September 23, 2022 11:35 AM
Not only will you tap into a brand-new customer base, you could also face less competition, giving you the chance to swoop in, steal market share, and drive revenue. However, expanding overseas, into multiple different countries, doesn’t come without its challenges. In this article, we’re going to take the guesswork out of the process with 6 top tips to help your EU Amazon expansion go as smoothly as possible.
For US e-commerce brands, expanding from Amazon.com into the EU marketplaces presents an incredible opportunity for growth.
Not only will you tap into a brand-new customer base, you could also face less competition, giving you the chance to swoop in, steal market share, and drive revenue.
However, expanding overseas, into multiple different countries, doesn’t come without its challenges. In this article, we’re going to take the guesswork out of the process with 6 top tips to help your EU Amazon expansion go as smoothly as possible.
Before creating your EU accounts, ordering and shipping your stock to Amazon EU warehouses, it’s important that you do your groundwork and double-check that there’s a reasonable enough demand for your products in the EU.
Why? Because demand differs from country to country - more than you might anticipate.
For example, while BBQ gloves might sell well all-year round in the states, this is almost guaranteed to be a seasonal product in EU countries like Germany and France that experience colder winter months. Understanding this can be the difference between you maintaining healthy inventory levels and overpaying for aged stock that isn’t selling.
Fortunately, there are a number of ways to accurately estimate the total monthly sales within your niche. By using an online tool like JungleScout, you can access Amazon data to find out how many units your competitors are selling, as well as get an overview of the competition you should prepare to face.
Being compliant while selling on Amazon EU could not be more important - and getting your compliance in check early on could help you avoid substantial fines and potential legal issues that could tie up your stock and suspend sales.
By selling on Amazon EU, you’ll be serving products to customers in multiple different countries - so you’ll need to comply with the local laws of each of those countries, too. These can vary from the packaging laws recently introduced in Germany to environmental restrictions.
In addition to this, you’ll also have to comply with each country’s import laws. If you import goods from the USA into Europe, you’ll be expected to pay customs duties, a tax on any goods that cross an EU border. The cost of this tax will depend not just on the quantity of goods you import, but also the type.
As a starting point, you can work out your rates and goods codes by using TARIC, a database that offers the tariffs of all EU member states.
“From supply chain due diligence to Environment, Social and Corporate Governance (ESG), compliance and import laws are shifting rapidly across the globe. You need to control it, otherwise you are unable to sell anything - Stef van Boekel, Founder of Marketplace Distri - European Amazon Operator
From new customer bases to lower competition, the benefits of Amazon EU are easy to see. What might not be so clear, however, are your tax obligations - but that doesn’t make them any less essential. If you fail to meet your EU tax obligations, you can face removal from Amazon marketplaces, financial penalties and legal repercussions by the local government.
If you’re looking to sell on Amazon in France, Italy, Spain, Poland, Czechia, Netherlands, Belgium, Sweden and Germany, or any other EU country, you’ll need to register for VAT in each respective country if:
● You hold stock within that country
● Your business is legally based within the EU
● You import goods into the EU
On top of this, if you’re planning on registering for the Amazon Pan-European FBA scheme, you’ll automatically need to register for and file VAT in all of the 9 countries above. This is because Amazon will freely move your stock between marketplaces without your control, resulting in VAT obligations within each of those countries.
With multiple languages and monthly, quarterly and annual filing requirements varying between countries, this can be a lot to manage for any business. As a result, it’s well worth spending the time upfront to find a tax agent you can trust.
By partnering with a reputable, experienced accountant, you will have a single point of contact for all of your EU VAT filings who will collate your sales data, handle bookkeeping, file your VAT returns and liaise with each individual tax authority at a country level on your behalf.
Not only will they save you money on knowing what to claim for and which country each sale’s VAT is due in, they’ll also help you to manage any potential issues or investigations quickly and professionally.
Sending inventory for multiple products to multiple warehouses across several different EU countries can quickly become a logistical challenge that costs your business both time and money.
However, just because you’re listing on multiple Amazon marketplaces, that doesn’t mean you need to send inventory to each individual warehouse - you can build an EU hub for your warehousing and logistics instead.
An EU logistics and warehousing hub is a centralised point for all operations within that area. From packing, bundling products and relabelling to be compliant with local laws, to managing shipping and returns, your logistics hub will be able to handle all major business activities at scale. This will help you to overcome many of the common hurdles that US businesses face when expanding into the EU.
If you’ve sold on Amazon before, you’ll know that driving sales on the platform is all about visibility. If your product listings don’t get impressions, they won’t get clicks - and they won’t drive sales. As a result, ranking for the terms your target customers search for, whether that be through Amazon PPC or organically, couldn’t be more important.
Amazon’s primary goal is to give customers search results filled with products that are relevant to their search query. The more competition there is for that search query, the harder you’re going to have to work to prove to Amazon that your product offers the relevancy their customers demand, and the longer it’s going to take your product to rank.
So, before you launch on Amazon EU, you should understand the level of competition you’re going to face in your niche and budget accordingly.
As with monthly sales, tools like Helium can also help you calculate how competitive a niche is, providing an estimate on how many units you’ll need to sell per day in order to prove to Amazon your product is relevant and reach page 1 on the search results.
From import and logistics to tax obligations and marketing, managing your own US to EU expansion can quickly become a costly, time-consuming and stressful endeavour. It’s for this reason that selecting a partner to handle everything for them is a clear and easy choice for many US brands.
“Once you partner with Marketplace Distri, you surround yourself with a team that will give your brand access to the largest sales channel in the world. A team that will manage every single detail of successfully expanding your brand within Amazon Europe.” Stef van Boekel, Founder of Marketplace Distri
By working with a professional enterprise like Marketplace Distri, you’ll have a trusted partner to handle the end-to-end expansion process. Tackling everything from logistics and warehousing to content optimization, Marketplace Distri can turn your EU expansion into a one-stop shop, allowing you to forget operational hassles and focus on driving growth.