This is a guest article by Catie Grasso, Feedvisor.

Creating a deeply personalized, convenient shopping experience for customers through the Amazon marketplace is one of the core pillars of success for high-volume Amazon sellers. If you have taken your online business overseas, or have plans to do so in 2018 or the years to come, implementing Pan-European FBA as a fulfillment method can help you create a better experience for your European customers. The program enables you to sell across Europe by helping you place inventory closer to your European customers and by fulfilling and delivering orders at lower costs and in less time.


If you aren’t already selling overseas, Pan-European FBA can grant you fast access to European customers and all orders will be Prime-eligible in all five European marketplaces (the UK, Germany, France, Italy, and Spain). Sellers must be eligible to sell product in each of these Amazon European marketplaces in order to enable Pan-European FBA. The program also allows existing European Amazon sellers to reap the convenience and cost-saving benefits of FBA. With over 100 million Prime users globally, increasing visibility to that audience is essential, as they are more than twice as likely to shop online daily than non-Prime customers and are the e-commerce company’s most committed shoppers.


Why Pan-European FBA might be a good fit for your business


1. You’ll experience lower fulfillment costs than when selling via the EFN (European Fulfillment Network).


With Pan-European FBA, Amazon distributes your products across Europe at no additional cost. When a product is sold in one of the Amazon European marketplaces, you only pay the local fulfillment free from that marketplace versus when you sell via the EFN and are required to pay a cross-border fee for each order shipped. Pan-European FBA inventory is currently subject to monthly storage fees, long-term storage fees (after 12 months), and removal fees if stock needs to be moved back to the country of your home marketplace.


2. You have the capacity to reach millions of Prime customers regularly.


According to Feedvisor’s Amazon User Study 2018, a whopping 85 percent of Prime shoppers visit Amazon and nearly 50% make a purchase at least once a week. Pan-European FBA grants sellers access to these Prime users, Amazon’s most loyal customers across Europe.


3. Faster deliveries increase customer satisfaction.


With inventory being stored close to customers, orders are fulfilled and delivered in less time than non-Pan-European FBA orders.


4. You have more time to focus on further expansion.


With Amazon handling the stock management and delivery logistics, you have more time to focus on achieving your business goals and growing your operations. With the Pan-European FBA method, Amazon also facilitates customer inquiries, returns, and refunds, which is a major advantage to sellers as it saves time and boosts seller performance metrics.


With Pan-European FBA, you have access to a Cross-Border Stock Movement Report in Seller Central which details information associated with sales, refunds, returns and fulfillment center movements that impact your inventory in an Amazon European fulfillment center. You will easily be able to track ASINs movement, stock departure dates, and stock destination countries so you have visibility into your product in motion but aren’t responsible for the details and logistics.


One important element of Pan-European FBA for sellers to consider prior to joining is VAT compliance. VAT, or Value Added Tax, is a tax that VAT-registered merchants add to the price of the goods they sell and pass on to the national tax authorities when filing their tax returns. In order to avoid unforeseen issues down the road, it’s important for sellers to quantify their VAT costs prior to engaging in Pan-European FBA, in order to make sure that they can price competitively in the markets where VAT compliance is required.


The main factors that determine if you are required to register for VAT are your business’s country of establishment, the location of your inventory, and your sales level. If Amazon stores your inventory in all seven countries that have fulfillment centers, you will need to be VAT compliant in all seven countries, which may trigger additional reporting requirements and VAT invoicing, another step of registering for Pan-European FBA that often gets overlooked.


Like on any online marketplace, it’s important to do your due diligence and research to avoid any potential roadblocks if you are using FBA to fulfill other marketplace orders. Fulfillment methods aren’t “one size fits all” and rather should be customized based on your individual business needs, goals, and constraints.


For example, customers have reported receiving an Amazon box with an item that was purchased on eBay. It turns out that the seller needs to specifically ask Amazon to ship the product purchased on other marketplaces in a plain, unmarked box which costs roughly $1 per item. Some sellers have received notification from other marketplaces saying that fulfilling with FBA is no longer available, so utilizing compatible marketplaces is something to pay attention to moving forward. Additionally, Amazon handles the fulfillment, but it’s up to you as the seller to pay to add insurance and signature verification and have returns shipped back to your Amazon inventory.


However, with the added product exposure that you receive in all of Amazon’s European marketplaces, Pan-European FBA is a great route to consider if you are selling on and looking to expand to Europe or are an Amazon European seller looking to capture more conversions in neighboring countries.


Catie Grasso is a marketing content writer for Feedvisor. She enjoys running, trying new restaurants, and exploring New York City.



Interested in expanding abroad but not sure about the VAT regulations? Talk to InterCultural Elements’ partner now and see how they can help!