Prepare Your Business for International Shipping in 6 Steps
If you’re ready to grow your business with cross-border eCommerce, then this post is for you....
If you’ve been wondering how to sell in Europe with Amazon, you’ve come to the right place. With its customer reach potential across 26 countries, new sales stream opportunities for sellers, and complete logistical services and tools, Amazon’s European marketplaces are fast becoming popular for eCommerce entrepreneurs looking to scale up their business.
The good news is that anyone can sell in one or all of Amazon’s European marketplaces. The bad news is that it can be pretty complicated. You must meet local tax requirements and provide product info and customer services in the local language while meeting Amazon’s performance level requirements.
Even though it can be an elaborate process for those sellers who haven’t dealt with the bureaucracies and guidelines that selling in the EU presents, it also offers a considerable selling opportunity if you’re ready to expand to the continent with 340 million shoppers.
To help you navigate the process, we put together this step-by-step guide on how to sell in Europe with Amazon.
Amazon has five marketplaces in Europe, including the UK, Germany, France, Spain, and Italy. Although there is the option to use one seller account for all five marketplaces, you will need to decide from the start which marketplace you would like to choose as your ‘home’ marketplace. This will also help you determine many legal and logistical steps along the way.
To make this decision, you should ask yourself:
To get you started, here’s a summary of the main advantages of the two most popular entry markets.
Pro Tip: Start with one market rather than launching in all five at once. If you’re from the US or another English-speaking country, we suggest starting in this marketplace order: UK, Germany, France, Italy, and Spain.
While deciding on your marketplace, you should consider each country's legal and tax implications and the fulfillment options. However, your research work is just beginning once you have narrowed down your home marketplace.
When selling in the EU, there are a few legal obligations to consider, generally as well for each country. These include:
As you can see, there is a lot to consider. Our advice would be to hire a business lawyer specializing in international law and third-party accounting and shipping companies to help you with VAT, registrations, and customs. If you only have a few products you want to start selling in Europe, forking out budgets for the latter may be too steep a task. You can go at it alone in the beginning before you grow, but you need to ensure you’ve researched each of the listed obligations for the country you’ve chosen as your home marketplace. Here’s a complete list of Amazon Europe Tax and Regulatory Considerations from Amazon to start you off.
Next, you will need to research Amazon Europe’s fulfillment options and decide on the right one for you. If you want to expand your selling to Europe, you have two main fulfillment options: FBM and FBA. Here’s a summary of each.
You may be familiar with FBM (Fulfillment by Merchant) from selling in your current Amazon marketplace. The option is also available to you as an Amazon Europe seller. This means that you either ship from your current country or Europe using third-party storage and distribution centers. Each has its disadvantages:
FBA from your current warehouse is ideal if you need to ship minimal quantities and want to test the market, but if you’re set on FBA and have a few products, we recommend FBA Europe instead. If you get a good deal from a third-party distribution center in a European country, you could use FBM and save on costs. But it is important to note that doing that would mean that you would not be eligible for Prime, as your products would not be stored in Amazon’s warehouse.
Amazon offers three FBA options in Europe: EFN (European Fulfillment Network), MCI (Multi-Country Inventory), and Pan-European FBA, each of which will have its advantages and disadvantages. Choosing between them will depend on your budget, selling goals, and resulting distribution needs. Here’s a summary of each.
EFN enables you to choose one EU distribution center to ship from, meaning your products will be stored in one of Amazon’s fulfillment centers and distributed across Europe. Orders from all five marketplaces will be packed and shipped from this center. Therefore you only have to send products to one country’s Amazon fulfillment center and will have Prime eligibility.
If you want to store your products in multiple countries’ distribution centers, then MCI is for you. MCI gives you control over which products you want to be stored and shipped from which country. The significant advantage of this fulfillment option is that you can distribute from areas closer to your customers, providing faster shipping and saving on cross-border EFN fees.
Pan-European FBA offers you the most simple when it comes to fulfillment in the EU and is perfect for those sellers wanting Amazon to handle everything for them. With Pan-European FBA, after sending your products to one of Amazon’s distribution centers, Amazon will automatically distribute throughout the EU based on expected demand. This will save you the hassle and money with Amazon helping you avoid cross-border fees. Get started with Pan-European FBA.
Pro Tip: Whether you’re shipping yourself or using a third-party shipping company such as First Choice Shipping (who will handle customs clearance and get stock to the Amazon warehouse), you can save costs and time by shipping bulk to FBA instead of paying customs on smaller inventory amounts.
Once you have decided on your home marketplace, researched your legal obligations, and decided on your Amazon EU fulfillment strategy, it’s time to register for your EORI and VAT numbers. An EORI number is your Economic Operator Registration and Identification, which is applicable for FMA sellers that enable them to import goods into Europe. Unless you plan on having meager profit margins, VAT numbers are suitable for both FBM and FBA sellers to allow you to add the required consumption tax to every product you sell.
If you’re planning to start selling in only one country, you must register for VAT in that country from the beginning. However, you may need to register for VAT in multiple EU countries as you expand.
Let’s say you’re selling in the UK and begin to branch out to other countries; you will need to charge local VAT until you reach the VAT registration threshold for the additional counties you’re selling in. Thresholds differ from country to country; for example, for the Netherlands, Luxembourg, and Germany, the VAT threshold is €100,000, while the UK threshold is £70,000, and France only has a threshold of €35,000. If you met the sales threshold in all 27 countries, you would need 27 VAT numbers - one for each country. The VAT percentage and exemptions will differ per country as well.
In short, it can be a highly complex affair, and we recommend that when selling in Europe with Amazon, you hire a European accounting firm to help you manage all of the above.
You also can’t afford to mess with your pricing. You should ensure the correct VAT is added to the right products in the country you’re selling to, so use apps such as StoreAutomator’s multi-channel product data management, which will allow you to add the correct percentages per channel. Additionally, we recommend you consider apps like Payoneer to help you handle VAT payments (and international selling).
This brings us to the next step…
When selling in Europe with Amazon, you must consider how you will receive payments. You can either use Amazon’s payment tools, which will pay you into your home country bank account, or online transfers and payment apps like World First or Payoneer. Payoneer opens Euro bank accounts on your behalf. The former can result in a loss of income from currency exchanges.
The latter will give you more flexibility with accepting payments as it means not having to open a separate bank account in every country you sell in and helping you manage your VAT payments abroad. Here’s Amazon's step-by-step guide to setting up Payoneer payments in Seller Central.
Next, you will need to consider your product prices for the European market, as it will come with a host of additional fees that you will need to consider, including VAT, outbound shipping, customs, and fulfillment (FBA and FBM) fees. A good Amazon Repricer tool will help you adjust your listings per channel to ensure you are not eating into all your profits.
When adding your products to a marketplace, you have to keep in mind that not only do your listings need to be in the language of that country, but your support, reviews, and customer service will need to be, too, if you want to be a real competitor.
This is less of a concern for those who opt for FBA, as Amazon provides 24/7 customer service in the country’s home language. If you’re choosing FBM, you will need to hire customer support teams or outsource to help supply service in the required language. With regards to product listings, whether you choose FBM or FBA is irrelevant; you will need to get your listings translated.
Important note for sellers from English-speaking countries looking to sell in the UK: Although the UK is English-speaking, spelling and other language nuances will differ. This is less of an issue if you’re from South Africa or Canada, but US English speakers will need to consider spelling and colloquialisms. We recommend getting a content guru to help you edit your product descriptions.
Your final step is to list your products on Amazon EU marketplaces and get cracking. When you’re listing products, you can
Don’t forget to optimize your Amazon product listings for each marketplace!
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Nicole is an eCommerce business blogger, Small Biz consultant, and content managing wizard with over 16 years of experience. She runs on a healthy dose of caffeine and enthusiasm. When she's not researching the next content trend or creating informative small business content, she's an avid beachgoer, coffee shop junkie or hanging out on LinkedIn.