Amazon BUSINESS BEST PRACTICES
Starting Selling on Amazon Europe? 3 Most Important Steps to Take
In this article, we'll take you through everything you need to know to start selling on Amazon Europe.
Are you an established US Amazon seller? If you have previously only stocked your items in United States distribution centers, then you may consider expanding your reach to sell on Amazon Europe. So what does it take to stimulate your business into the next stage of growth?
This article will help you get your head around all these different marketplaces and their different rules.
Step 1. Decide which European Amazon marketplace to start with
It's up to you whether to sell in one of the five European Amazon marketplaces or in all of them. Still, you do have to choose a "home" marketplace at first. The only reason for making this decision is dealing with all of the different local tax setups can get complicated very quickly.
The obvious choice for somebody from the US is starting in the UK because they speak English. However, Germany is the biggest European market, less competitive than the UK, and a lot of customers speak English too.
To make your choice easier, here's the list of European Amazon marketplaces to consider:
The Netherlands has recently also launched its own European marketplace. It is still not fully featured and is not set up as part of Pan-European FBA as of yet.
Questions to ask yourself when wondering which marketplace to begin with include:
Step 2. Consider the legislations
Here's the list of European lawmaking bodies that regulate the Amazon marketplaces in respective countries:
Europe: Taxation and Customs Union
United Kingdom: UK Government VAT Guide
Germany: Federal Ministry of Finance
France: Foreign Country's Tax Obligations
Italy: Agenzia Entrate Italian Spain Agencia Tributaria
When selling across Europe, your legal obligations can get complicated quickly as there are EU regulations to follow as well as individual laws in each country.
Starting with one "home" marketplace is the best first step as this is a lot less complicated than trying to learn about all of the marketplaces at the same time. As you gain experience, learning about the other marketplaces becomes a lot more manageable.
If you aren't too legally inclined yourself, it is often a good idea to hire an international lawyer who is able to explain everything to you and help you set up processes around things such as VAT (value added tax) and customs documentation and fees.
Other things to consider include:
Amazon has a handy reference page for all of this which can be a great start. Use it as a guide on what you need to learn.
But that's not it!
This article will help you get your head around all these different marketplaces and their different rules.
Step 1. Decide which European Amazon marketplace to start with
It's up to you whether to sell in one of the five European Amazon marketplaces or in all of them. Still, you do have to choose a "home" marketplace at first. The only reason for making this decision is dealing with all of the different local tax setups can get complicated very quickly.
The obvious choice for somebody from the US is starting in the UK because they speak English. However, Germany is the biggest European market, less competitive than the UK, and a lot of customers speak English too.
To make your choice easier, here's the list of European Amazon marketplaces to consider:
- United Kingdom
- Germany
- France
- Spain
- Italy
The Netherlands has recently also launched its own European marketplace. It is still not fully featured and is not set up as part of Pan-European FBA as of yet.
Questions to ask yourself when wondering which marketplace to begin with include:
- Which one gives you the best entry into the European marketplace logistics-wise (tax, shipping etc)?
- Which one is the easiest to get started in, in terms of demand for your product type and competition?
- Which one is easiest/cheapest for you to distribute your European inventory from?
Step 2. Consider the legislations
Here's the list of European lawmaking bodies that regulate the Amazon marketplaces in respective countries:
Europe: Taxation and Customs Union
United Kingdom: UK Government VAT Guide
Germany: Federal Ministry of Finance
France: Foreign Country's Tax Obligations
Italy: Agenzia Entrate Italian Spain Agencia Tributaria
When selling across Europe, your legal obligations can get complicated quickly as there are EU regulations to follow as well as individual laws in each country.
Starting with one "home" marketplace is the best first step as this is a lot less complicated than trying to learn about all of the marketplaces at the same time. As you gain experience, learning about the other marketplaces becomes a lot more manageable.
If you aren't too legally inclined yourself, it is often a good idea to hire an international lawyer who is able to explain everything to you and help you set up processes around things such as VAT (value added tax) and customs documentation and fees.
Other things to consider include:
- Consumer rights and differences in regulations around things like returns and advertising
- Health & safety obligations
- Environmental standards
- IP law
- Invoicing, labelling and packaging regulations
Amazon has a handy reference page for all of this which can be a great start. Use it as a guide on what you need to learn.
But that's not it!
Step 3. Choose your fulfilment method
As you know already, there are two main business models when selling on Amazon.
The most popular and common is Amazon FBA which is when all of your inventory is stocked in Amazon's facilities and they fulfil your orders for you.
The other option is FBM, or fulfilled by merchant. This is when you stock and send everything yourself.
The differences in these two business models are worth examining because each has unique characteristics when applied to Amazon European marketplaces:
Fulfilling your orders yourself may seem a good option if you're selling a few items to customers in your own country, but if you plan to do it for customers in Europe, then you must prepare for some major downsides. You can either ship your products manually from your own country, which is going to lead to very long delivery times. You can also use a Europe-based inventory storage and fulfilment center, which is likely to be costly.
Fulfilling orders yourself can be a good way to test the market and understand which products are in demand, but once you decide to go all in and store large quantities of stock, FBA is the only real option .
Using Amazon FBA in Europe isn't quite as simple as just sending your products to Amazon. There are three main FBA options, and which one is best for you will depend heavily on your own budget and requirements. Let's take a look at them closer:
Pan-European FBA
This is the simplest route to go if you want Amazon to handle as much as possible for you. This involves you sending your products to a single European fulfilment centre, after which Amazon will spread them amount among others based on their own expectations for sales in different locations.
This allows you to save quite a lot of money as you can send all of your stock as one shipment instead of sending several smaller ones to different European countries.
This is also the viable option if you're already selling in one European marketplace and don't want to ship products to all of them. For example, if you have inventory at Amazon UK, setting up your listing on Pan European FBA will allow Amazon to move some of your inventory to the other countries and begin to fulfill orders from your existing stock.
European Fulfilment Network (EFN)
This option involves you shipping all of your European inventory to a single fulfilment center in Europe, but instead of Amazon forwarding it on to centers around the continent like with Pan European FBA, it will remain there and orders to the whole of Europe will be fulfilled from this one location.
This is just as easy as Pan-European FBA at first, but you also face longer shipping times and more cross-border deliveries, which can get a little more complicated and involve cross-country taxes.
Choose this option if you only expect your product to do well in one European country, for example, if you're selling an English copy of a book, then you can just stock it in the UK. People in the other countries can still buy it if they wish, but you aren't sending stock to those places where it's less likely.
Multi-Country Inventory (MCI)
This option allows you to manually decide where your products are stored, sending individual stock shipments to distribution centers in different countries.
If you know your products have higher demand in some European countries than others, this may be the best route as you have full control of which products are sent where, making it easy to avoid overstocking in places with less demand.
As a result, you put your stock closer to your customers, meaning lower shipping costs and times, and less cross-border deliveries.
Bottom Line: You can enjoy the same lucrative sales, if not more, in Europe, once you have done your homework. But your success starts with an optimized listing. Here's how to create one:
As you know already, there are two main business models when selling on Amazon.
The most popular and common is Amazon FBA which is when all of your inventory is stocked in Amazon's facilities and they fulfil your orders for you.
The other option is FBM, or fulfilled by merchant. This is when you stock and send everything yourself.
The differences in these two business models are worth examining because each has unique characteristics when applied to Amazon European marketplaces:
Fulfilling your orders yourself may seem a good option if you're selling a few items to customers in your own country, but if you plan to do it for customers in Europe, then you must prepare for some major downsides. You can either ship your products manually from your own country, which is going to lead to very long delivery times. You can also use a Europe-based inventory storage and fulfilment center, which is likely to be costly.
Fulfilling orders yourself can be a good way to test the market and understand which products are in demand, but once you decide to go all in and store large quantities of stock, FBA is the only real option .
Using Amazon FBA in Europe isn't quite as simple as just sending your products to Amazon. There are three main FBA options, and which one is best for you will depend heavily on your own budget and requirements. Let's take a look at them closer:
Pan-European FBA
This is the simplest route to go if you want Amazon to handle as much as possible for you. This involves you sending your products to a single European fulfilment centre, after which Amazon will spread them amount among others based on their own expectations for sales in different locations.
This allows you to save quite a lot of money as you can send all of your stock as one shipment instead of sending several smaller ones to different European countries.
This is also the viable option if you're already selling in one European marketplace and don't want to ship products to all of them. For example, if you have inventory at Amazon UK, setting up your listing on Pan European FBA will allow Amazon to move some of your inventory to the other countries and begin to fulfill orders from your existing stock.
European Fulfilment Network (EFN)
This option involves you shipping all of your European inventory to a single fulfilment center in Europe, but instead of Amazon forwarding it on to centers around the continent like with Pan European FBA, it will remain there and orders to the whole of Europe will be fulfilled from this one location.
This is just as easy as Pan-European FBA at first, but you also face longer shipping times and more cross-border deliveries, which can get a little more complicated and involve cross-country taxes.
Choose this option if you only expect your product to do well in one European country, for example, if you're selling an English copy of a book, then you can just stock it in the UK. People in the other countries can still buy it if they wish, but you aren't sending stock to those places where it's less likely.
Multi-Country Inventory (MCI)
This option allows you to manually decide where your products are stored, sending individual stock shipments to distribution centers in different countries.
If you know your products have higher demand in some European countries than others, this may be the best route as you have full control of which products are sent where, making it easy to avoid overstocking in places with less demand.
As a result, you put your stock closer to your customers, meaning lower shipping costs and times, and less cross-border deliveries.
Bottom Line: You can enjoy the same lucrative sales, if not more, in Europe, once you have done your homework. But your success starts with an optimized listing. Here's how to create one:
