 0.43€
- from 100 EUR 1.38€
- from 1000 EUR 10.84€
Before starting the registration of an account on Amazon, we recommend familiarizing yourself with the following documents and policies of the service, as using third-party services to sell your product still remains a game with rules:
- Selling Policies and Seller Code of Conduct (the main rules of Amazon);
- The Fulfillment by Amazon program.
Etsy — the most popular marketplace specializing in selling handmade and vintage goods.
- Registration. The marketplace has currently halted the registration of new stores/sellers from Ukraine due to the lack of access to the Etsy Payments payment system. A list of countries eligible for the payment system can be viewed here.
Currently, Ukrainian stores affected by the service's restrictions operate through intermediaries or by opening entrepreneurial activities abroad.
Conducting sales through an intermediary on the platform is necessary only for receiving payments and withdrawing funds. This scheme of operation is the most popular and acceptable to avoid registering entrepreneurial activities independently abroad.
2. Product. Despite Etsy gaining popularity through handmade products, the service has restrictions and warnings regarding other types of goods or components of handmade products, which can be reviewed here.
3. Documentation. For the store to pass moderation by the Etsy service during registration, it is necessary to prepare a Privacy Policy adapted to the service's requirements.
4. Logistics. Shipping packages from Ukraine is done using any operators, but most often sellers use the services of Ukrposhta. More information about the E-export program from Ukrposhta can be found here.
Additional materials and policies of Etsy:
Opening a Ukrainian store on marketplace platforms opens many prospects and helps to get closer to the desired results of scaling the business. However, such a step into the international online market requires careful preparation. By the way, the Digilaw team already has experience working with world-renowned marketplaces, as well as with the protection of intellectual property rights and the registration of trademarks, patents, etc.