Amazon FBA (Fulfilment by Amazon) remains one of the most popular ways to sell products online in the UK. Whether you're a local entrepreneur or an international seller, this guide covers everything you need to know about starting and running an Amazon FBA business in the UK in 2026.
2026 Fee Reduction
Amazon has announced one of their largest-ever fee reductions for 2026, lowering fees by an average of £0.15 per unit sold in European stores. Good news for FBA sellers!
What is Amazon FBA?
Fulfilment by Amazon (FBA) is a service where Amazon stores, picks, packs, and ships your products. They also handle customer service and returns. You focus on sourcing products and marketing; Amazon handles the logistics.
How FBA Works
- You source products and ship them to Amazon's UK fulfilment centres
- Amazon stores your inventory in their warehouses
- Customers order your products on Amazon
- Amazon picks, packs, and ships the order
- Amazon handles customer service and returns
- Amazon pays you (minus fees) every two weeks
Benefits of FBA
- Prime eligibility – Your products show "Prime" badge, increasing sales
- No warehouse needed – Amazon stores your inventory
- Customer trust – "Fulfilled by Amazon" builds confidence
- Scalability – No logistics constraints as you grow
- Multi-channel – Can also fulfil orders from other platforms
Requirements to Sell on Amazon UK
Account Registration Requirements
- Business email address or Amazon customer account
- Chargeable credit card (international cards accepted)
- Valid passport or national ID for identity verification
- Company registration details (if registering as a business)
- VAT number (if VAT registered – required for most FBA sellers)
- Valid phone number
- Bank account for receiving sales proceeds
Business Structure Options
| Structure | Pros | Cons |
|---|---|---|
| Sole Trader | Simple setup, less admin | Personal liability, less credibility |
| Limited Company | Limited liability, tax benefits, professional image | More admin, Companies House filings |
| Partnership | Shared responsibility | Joint liability, can be complex |
Recommendation
Most serious Amazon sellers operate as a Limited Company. It provides liability protection, potential tax advantages, and a more professional appearance to suppliers and customers.
Amazon Seller Account Plans
| Plan | Cost | Best For |
|---|---|---|
| Individual | £0.75 per sale | Fewer than 40 items/month |
| Professional | £25/month | 40+ items/month, serious sellers |
Setting Up Your UK Company for Amazon FBA
To sell on Amazon UK as a business, you'll need:
1. Register Your Company
- Register with Companies House to get a Company Registration Number (CRN)
- Choose a company name that reflects your brand
- Appoint at least one director
- Provide a UK registered office address
2. Register for Corporation Tax
- Register with HMRC within 3 months of starting business activity
- Obtain your Unique Taxpayer Reference (UTR)
3. Open a Business Bank Account
- Required to receive Amazon payouts
- EMIs like Wise, Revolut, or Payoneer work well for international sellers
4. Verify Identity with Companies House
- Under ECCTA 2023, all directors must verify their identity
- Can be done via GOV.UK (biometric passport) or through an ACSP
VAT & EORI Requirements
VAT Registration
Important
If you store goods in the UK (which FBA requires), you typically need to register for UK VAT regardless of where you're based. This is true even if your turnover is below the £90,000 threshold.
When VAT registration is mandatory:
- You store goods in the UK (FBA inventory)
- Your UK taxable turnover exceeds £90,000
- You expect to exceed £90,000 in the next 30 days
VAT basics for Amazon sellers:
- Standard VAT rate: 20%
- Some products have reduced (5%) or zero (0%) rates
- You charge VAT on sales and can reclaim VAT on business purchases
- Quarterly VAT returns via Making Tax Digital
EORI Number
If you're importing goods into the UK (from China, EU, etc.), you need an EORI number (Economic Operators Registration and Identification):
- Free to apply via HMRC
- Processing time: 5-10 working days (can be longer)
- Required for: Customs declarations, import/export documentation
- Format: GB + VAT number + 000 (e.g., GB123456789000)
Amazon FBA UK Costs Breakdown 2026
Startup Costs
| Item | Cost Range |
|---|---|
| Company formation | £50-150 |
| Initial inventory | £500-5,000+ |
| Product photography | £100-500 |
| Branding/packaging | £200-1,000 |
| Shipping to Amazon | £500-2,000 |
| Total typical startup | £2,500-5,000 |
Ongoing Amazon Fees
| Fee Type | Amount |
|---|---|
| Professional seller subscription | £25/month |
| Referral fee | 8-15% of sale price (varies by category) |
| FBA fulfilment fee | £2-5+ per unit (size/weight dependent) |
| Storage fee (standard) | £0.75-2.40 per cubic foot/month |
| Storage fee (peak Oct-Dec) | Higher rates apply |
2026 Fee Reductions
Amazon has reduced FBA fulfilment fees by ~£0.15/unit on average for 2026. Check the current rate card for exact figures by product size.
Guide for Non-UK Residents
Non-UK residents can absolutely sell on Amazon UK. Here's what you need to know:
Option 1: Form a UK Limited Company
- Most recommended approach
- Non-residents can be directors and shareholders
- Need a UK registered office (virtual office is fine)
- Must verify identity under ECCTA
- Register for UK VAT (required for FBA)
- Get UK EORI for imports
Option 2: Sell via Your Home Country Entity
- Possible but more complex
- Still need UK VAT registration
- Still need UK EORI
- May face additional compliance requirements
Banking for Non-Residents
- Traditional UK banks rarely accept non-resident applications
- Use EMIs: Wise Business, Revolut Business, Airwallex
- Payoneer works well for receiving Amazon payouts
Supplier Verification
If you're sourcing from China, verify your suppliers before placing orders. Check their business registration, factory ownership, and track record to avoid scams and quality issues.
Step-by-Step Setup Process
-
Form your UK company
Register with Companies House. Takes 3-24 hours online.
-
Register for Corporation Tax
Submit CT41G form to HMRC. Required within 3 months.
-
Open business bank account
Apply to EMIs like Wise or Revolut. Usually 1-3 days.
-
Register for VAT
Apply via HMRC online. Allow 2-4 weeks for VAT number.
-
Apply for EORI number
Required if importing. Free via HMRC, 5-10 days.
-
Create Amazon Seller Account
Register at sellercentral.amazon.co.uk with business details.
-
Source products
Find suppliers, negotiate terms, verify their legitimacy.
-
Create product listings
Professional photos, optimised titles and descriptions.
-
Ship inventory to Amazon FBA
Follow Amazon's prep requirements and labelling guidelines.
-
Launch and optimise
Monitor performance, adjust pricing, build reviews.
Key Takeaways
- Amazon FBA fees are reducing in 2026—good news for sellers
- UK Limited Company is the recommended structure
- VAT registration is usually required for FBA sellers (storing goods in UK)
- EORI number needed for importing products
- Non-residents can sell on Amazon UK with proper setup
- Budget £2,500-5,000 for typical startup costs
- Verify Chinese suppliers before placing orders
Ready to Start Your Amazon FBA Business?
Form your UK Limited Company through our partner 1st Formations. Fast incorporation, ACSP identity verification, and packages tailored for e-commerce sellers.
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