Looking to take your online business to the next level?
Expanding into Amazon Europe territory is a logical step.
What’s more, as an Amazon seller, you have access to a range of tools that make achieving this as easy as possible – giving you the platform to reach millions of customers across several key European markets.
In fact, Amazon has more than one hundred million visitors to their five European marketplaces (UK, Germany, France, Italy and Spain) every single month.
Throughout this article, we’ve done our best to outline why you should consider expanding your online business into Europe and listed a few ways in which you can go about this, including a discussion related to Pan-European FBA specifically.
Why expand your business into Europe?
Making the decision to sell overseas is no easy feat, which is why we typically recommend sellers to test the international waters through an online marketplace.
Amazon is a large and profitable marketplace to consider as the company makes the online selling process as simple as possible. In fact, Amazon enables you to sell on all five of the European marketplaces, from only one seller account.
- Amazon UK
- Amazon France
- Amazon Germany
- Amazon Italy
- Amazon Spain
In addition to this, Amazon gives you the platform to introduce your brand and enhance your awareness to millions of active users across all five countries, ultimately helping to advance your sales across borders.
It’s also worth keeping in mind that international business growth enables you to become more competitive:
While you will have likely identified the peak periods for your business in the UK, by selling on other marketplaces, you can take further advantage of the peak periods in each respective country, in turn reducing business seasonality.
Your options for fulfilment
As an Amazon seller, you have two distinct options for fulfilment; either fulfilling your own orders or handing over the entire fulfilment process to Amazon, via the use of Fulfilment by Amazon (FBA).
Not only does FBA allow you to reach some of Amazon’s most active and loyal customers – Amazon Prime users – it also increases your credibility and trustworthiness as a seller, reduces your delivery time and gives your customers access to exceptional local language customer support.
In addition, once you opt to use Fulfilment by Amazon, you have access to three fulfilment methods when expanding your business across Europe.
Specifically, these are:
- European Fulfilment Network (EFN)
The European Fulfilment Network enables you to store items in fulfilment centres in the UK and fulfil orders from any of Amazon’s European marketplaces.
Through use of EFN, you will benefit from the reassurance that your customers are benefiting from customer service in their local language and returns handling.
It’s ideal for sellers who are looking to test how individual products perform in different European markets, but keep in mind that there is a local fulfilment fee when selling on the UK site and a cross-border EFN fee when selling to international customers.
Read more about EFN here.
- Multi-Country Inventory (MCI)
Multi-Country Inventory allows you to send your most popular product inventory directly to the Amazon fulfilment centres in each of the countries that your products are listed on.
The MCI process is best suited to sellers who have a clear and strategic growth plan for Europe, as it requires a good level of understanding as to which products sell well in which markets.
Read more about MCI here.
- Pan-European FBA
Pan-European FBA enables you to sell across all of the five European fulfilment centres, place inventory closer to your customers and fulfil orders quickly and at lower costs.
Below, we’ve outlined more information on Pan-European FBA and how you can use it to your advantage to expand your eCommerce business into European markets.
Benefits of Pan-European FBA
Less inventory management
With Pan-European FBA there is less inventory management for you to handle. Simply send the products to Amazon’s European fulfilment centres and let Amazon distribute them to meet the demand.
However, you will still need a robust inventory and order management system in order to know precisely where your products are located and how much stock you have left.
Such a system is also exceptionally useful when it comes to expanding onto additional online marketplaces and your own online store. By consolidating all your orders into one location, you will gain better insight into the performance of your stock and sales channels.
Not to mention, you'll also need an inventory system that works with Amazon in order to keep track of your Amazon FBA orders and avoid long-term storage fees.
Low fulfilment costs
Amazon distributes your products across Europe at no extra cost to you. You will only pay a local fulfilment fee of the marketplace where the order is placed.
Reach millions of Prime customers
Pan-European FBA enables you to sell your products in all five Amazon European marketplaces with Prime eligibility, allowing you to target some of Amazon’s most loyal customers.
Provide fast and reliable deliveries
As the products are stored in a much closer vicinity to customers, you can be sure that Amazon will quickly fulfil and deliver your product orders to your customers.
24/7 Customer support
Last but not least, Amazon provides customer support in the local languages of the five European marketplaces, facilitating customer inquiries, returns and of course refunds – saving you a lot of time and hassle.
How to start selling on Pan-European FBA
Register your Amazon European seller account
Registering just one account with Amazon allows you to create and manage offers on five European marketplaces and access over one hundred million customers.
These marketplaces include:
- Amazon UK
- Amazon Germany
- Amazon France
- Amazon Italy
- Amazon Spain
It is worth keeping in mind, however, that 30 million of these customers are from Amazon UK. You’ll also want to ensure that you add Fulfilment by Amazon to your Selling on Amazon account.
Confirm which products are eligible for Pan-European FBA
If you can sell a product on each of Amazon's European marketplaces, it's likely to be eligible for Pan-European FBA.
Create ASINs for your products
In order to sell a product that is available in the Amazon catalogue, you will need to match your product to the existing ASIN (Amazon Standard Identification Number).
If it is not yet in the catalogue, you’ll need to create a new one in each of the five languages of the Amazon European marketplaces.
Enable Pan-European FBA
You can enable Pan-European FBA through your Fulfilment by Amazon settings in Amazon Seller Central.
Create FBA offers on the same FNSKU across all Amazon Europe marketplaces
A Fulfilment Network SKU (FNSKU) is an ID that Amazon uses to identify a unique product and its associated seller, which is then sent to an Amazon fulfilment centre.
You will need to create an active FBA offer in each of the five Amazon European marketplaces, for the same stock pool with identical labelling.
Enrol your product in the Pan-European FBA
You need to enrol an eligible ASIN in the Pan-European FBA programme from the Pan-European FBA Inventory page to start receiving Pan-European FBA benefits on your products.
Ship it to Amazon’s European fulfilment centres
Send your Pan-European FBA ASINs to the Amazon European fulfilment centres in the country of your choice. Amazon will position it across other European fulfilment centres at no extra cost.
Watch it sell
Manage and track your Pan-European FBA offers using all the standard reports and tools in Seller Central.
Pay no EFN fees with Pan-European FBA
In regard to Pan-European FBA fees, you will only pay the local fulfilment fee from the particular European marketplace that you sell a product on.
In contrast, when you sell to customers via EFN (European Fulfilment Network) you pay a cross-border fee for each order that is shipped.
For example, let’s say you were selling a 1000g standard size parcel across all five European marketplaces and that you ship your inventory to Amazon UK fulfilment centres.
For orders placed on German, French, Italian and Spanish Amazon sites, the cross-border EFN fee would be £6.48.
Standard parcel 100g fulfilment fees
Sale on Amazon DE
Sale on Amazon FR
Sale on Amazon IT
Sale on Amazon ES
Fulfilment fee for EFN fulfilling DE, FR, IT & ES orders from UK inventory pool
Pan-European FBA fulfilment fee (regardless where the product is shipped from)
Cost savings per item with Pan-European FBA
However, with Pan-European FBA you would save up to 52% in fulfilment fees.
What other fees are there in exchange for using Pan-European FBA?
Other than the standard selling fees for each marketplace on which an ASIN is listed, you will pay the following fees in exchange for using Pan-European FBA:
Fulfilment fees: For ASINs enrolled in Pan-European FBA, you will pay only the fulfilment fee for the marketplace in which the order is placed, no matter where the stock is stored in the Amazon EFN.
Storage fees: Pan-European FBA ASINs will incur monthly storage fees and may incur long-term storage fees if units remain in stock for 12 or more months.
Removal fees: For removals (return of a product to a seller) Amazon charges local removal fees applicable to your home marketplace, regardless of where the stock is located at the time of the removal order.
How quickly will products be delivered compared to EFN or MCI?
As stock enrolled in Pan-European FBA is placed closer to the customer and based on anticipated demand, products are generally delivered much more quickly than with EFN or MCI.
Unlike EFN, Pan-European orders will often not require cross-border shipping, and if they do, they will be fulfilled from the closest fulfilment centre that has stock available. This ensures a quick delivery of these product orders.
It’s worth keeping in mind that you can use other FBA programmes after Pan-European FBA has been enabled, such as EFN.
VAT and Pan-European FBA
It’s important to remember that enrolment into the Pan-European FBA programme will trigger additional VAT obligations in multiple jurisdictions. This can be a disadvantage for many Amazon sellers as it requires a lot more work on their part.
As the product is being sold and shipped from a local distributor, it isn’t being sold at a distance and an Amazon seller must therefore register for tax in every country where their stock is being stored.
Amazon makes it clear that it is the seller who is responsible for the collection and payment of their taxes, including the filing of all relevant returns and VAT invoicing.
It’s worth keeping in mind that online businesses selling products via Amazon’s European Fulfilment Network (EFN) can avoid VAT, providing that they don’t exceed distance selling thresholds – which can vary from country to country.
This particularly favours smaller businesses who can then sell in small amounts to a number of countries, without incurring large administrative penalties for tax reporting.
Get started selling internationally
Expanding your business and selling in Europe is a big step for any retail company, but with Amazon the risk is vastly reduced, and you can start slowly, building up to more countries as and when you feel ready.
Of course, in order to manage your orders and multiple selling channels both effectively and efficiently, you'll need to invest in inventory management software. This way, you can be sure that your stock levels are automatically synchronised, eliminating the risk of overselling and saving countless hours by using one centralised system.
Pan-European FBA has many advantages and enables you to sell to one hundred million customers across all five European fulfilment centres, place inventory closer to your customers and fulfil orders much more quickly and at lower costs.
Got a question about Amazon FBA as a whole? Perhaps there’s something specific about Pan-European FBA that you’d like an answer for? Let us know in the comments below and one of our team will do their best to get back to you.
Looking to expand your eCommerce business even further? Check out this complete list of online marketplaces and take your retail company across the globe.