Navigating the retail environment on Amazon can be daunting, but the rewards can be huge if you successfully integrate the eCommerce channel into your business.
With over 2 billion visitors in June 2021 alone, Amazon is now a great place to start gaining international exposure and accessing new customers globally. What's even better is that you can do all of this from your own computer in the UK!
This October The Department for International Trade hosted a webinar for companies who were already selling on Amazon UK but looking to expand internationally using Amazon Europe. The session was led by Amazon expert Chris Turton, who is managing director of eCommerce Intelligence, an eCommerce consultancy with extensive experience handling a variety of Amazon seller and vendor accounts.
We've summarised Chris' key points and information about how to successfully sell on Amazon Europe below.
What do I need to have before I can use Amazon to ship into Europe?
Sending products across the UK-EU border now brings additional paperwork and costs.
This has affected everyone looking to ship into the EU, so it’s always advisable to use a customs broker or freight forwarder. Their expertise and knowledge can be really valuable. Some freight forwarders may offer packages, so it’s worth speaking to your account manager to see what they can offer you.
When exporting to Europe, you will need:
- EORI Number
- The Country of Non-Preferential Origin (Where the product is made)
- Power of Attorney (an individual or organisation that can take sole responsibility for your item getting across the border)
- HS Codes (Harmonised System) (These determine the duty charges and import VAT for each product)
- Customs clearance documentation (Carriers/customs brokers can support you on this)
- New Product and Labelling regulations. These are very specific to your product category, so it’s essential you do some research into what you might need to export into the EU.
What are the different ways to send Amazon shipments into Europe from the UK?
Fulfilled by Amazon (FBA)
FBA requires you to send your products to an Amazon fulfilment centre. The product is then shipped out to the customer from the fulfilment centre it is purchased on Amazon.
Merchant fulfilled network (MFN)
MFN requires you to ship the product out to the customer, as they purchase directly from you. [/panel]
Benefits using FBA
- This is the easiest way to get the Prime badge on your products and can be beneficial as Prime products tend to be boosted in search rankings.
- You can ship your products to multiple Amazon fulfilment centres across the EU, meaning you can decide the specific countries you want to sell into.
- If your supplier/manufacturer is located in another country, you can send them directly to Amazon fulfilment centres from the country. This saves you both time and money.
- Germany is the best option to send stock onto on FBA, as it’s the largest e-commerce market in Europe, accounting for 20% of Europe’s e-commerce sales. It also makes a great location for Poland, Netherlands and Czech Republic, if you choose to supply these markets too.
Sending via MFN
- This option is considered less attractive, as there will be additional fees to get the product to the customer.
- From the 1st January 2021, if your product is over €22 you must ensure your required taxes & duties are paid in advance of the customer receiving the item.
- Items that you list on in Amazon in the EU must include all these taxes and duties within the price.
- Many carriers offer delivery services that allow you to pay import duties in advance of customers receiving their items, so it’s best to discuss these with your carrier.
Are the rules different for Northern Ireland & the Republic of Ireland?
If your company is looking to sell into Northern Ireland and the Republic of Ireland, there are additional factors you will need to consider.
- The “Prime” badge stopped showing for customers in Northern Ireland, despite the country still being part of the union in Mid-March and the government and EU making a 3 month extension to the process. This means that Amazon cannot ship goods “locally” to Northern Ireland (e.g. from England, Scotland or Wales).
- To get Amazon Prime in Ireland and Northern Ireland you must have European FBA stock. This is the case even if Northern Ireland have local fulfilment centres. This is because of the B2B shipments limit of £135 requiring customs declaration. It also means if you are a Northern Ireland seller you cannot have removal orders made if you plan to use Amazon FBA in the UK.
- You will need to have a “mainland” UK address and have the courier arrange to collect the item, so it gets a little complex.
- In October 2021 the EU are said to be looking to reduce some of the issues with moving goods between Great Britain and Northern Ireland, so there may be future developments here that ease this process.
Once all my items are in an Amazon FBA, what else do I need to think about?
- It’s highly recommended to speak to your accountant or financial adviser, as they will be able to offer the best advice for your company.
- Amazon has their own system called VAT Services on Amazon, which they use to handle your registrations from one central source.
- You can register VAT for all FBA European countries by visiting the VAT Services section on your Amazon account. There may be offers and discounts available for registering with all 6 EU countries.
Tracking and managing your inventory
- Amazon now keeps scores using the IPI score, which reflects how much you pay for storage fees etc. Your inventory in the UK and Europe are now separate, meaning you will have separate IPI scores for each.
- It’s highly recommended to use the Daily Inventory Report to monitor the stock in your European FBAs. You will also be billed based on if your overstock or understocking products. It’s worth having a look into how this is being calculated to make sure your margins are not being hit.
- If you want to have your inventory returned from an FBA located in Europe, it can ONLY be returned to an EU address. It is not possible for your stock to be sent back to the UK. It is possible to pay for items to be disposed of if needed.
- Returnless refunds are recommended if you are going to sell into Europe – either through FBA or MFN. You’ll need to weigh up the costs of the return to see if this option is beneficial to your business.
- Make sure you have a default return address when you are using Amazon’s FBA service. If you do not, Amazon will automatically issue the customer refund. This return address will need to be a local address, not back to the fulfilment centre.
- If you want the customer to return the product to you in the UK, you will need to pay for the returns label. You can not charge the customer for the international shipping label, as this is against Amazon’s Terms and Conditions.
- If you are a brand owner and have a registered trademark, you can apply to Amazon Brand Registry. This gives you a number of tools that can improve conversion rates, as well as additional advertising and reporting services.
- If you had an EU Trademark before January 1st 2021, you will automatically get a UK Trademark. If your EU Trademark was registered after this date, you do not get a UK Trademark, leaving your IP through Amazon’s Brand Registry service may not be covered.
- If you have a new brand and you have just protected your IP in the UK, you will have to register again for Europe to make sure you are protected in European markets.
Listing your products
- Firstly, make sure your listings are spot on in the UK! This is because Amazon will take all content from your UK listing and move it across to the European site using the BIL (building international listings) tool.
- It will not make your products live and will only update your price based on recent currency rates. Be aware that this will not take into consideration all of the additional costs and fees that you may need to factor into your price when selling into European markets.
- Poor translation can be the biggest block to your sales. Do not use the machine translations provided by the BIL tool.
- Always use clear, native translations! Amazon does offer this service through the service provider network, or you can use freelance sites. Once you have the translation you can edit the listing manually and add your new content.
- Take time with keyword research, as this can be different in other countries.
Research your market
- To get a comprehensive understanding of the landscape on Amazon Europe, make sure you research what competitors are doing. This analysis will help you decide on your strategies.
- For example, if your competitor is using Prime and you want to compete with them, you will likely have to sell via FBA, so you can also ship your products next day delivery. If you find competitors are not using localised language, this is a great opportunity to strengthen your listing, using local keywords that will improve your conversions.
- Don’t forget to view competitors on the local site, rather than the UK site, and also use a local postcode for the delivery address. This is so you can view it in the eyes of an overseas customer.
For more information on DIT and to contact us please visit our marketplace listing.