Shipping from US

Pros

• Low cost option
• Only pay a referral fee (no FBA fees, etc.)
• You won’t pay Europe’s value added tax (VAT) on the sale. In Europe, the sales tax, or VAT, is built into the seller’s advertised price, not tacked on after. The advertised price a European consumer sees is the price they pay, tax included.

Cons

• Long lead time to get shipments from US to Europe, which may deter buyers and will not allow you to obtain the Prime badge
• Customers may be responsible for paying Europe’s value added tax (VAT) on the sale, of imported merchandise. Ordinarily, for goods bought and sold within Europe, the VAT would be built into the advertised price.
• Risk providing a poor customer service experience between shipping and customs issues.

Shipping from Europe (you store your merchandise in a European country)

This option allows you to ship products and store them at one European warehouse location.

Pros

• Only pay a referral fee (no FBA fees, etc.)
• Shorter shipping time to customers since the product is already in Europe and not overseas
• Can possibly apply for Seller Fulfilled Prime if you can absorb the extra expenses involved with getting it to your customer within two business days (i.e., your merchandise is Prime eligible without using FBA).

Cons

• Expensive to get started. High setup costs and overhead involved with shipping to an EU fulfillment center or warehouse from outside of Europe. You must establish a fulfillment center or warehouse, and contract with someone in Europe to fill the orders for you.
• You are responsible for making sure the VAT gets paid. As the tax implications between the EU and UK are constantly changing we recommend talking with a tax expert to ensure that you are up-to-date on these changes.
• If you want to be Seller Fulfilled Prime, you must register for it. Approvals can be complex

Fulfilling Orders: How Does Amazon FBA Work?

Amazon offers fulfillment options utilizing their FBA European Fulfillment Network (EFN), FBA Pan European, or FBA Multi-Country Inventory. Keep in mind that FBA Pan European may be the path of least resistance, and preferred by most sellers, depending on your seller objectives.

Shipping with FBA European Fulfillment Network (EFN)

This fulfillment service and shipping option allows sellers to sell across the border between the UK and Europe easily without having to register for VAT in the destination store.

Pros

• No setup fees for the warehouse, fulfillment network, third-party logistics, etc.
• Fast delivery – shipping is within Europe
• Inbound your products into one country but you are able to fulfill orders across borders in all of the UK and Europe.
• Prime eligible
• FBA fees are typically lower than third-party logistics
• Amazon support for customer service. Helpful when dealing with foreign languages.

Cons

• Cross-border fees (customs) apply from your home country to other countries, adding a complex layer of details to your fulfillment spend.
• At this time it is unclear where you need to be VAT registered. We recommend talking with a tax expert to ensure that you are up-to-date on these changes.
• Although still, Prime eligible, non-home country deliveries take up to three days longer

Shipping with FBA Pan European

This fulfillment service option enables you to send stock to one fulfillment center (warehouse) in a country of your choosing from which Amazon Europe will re-distribute that stock to areas where the most demand will be, per Amazon’s algorithms. It is possible the merchandise will be distributed among all distribution centers in all of the EU (from FBA warehouses located in Germany, France, Spain, and Italy). The UK is no longer part of FBA Pan European.

Pros

• FBA fees are typically lower than third-party logistics
• Inbound shipping costs remain low
• No cross-border fees (which can be quite pricey)
• Fast delivery in all markets
• Prime eligible
• Good for sellers who are unsure where in the EU their best market for certain items may be

Cons

• Each country has different referral and FBA fees but not a huge difference in percentile points
• Need to be VAT-registered in multiple countries

Shipping with FBA Multi-Country Inventory (MCI)

FBA MCI allows sellers to ship products to multiple FBA fulfillment centers across multiple countries. Generally, this option is for sellers who know exactly where in Europe is their best market. For example, garden tools will sell better in the UK than they will in Spain, since more people, per household, actively garden in the UK, etc.

Pros

• FBA fees are typically lower than third-party logistics
• Full control of what country holds inventory
• No cross-border fees
• Fast Prime delivery

Cons

• Higher inbound costs for shipments into each warehouse directly, or for paying a third-party logistics service to split up and deliver your inventory (unlike the above Pan European option where Amazon handles this, it falls to you with the MCI option).
• VAT registered in multiple countries (inconsistent FBA fees)
• Cost of shipping to multiple EU fulfillment centers

The 4 L's of Selling Overseas

Localization

• Currency differences between Euros (mainland Europe) and Pound Sterling (UK)
  • If you operate at tight margins, consider the foreign exchange costs even if it is only a percent or two.
• Differences in metrics. Do the proper conversions in your product descriptions (centimeters, grams, etc.).
• Categories and category labels may be different per region.
  • Make sure you place your item in the correct category.
  • Differences in lexicon. Certain words do not mean the same thing in different countries. Ensure you know the different terms.
  • Example: Pants in the US are long pants. Pants in the EU are often underpants (underwear). Trash bags = rubbish/bin bags in the EU.
  • If you sell electronics, consider the different plug types.
  • Keywords need to be altered to suit the local lexicon

Language

• You will need to translate information into the correct language in Europe.
  • Not always mandatory, but helps increase conversion rates.
  • This includes keywords, description, title, and bullets.
• Amazon offers expert translation services, for extra fees, as an option.
• Customer service
  • If you fulfill orders yourself (seller fulfilled), you will need to be able to provide customer service in the customers' home language.
  • Amazon FBA Customer Service is available to you if you utilize FBA. This means Amazon will handle your customer service, thus taking care of the language barrier.

Legislation

Having a lawyer on your side when selling on Amazon Europe is crucial to ensure you have covered all legal aspects and rights for selling your product.

• Make sure your intellectual property rights extend from the US to the UK and EU.
• If you have exclusive distribution rights for selling in the US it does not mean you can sell the UK and Europe.
  • There might be another company with exclusive rights for certain European regions.
• CE markings (the abbreviation of French phrase "Conformité Européene" which literally means "European Conformity”) is a mandatory marking system for certain products in the UK and EU arena.
  • Toys, medical devices, and low voltage electronics require this marking/testing.
• EU consumer rights differ in the US, UK, and EU
  • There are many cancellation and warranty differences.
  • If you sell through FBA, Amazon covers and takes care of these consumer rights.
  • If you sell FBM, you are responsible for compliance with these consumer rights.
• UK and EU directives apply to small electronic devices
  • You need to adhere to and agree to regional recycling and disposal laws.
• Product compliance and restricted products
  • Each country has different compliance and restrictions.
  • Toys, medical devices, and certain electronics
• VAT (Value Added Tax)
  • Inclusive (included in retail price)
  • Different from the US where you pay sales tax at checkout and it's added to the retail price
  • The individual seller is responsible for filing VAT returns, declaring sales tax, and invoicing your VAT.
  • Consult a tax adviser due to different variables with VAT, where you register, your legal selling thresholds per country, etc. Consider them having them manage all aspects so you are legally abiding by all UK and EU laws without heavy research or prior knowledge.
  • VAT varies in each country.

Logistics

• Packaging
  • UK and Europe often require specific labels that are mandatory under legislation on certain categories; usually, this applies to food products and apparel.
  • The more you translate and help customers, the better. Instructions/leaflets should be translated as well; the more languages, the better. This helps to minimize your return rate.
  • You’ll need to be familiar with international shipping, imports, and customs processes. For this reason, it may be beneficial to partner with a company that can manage your logistics thus making sure your product gets imported correctly from beginning to end.
  • Storage and order handling; you need to decide how you want to proceed. Will you be handling shipping in-house, with a third-party logistics company, or utilizing Amazon’s FBA?
  • Products cannot be returned to the US. Everything needs to be returned to a UK and/or EU address because Amazon won’t pay to send it back to the US. This is important for those with high retail value items for which disposal is not an option for returns. Keep in mind that refurbished items can still be resold.

Get Organized to Sell on Amazon Europe

Getting everything lined up and organized is important in order to avoid a myriad of extraneous warnings and fees. If your procedures are clear it could lead to major setbacks such as Amazon locking up your inventory, holding your money, suspending your account, etc. Don’t let it scare you off because it is a huge marketplace, with huge potential but the key to success is due diligence.

Expanding your Amazon marketplace to include Amazon Seller Central Europe is an exciting opportunity and potentially lucrative. Proceed with caution and considerable forethought. Ensure you have the structure and resources in place to make it work.

Amazon also put together a helpful guide that runs through preparing to sell on Amazon Europe. This guide to global selling has advice for preparing to sell, registering, VAT, and more.

Awesome Dynamic provides Amazon consulting services to Amazon sellers selling in North America and wanting to expand globally. Schedule your free consultation to get started today.