Introduction
Selling through Amazon can give brands and sellers access to a huge global marketplace, but operational rules, cost structures, tax implications, and payment processing are not uniform across regions or countries. Two of the biggest markets for Indian sellers are Amazon India (amazon.in) and Amazon US (amazon.com). While they are both considered marketplace models, three important differences will directly affect pricing decisions, profitability, cash flow, compliance, and reconciliation workflow demand.
This blog will help sellers identify these three differences in simple, practical terms of business on both platforms, including what benefits exist in the US, and where India needs to include more caution and cost planning.
1. Customer Order Patterns and Payment Methods
Amazon India
Amazon India provides:
- Prepaid Orders
- Cash on Delivery (COD)
While COD is common in India because of habitual behavior and trust, it has a detrimental effect on cost and efficiency.
Effects of COD on Seller Operations:
- High Return-to-Origin (RTO) shipments if customers reject orders at delivery.
- Higher rate of cancellations, particularly cancellations prior to dispatch.
- Delayed payment, since the settlement of COD will take time to appear.
- Loss of cost for packaging and shipping with undelivered orders.
- Difficulty forecasting working capital or continuing the inventory cycle.
Common scenarios in India:
- A customer places a COD order impulsively and changes their mind afterwards.
- The customer is not reachable when the delivery attempt occurs.
- The customer refuses to receive the order as it is not up to expectations.
This complicates Amazon India’s operational process.
Amazon US
- Only Prepaid Online Orders are permitted in Amazon US.
- There is no Cash on delivery in the US marketplace.
Advantages of Prepaid-Only Model:
- Only Prepaid Online Orders are permitted in Amazon US.
- There is no Cash on delivery in the US marketplace.
- Extremely low RTO & Cancellation Rate.
- Very few failed deliveries.
- Faster and predictable payment cycle.
- Lower logistics inefficiencies.
- Stable customer behaviour patterns exist.
US consumers are generally comfortable making payments online and have a well-established culture of return policies, but COD still has a significant impact on streamlining operations.
2. Fulfillment and Logistics (FBA vs Non-FBA)
Fulfilment is the process of pricing a product based on the ease of storage, shipping, and delivery to the consumer.
Amazon India FBA (Fulfillment by Amazon)
- FBA is zone-based, which means delivery fees vary by region, but storage and shipping fees are based on the product’s weight and dimensions.
- If a customer returns the product, then reverse logistics charges will apply.
- If the seller transfers inventory interstate, then GST will be owed on the value of the inventory plus e-way bill compliance.
- Sellers must also monitor packaging weight accuracy to prevent overcharging the consumer.
- Changes in product category or differences in cubic weight can limit a seller’s profitability.
All of these factors complicate inventory planning, as well as cost management.
Amazon US FBA
- The fulfilment network in the US is larger, automated and optimised to fulfil Prime delivery standards.
- Inventory can be placed across multiple locations for quicker service times.
- Expanded agency processes are less labour-intensive than intensive ones in India.
- Domestic GST paperwork does not necessarily slow down domestic and international operations processes.
- Processing returns for consumers is more efficient because of the codification of systems.
Advantages of Amazon US FBA:
- The speed of check-in time at the warehouse.
- They are moving stock for operations smoothly.
- The customer trust with regard to Prime-labelling products is higher.
- The speed of delivery from suppliers allows for a better buy-box.
Overall, the FBA expected results and models will translate forward more smoothly and more efficiently in the US compared to India.
3. Payment Reconciliation: Charge Structures and Accounting Clarity
Amazon India Payment Reconciliation
Sellers must monitor a myriad of charge categories, including the following:
- Referral Commission Fee
- FBA Fee / Easy Ship Fee
- Weight Handling Charge
- Pick & Pack Fee
- FBA Storage Fee
- Return / Reverse Pickup Fee
- Reverse Commission Deduction (for any returns)
- Amazon Advertising Charges
- Listing / Subscription Charges (for limited categories)
Challenges in India:
- Charges can differ depending on the region, weight slab, and category.
- A small difference in weight/dimension (that is entered) can lead to a significant excess cost deduction.
- Sellers will need to provide strict accounting checks in order to minimise margin leakage.
- GST will be reconciled on a monthly basis with great caution.
Reconciliations will be complicated and time-consuming in India.
Amazon US Payment Reconciliation
The Amazon US marketplace, meanwhile, has a much more simplified and clearer mechanism for cost deductions, which are typically:
- Referral Fee (percentage per category)
- FBA Storage Fee
- Fulfilment / Shipping Fee
- Advertising Spend (optional)
There are no reverse commission charges on returns, since there is no cash on delivery available.
Benefits of US Reconciliation:
- Easier to model margins with
- Fewer hidden costs
- Easier accounting and monthly financial reporting
- Clean reconciliations, more audit-friendly and easy for scaling in the US
4. Taxation, Duties, and Compliance Requirements
Taxation in Amazon India
- To sell goods, sellers will be required to register for GST.
- GST is applied to the value of products sold.
- Returns must be submitted on a monthly and quarterly basis.
- There may be TDS applications based on your business use structure.
- Regulations required at the state level for operating warehouses in various states can add complexity.
So, taxation, as a whole, in India is paperwork-intensive and recurring.
Taxation in Amazon US
- According to state rules, Sellers have to assume responsibility for US Sales Tax (analogous to VAT).
- Indian Sellers takes payment in USD, which is subsequently converted to INR.
- The seller is required to get an FIRC (Foreign Inward Remittance Certificate) to serve as proof for accounting.
- If the goods are exported, against a B2B Export Invoice in addition to customs, sellers can claim: Duty Drawback Benefits and reduced import tax burden and may qualify for export incentives.
Taxation in the US marketplace is more flexible and has fewer compliance cycles.
5. Onboarding Requirements for Sellers
To Sell on Amazon India
Necessary Documents:
- GST Certificate
- PAN + Aadhaar
- Bank Account
- Proof of Address (Any)
- Optional Trademark (advised for brand registry)
Setup is quick, but long-term compliance is tedious.
To Sell on Amazon US
Necessary Documents:
- Passport or National ID
- Bank Account that supports foreign transactions (ex, Payoneer/Wise/Indian Bank)
- Credit or Debit Card
- W-8BEN Form (disclaims non-US taxpayer)
- Trademark (e.g., only needed for B2B registry)
The onboarding process is straightforward with correct documentation, and once you thoroughly review it, you can run your business without any issues.
6. Profitability Considerations
Amazon India Challenges:
- High returns related to COD
- Complex fee structure
- Frequent logistics and weight discrepancies are common
- Selling at a lower average selling price erodes profit margin
Amazon US Advantages:
- High average selling price
- Customers are willing to pay a premium to receive quality and brand value
- Returns and cancellations happen at a lower rate
- Simplified cost and taxation implications
Overall, Amazon US is typically more profitable and stable for long-term private label development.
Conclusion
Amazon India opens up access to an enormous and diverse market, but the operational complexities, the prevalence of returns from COD sales, the multi-layered fee structure, and strict taxation oversight can make it difficult for sellers to maintain a strong bottom line. In general, Amazon US has a cleaner payment model with more manageable returns, better average selling prices, and an easier accounting process.
When analysing long-term scaling, in many instances, Amazon US has a cheaper and more profitable marketplace compared to others. They seem to be much more accommodating to growing pains than other marketplaces, especially if you are selling on Amazon private-label or are exporting products that also have duty drawback benefits.
That said, through carefully managed pricing, weight management, inventory forecasting, and strong reconciliation discipline, sellers are still able to operate profitably in the Amazon India marketplace.
Choosing the most appropriate marketplace for you is contingent upon your business objectives—but understanding the differences will help you to maximise any opportunity!
Final Thoughts
Amazon US provides a cleaner payment model, lower return rates, higher average selling prices, and easier accounting practices.
When considering long-term scaling potential, Amazon US is often the cheaper and more profitable marketplace to operate on and is more favourable for growth potential – especially when selling private-label products or exporting products that typically have duty drawback benefits, etc.
Frequently Asked Questions (FAQs)
1. Can an Indian seller sell on Amazon US without a US company?
Yes, Indian sellers can sell on Amazon US as an international seller and do not have to form a US company.
2. Does the US marketplace have Cash on Delivery?
No, Amazon US only accepts prepaid orders.
3. Does everyone selling on Amazon US need GST?
No, GST is only a tax for sales in India.
4. How do I get paid from Amazon US?
You will be paid in USD, and then it will be converted to INR, then transferred to your bank account.
5. What is FIRC, and why do I need it?
As a seller, you will need an FIRC (Foreign Inward Remittance Certificate) to verify your foreign revenue to be export compliance.
6. Can I take export incentives when selling on Amazon US?
Yes, if shipments are exported to FBA centres in the USA under B2B export invoices.
7. Is fulfilment better with FBA in the USA?
Yes, FBA in the US is more automated, efficient and scalable.
8. Do I need a trademark to sell in the USA?
You don’t need a trademark to sell on, but you will need a trademark to enrol in the Brand Registry program to protect your brand.
9. Why is Amazon US more profitable than Amazon India?
Because the sale price is higher, returns are lower, and reconciling accounts is easier.
10. Which marketplace shows better prospects for long-term growth?
For most private label and export sellers, the Amazon marketplace in the US will generate stronger long-term growth.
✅ Need help?
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