What is Amazon EU?
Many individuals are aware that Amazon is one of the largest e-commerce companies in the world. Amazon Europe is an e-commerce company mainly influencing and operating in European markets. Amazon EU has a network of about 31 fulfillment centers throughout Europe and is spread all across seven countries.
What Are Sales Options Available In Amazon Europe?
If you choose to sell in Amazon Europe, you can get your products closer to Amazon shoppers. There sales options available in Amazon EU such as Pan-European FBA, Multi-country Inventory (MCI) and Amazon European Fulfillment Network (EFN))
The Pan-European FBA enables you to sell products all across Europe. This was specially designed to help in positioning your inventory closer to European clients. This also allows Amazon to deliver the orders at reasonable costs in minimal time and Amazon will pass this saving to you, the seller. The Pan-European FBA let the products be eligible for Prime and to become more visible to many other potential customers across the Amazon Europe marketplaces.
The goods are delivered to one of the FBA warehouses in Europe, and Amazon distributes them to warehouses in other countries in accordance with the demand in each region. Fast Prime delivery is available to residents of all European countries, not just Britain. In whatever country the order is not delivered, the fee is the same everywhere - local fulfillment fee. And there are no fees for crossing the border. But there is a catch - you have to register VAT (Value Added Tax) in each country where the goods are stored. Amazon promises to facilitate the process of VAT registration and even introduce a system of discounts, but it is unknown when this will be.
The following are the pros and cons of the Pan-European FBA:
- Easy to Manage Inventories.
Amazon tends to send your products to Amazon European Fulfillment Centers to the customers to meet their demands.
Amazon will send your products all through its European warehouse networks without paying for an additional cost. You will pay local fulfillment fee or rate of the marketplace where orders are placed and not European FBA fee.
Some clients only buy prime products with the Pan-European FBA; you’re eligible to sell products in five Amazon European marketplaces while enjoying full-prime eligibility.
- More Reliable and Faster Deliveries.
Another advantage is that your products will be stored closer to your customers. This allows Amazon to fulfill orders quickly to your clients.
If you use pan-European FBA, you can benefit from the local customer service of Amazon. This also provides services to customers in local European languages.
- Compliance and VAT Registration.
Some do not get excited about Pan-European FBA especially if they learn about the compliance and vat registration involved.
Multi-country Inventory (MCI)
The Multi-country Inventory allows you to easily ship FBA inventory to the Amazon Fulfillment Centers in numerous countries that you choose to ship all over Europe.
Products are shipped and stored in several warehouses in the countries of your choice. If the order is delivered to the country in which the goods are stored, a local fulfillment fee is charged, if to a country in which there is no goods - EFN commission (cross-border fulfillment fee). For example, you want to sell only in France and Germany, and send the goods to the warehouses of these two countries. But if Italian residents sometimes buy from you, Amazon will charge an extra shipping charge. VAT needs to be registered in several countries.
Multi-country Inventory or MCI delivers great advantages as well.
- Your clients get quicker local delivery if your products can be found in fulfillment centers that are close to the area of residence.
- Your exclusive listing qualifies for accelerated product shipping options including the Amazon Prime Premium Shipping, Express Delivery in places available and free delivery that starts at around 29 euros.
- You can save money on the transportation costs if you send inventories in bulk into the fulfillment centers instead of just dispatching individual orders across different borders.
- There is no added fee for this selling option but, you will pay standard FBA fulfillment fees ONLY if you’re in stock at fulfillment centers in marketplaces where the orders were placed.
European Fulfillment Network (EFN)
European Fulfillment Network shortly known as EFN enables sellers with Amazon Europe Marketplaces account and also registered sellers for Fulfillment exclusively by Amazon to store the inventories on their local fulfillment centers. This also includes fulfilling orders that are coming from other marketplaces in Europe form similar inventory pool maximizing flexibility and control that the sellers have on their inventories.
Goods are stored in a warehouse in the UK and delivered throughout Europe. If the order is delivered to the UK, only the FBA (local fulfillment fee) is charged to the seller. If the order is delivered to another country, then the seller is charged a fee for delivering the goods to another country (cross-border (EFN) fulfillment fee). Buyers from Britain receive orders faster than buyers from other countries.
This option is said to be the simplest among the three wherein sellers can get their products to only one of the warehouses of the Amazon and all the orders are completed from that particular country. This impacts customer experience radically since delivery times are much longer and in most instances, you’ll not have access to the Prime customers. The cost of delivery is also much higher if you choose to sell to clients of other markets through the EFN, you’ll pay cross border fees for orders shipped.
- In terms of VAT compliance, you need VAT registration on countries where products are shipped from.
- This allows you to ship in any country of your choice all over Europe.
- MCI delivers more other benefits like quicker local deliveries when products are stored in local fulfillment centers.
- Not all sellers are allowed the option of transferring their inventories to different nations. They can transfer their products to the distribution outlets or centers in that particular country in other marketplaces in Europe.
Amazon Europe VAT is one of the reasons why the sellers somehow hesitate in expanding their European Markets. This can be confusing and complicated and is unfamiliar part with serious penalties and multiple rules. But even so, Amazon Europe Value Added Tax should not dissuade sellers from venturing to rich markets.
If you sell products in Europe, Amazon Europe VAT is an imperative consideration. Compliance with this is a serious matter, and improper reporting and processing can spell serious disasters for your business. Any business operating within Europe is obliged to add VAT to their services and products. The VAT is a consumption tax applied each time value is added to products. This includes transition to and from raw materials, product manufacturing, wholesale, retail, and the end consumers of Amazon. However, local tax authorities are very keen when it comes to ensuring that taxes are collected.
Since 2016, tax authorities are using the newest VAT legislation in cracking down on those non-compliant sellers regarding Amazon Europe VAT. There’s no escaping AE VAT. You need to account and report this accurately regardless of how you understand the governing regulations. But if not, you will pay hefty interest charges and penalties which add up to about 400% of original Amazon Europe Vat that you owed.
There are three main selling options in Amazon so better choose the option that is right for you to ensure that you will be selling lucratively.