As an Amazon Seller, what do you do when you think you’ve “tapped out” of the market on Amazon.com? You could design and release new products, sure. But why not leverage the winning products that you already have in a new market that’s hungry for innovation?
Just like in the US, Amazon offers their FBA program in Europe and the UK. That means that you can ship your inventory to an Amazon warehouse in Europe and they will handle order fulfillment for local customers. This means that you can access millions more Amazon customers, and continue to leverage the operational simplicity of the FBA program.
So how does it work? Let’s answer some frequently asked questions from Sellers about Amazon FBA in Europe.
How does FBA work in Europe and the UK?
Once your inventory has been imported into Europe and is with Amazon, there are two fulfillment options to choose from - European Fulfillment Network (EFN) or Multi-Country Inventory.
EFN allows sellers registered for FBA in Germany, France, Italy and the UK to store their inventory in one country’s Fulfillment Centre, and still fulfill orders throughout Europe, regardless of the marketplace the item was sold on. Alternately you can arrange to have inventory held and shipped from FC’s in individual countries, known as Multi-Country Inventory.
Once your Amazon Europe Seller account is set up, all your orders will be managed in the one Seller Central account.
Do I need to separate product listings for each country?
When you register to sell in any of the Amazon European marketplaces, your seller account is automatically enabled to allow you to sell in all other Amazon European marketplaces.
However, this does not automatically create listings in each of the Amazon European marketplaces - you need to set each listing up individually on each marketplace.
What about the language of listings, product packaging, and customer service inquiries?
- Product listing language: each country’s Amazon marketplace has different rules. But regardless of Amazon’s requirements, you’ll undoubtedly have better results if you translate your listings into the local language.
- Customer Service: Amazon asks that you provide general customer service, including handling customer’s VAT invoice requests, in the language of the marketplace you list your products on.
- Product packaging: Technically, product packaging is only required to be in the language of the country of origin. However for the best customer experience, you should consider having your packaging, instructions, and inserts translated into the local language.
But finally, good news! You can still view Seller Central in the local marketplace language of your choice, as well as in English.
Related: planning to expand your business to international markets using Amazon? We have just the right thing for you. Click here to receive access to our dedicated country guides that will teach you how to start selling on Amazon Canada, Germany, UK and Mexico.
Do I need to import my products to Europe?
Yes. Using FBA will require importing your products to another country for storage in an Amazon fulfillment center to sell them to customers in that marketplace.
To import products into the UK or Europe, you’ll be paying import taxes and duties upon arrival. Your shipping carrier may assist with this process. You’ll also need to apply for an an Economic Operator Registration and Identification Number (EORI) in order to import your goods.
Tip: Your company (or your freight forwarder) needs to be listed as importer/consignee and nominate a customs broker. Do not import goods as "Amazon" or to show Amazon as the declarant, importer of record or consignee!
Inventory sent to Amazon’s fulfillment centers needs to be sent under “Delivery Duty Paid Destination” freight terms with all relevant import duties, import VAT and other taxes paid by you. If inventory arrives at Amazon with unpaid taxes or duties, it will be returned at your (predictably exorbitant!) expense.
Do I need to register for, collect and pay VAT when selling on Amazon in the EU?
Yes. You must collect and pay VAT if your inventory is sent to and held in the EU. Amazon will require a VAT number from you to complete your account registration.
VAT can be avoided only if items are sold from outside the EU, are genuinely low-value and are imported in small packages already addressed to individual consumers. And in that case, you’ll probably be either paying hefty international shipping fees or having to pass that onto your customers, inevitably resulting in less sales or profits for you. Sometimes the end customer is even sent a bill by the customs authorities for the import duties. Not a good customer experience!
Best to buckle up and invest properly in being compliant in this new potential market. For that, you might want to consult a professional firm that specializes in VAT applications and ongoing reporting on your behalf.
What is VAT?
VAT, or Value Added Tax, is a consumption tax which applies to goods and service that are bought and sold for use or consumption in the EU.
As a seller, you collect the applicable VAT (currently the standard rate is 20%) from the buyer at the point of sale. You’re then required to forward on the VAT payment to the relevant country’s revenue authority on specific dates.
If you’re familiar with Sales Tax in the US, this concept may be familiar.
So how do I get started on FBA Europe?
- Apply for a VAT number. If applying in the UK, go to www.gov.uk and follow the links to apply for a VAT number. You can also apply for a VAT number in other European countries.
- If you apply for a VAT number in the UK, you should get a VAT registration certificate within 14 working days, though it can take longer.
- Once you have your VAT number, you can apply for a new Seller Account in your chosen marketplace. This will be a separate account than your North America Seller account. To apply, you’ll need:
- A valid credit card
- Phone number
- Tax information - your EIN (or equivalent if you’re not a US entity), and your VAT number.
- Bank account which is in a country and currency supported by Amazon.
- Enroll in FBA in your chosen marketplace. You may have a payout restrictions placed on your account while Amazon goes through the process of further verifying your business registration information.
- Start preparing your inventory for import into Europe. To start importing inventory, need to apply for an EROI number. Consider working with a freight forwarder or customs broker to help with the importing & customs process. Some shipping carriers such as DHL offer this service for a fee.
- Create a plan for product returns. You’ll need to provide Amazon with a returns address in the country of the fulfillment centre. Without a local returns address your products can’t be returned and may need to be disposed without reimbursement to you. However, just like with FBA in the US, Amazon can repackage and re-sell returned items for you, as a default option. Just be sure to work this into your selling costs and avoid surprises.
So, it can be a long journey to get started on Amazon in Europe, but from many accounts it is well worth it. We’ll cover in more detail Why Selling On Amazon in Europe is Worth the Hassle.
If you have questions about the process, please leave a comment below and we’ll do our best to answer!