Operational Complexities of Selling in Amazon Europe
Did you hear about Belgium?
Amazon Ads recently announced that eligible sellers and vendors can now reach Belgium’s online shoppers (expecting to reach 8.6 million by 2025) with Sponsored Products, Sponsored Display, Sponsored Brands, and Stores on Amazon.com.be. This is the latest addition to Amazon’s EU expansion and surely won’t be the last.
While Germany and the UK continue to be the golden geese, this is an excellent example of how Amazon continues to prioritize and invest in the expansion of their presence and tools across Europe. Amazon clearly sees Europe as an important venture worth delving into, and brands should strongly consider following their lead.
So, if you are ready to explore a new EU marketplace and connect with millions of new shoppers on Amazon, we’re ready to help you every step of the way.
Though every marketplace will be different, some foundational aspects of your Amazon business will be similar. This post is all about the operational aspects of your Amazon business and three primary things you’ll need to think about in preparation for your expansion:
Ensure product compliance within your target market
Find a reliable 3PL partner
Follow tax laws within each country
Ensure product compliance within your target market
Amazon conducts business with customer safety in mind, and they expect brands on their platform to meet country-specific standards and legal requirements. Therefore, while it can be both time-consuming and expensive, it is important for brands to follow the unique, government-sanctioned product compliance rules for each marketplace they are active in.
As you begin working on product compliance, make sure to check if your product is appropriate for the country you want to expand to and if your desired EU member state has national requirements in addition to EU laws (source). Failure to meet these national requirements and EU laws can lead to delays in customs clearance, rejection of shipments at port, and fines with Amazon delisting the product altogether. Compliance regulations change frequently as well, so make sure you are vigilant and stay up to date on those alterations.
Find a reliable 3PL partner
With transportation, labor costs on the rise, and Brexit, the need to work with an efficient 3PL provider is more crucial now than ever. A reliable and economical 3PL partner can help your brand overcome most of the complexities related to transportation, freight, customs clearance, and product storage. They can also help you minimize out of stocks, ensuring timely transit of stock from manufacturer to storage hub and last-mile delivery to a fulfillment center or customer.
GO works with several reliable 3PL partners that are on Amazon’s preferred network – they can assist you in this endeavor and ultimately help you save both time and money.
Follow tax laws within each country
Taxation is another intricacy that brands need to plan for when they want to sell in a new country. To store inventory in Amazon European marketplaces, you’ll need to register for Value Added Tax (VAT). VAT is a tax in Europe that is included in a product’s sale price and sent to the national tax authorities when brands file their tax returns. For example, if your product costs €20 and your VAT is 25%, your product will be listed on Amazon at €25 (source). VAT rates vary by product and country and registering for VAT comes with its own tax-related obligations.
Be sure to run preliminary research on VAT before committing to launching in a new country on Amazon. Since the tax will impact price and fulfillment, you’ll need to know by how much and if it would be too much of a detriment to your margin and brand strategy.
VAT is complex and can be difficult for brands to manage on their own. Find tax experts that understand the complexities of VAT by exploring Amazon’s recommended list of providers.
If there are so many complexities when beginning to sell in different EU countries, why do it?
The three operational priorities listed above only scratch the surface of what brands need to anticipate before selling in a new Amazon Europe marketplace. There are other headwinds that can dissuade sellers from taking part, such as the introduction of Brexit keeping the UK from freely distributing products across Europe, or the difficulty of deciding which country or countries would be most beneficial to sell in. So, the question becomes, why expand?
The answer is simple:
With the right approach, brands can access millions of new Amazon shoppers representing millions more in potential sales across various European countries.
Amazon UK, Germany, France, Italy, and Spain platforms collectively see 262M+ unique visitors per month, with the UK and Germany making up 74M and 78M unique visitors per month, respectively. Additionally, in 2020, 86K+ 3P Sellers made over $100K in Amazon EU marketplace sales and 2,700+ products were sold per minute in the Amazon EU marketplace (source). This shows that while selling in Europe can be difficult, it is an incredible opportunity to reach an audience you likely haven’t connected with before and that has a strong propensity to convert.
IT'S GO TIME
Overwhelmed by what it takes to sell in different Amazon European marketplaces? Connect with us. With offices in the US and in London, we have been successfully assisting our clients on this front and have the experience, tools, and reliable connections to guide brands through this undertaking.