Amazon, the global e-commerce giant, has been continuously expanding its global market share. To further expand its business, Amazon acquired Souq, an e-commerce platform headquartered in Dubai. This transaction marks Amazon’s official entry into the Middle East and North Africa market. Souq claims to have nearly 80% of the online retail transaction share in the region, a figure that is enough to show the huge potential of the Middle East market.
Amazon’s entry into the Middle East market has not been smooth sailing. Similar to the Indian market, the Middle East market also has various restrictions and challenges. In this article, we will take a deep look at the account opening conditions, charging model, services and training, and logistics methods of Amazon Souq in the Middle East market to help sellers better understand this market.
1. Account opening form.
To become a seller on Amazon Souq, there are currently two main ways:
1. Provide a scanned copy of the UAE business license, a UAE bank account number (the information must be consistent with the business license, which can be a company account or a personal account of the legal person on the license), and the contact person’s email and mobile phone number. Send the above information to the email address of the Souq investment manager, and you will be able to open a Souq seller account for free. It should be noted that the email address of the Souq investment manager ends with the domain name “amazon.com”.
2. Open an account through an agent authorized by Souq. Souq has officially authorized a number of account opening agents, mainly FBS (Fulfillment by Souq) logistics carriers recommended by the Souq platform. Sellers can use the UAE business license and bank card information provided by the agent to open an account, and there is no account opening fee (mainly for continuous binding of logistics cooperation). The required information includes contact information, phone number, email address, domestic business license, e-commerce platforms that have been settled in, and links to self-operated independent stations.
Once the seller account is successfully generated, you will receive an activation link in the registered email address. After clicking the link, you can reset your password and set the store name, bank account number, VAT number and other information in the seller interface. It should be noted that once the store name is set, it cannot be changed again. In addition, the bank account number and VAT number must be consistent with the business license information. Accounts registered through account opening agents will be bound using the information provided by the agent.
2. Account opening conditions.
Before becoming an Amazon Souq seller, there are some account opening conditions that need to be met:
1. Document requirements: You need to have a UAE business license or a UAE ID.
2. Goods requirements: You need to have spot goods in the UAE to ensure that you can cooperate with Souq to pick up goods within three days.
3. Bind bank card: If you use the UAE ID to open an account as an individual, you must bind your UAE bank card. It should be noted that there are restrictions on the sales categories of personal accounts, such as beauty and electronic products.
4. Bind bank account: Accounts registered with a business license must be bound to a bank account related to the company or one of the legal persons of the business license in order to withdraw money. Whether it is a personal account or a company account, it is impossible to bind a domestic bank card for collection, only UAE bank cards are supported. The account registered through the account opening agent will be bound to the bank account of the agent’s local company in the UAE. When the seller needs to withdraw money, first withdraw the funds to the agent’s local bank card in the UAE, and then transfer the funds to the bank card designated by the seller.
3. Charging model.
It is free to open a store on Amazon Souq, but when selling products, sellers need to pay some fees, including order service fees, commissions and value-added tax.
1. Order service fee: Each order needs to pay an order service fee of AED7.5. If the order amount is less than AED50, the fee will be waived.
2. Commission: The commission rate is based on the sales price of each product, and the commission rate is between 5% and 20%. The specific rate depends on the category of the product. It should be noted that the price of Souq already includes value-added tax, so when collecting commissions, an additional 5% value-added tax will be generated. Sellers registered in the name of an account opening agent will use the tax number of the account opening agent for unified tax payment. Considering that goods may be shipped from the UAE to other countries, the tax situation in each country may be different, so sellers need to understand the tax regulations of multiple countries in the Middle East.
Fourth, logistics.
Amazon Souq currently offers two main logistics models, similar to Amazon’s Fulfillment by Amazon (FBA) and Fulfillment by Merchant (FBM):
1. FBS model (Fulfillment by Souq): This is the official warehousing and distribution system. The seller’s products are stored in Souq’s official warehouse. Once an order is generated, Souq will be responsible for outbound delivery and delivery to the buyer. The usual delivery time is 3 working days. Return processing is also the responsibility of Souq officials.
2. Self-delivery model: In this model, sellers need to store products by themselves, and after the order is generated, Souq’s logistics company will pick up and deliver the goods at their doorstep. The usual delivery time is also 3 days.
Amazon Souq provides sellers with convenient logistics options, and they can choose the appropriate method according to their needs and business model.
In summary, Amazon Souq, as an important player in the Middle East market, provides sellers with the opportunity to enter this market with great potential. Although there are some restrictions and challenges in the market, by understanding the account opening conditions, charging models, services and training, and logistics methods, sellers can better prepare and plan their business on Amazon Souq. The Middle East market has great potential, and for sellers seeking global expansion, Amazon Souq is undoubtedly a platform worth paying attention to.