Your Amazon business is booming and you are thinking about growing even more? 2021 is the best year to expand to Amazon Europe and to take advantage of the opportunities the European Amazon marketplaces offer. In this post, we’ll explain why you should expand right now and how you can start selling on Amazon Europe.
Why you should expand to Amazon Europe
There are several reasons why foreign Amazon sellers should expand their business into Europe. The 8 individual marketplaces in the UK, Germany, France, Italy, Spain, Poland, the Netherlands, and Sweden are some of the most profitable worldwide, boasting more than 400 million potential new customers. They also generally follow different sales periods than customers abroad which allows you to double your peak sales numbers year-round.
While online shopping is relatively common in other areas of the world, there is still space to grow in Europe. This is not only noticeable by the continued investment of Amazon in the marketplaces there but also by the market gaps in several countries. Importing needed and wanted products to Europe and selling them in 8 different markets enables you to fill these gaps before others do and grow your business exponentially.
These are just a few of the reasons why Amazon's European marketplaces are a good place to expand your business to. But how can you actually start selling in Europe?
How to start selling in Europe
Before you can list your products and start selling on the European marketplaces there are a few steps you need to take. You need to figure out how the European markets and its customers work, how to store your goods and deliver them to customers, and which legal obligations you need to fulfill.
Research Storage and Fulfillment options in Europe
Because storage and fulfillment impact the bureaucratic duties and cost structure of your Amazon business in Europe, you need to look into them before you start researching the profitable products to sell.
There are lots of options when it comes to storage and fulfillment, from several different FBA programs to external fulfillment providers active in Europe.
Each of these offers storage in different countries, impacting the amount of VAT-related duties you have to fulfill. Choosing to store in several European countries might reduce the delivery times for your customers but it also increases the workload when it comes to tax responsibilities.
Additionally, the cost of fulfillment and storage when using Amazon FBA programs differs between product categories.
Research the market and customer needs
Once you know where you will be storing your products and who will be responsible for the delivery to the European customers, it’s time to think about the different European markets.
You should research popular items in Europe, their availability in stores and online, selling costs, and more. European countries differ both culturally and in terms of availability of different product groups. The consumer’s needs and wants on each of the European Amazon marketplace might therefore be different, impacting which products are profitable and which are not.
Not only that, the willingness to pay and therefore the ideal price point will also vary between counties. So will the payment methods common in each marketplace. You need to have a good overview and understanding of the markets before you decide which products to import into Europe and sell on European marketplaces.
Register for VAT and obtain an EORI number
In the next step, you apply the knowledge from your research. There are two numbers that you need in order to stay compliant with European law.
The first is the EORI number, or Economic Operator Registration and Identification number. This number is needed to start importing into the EU. However, you will only need to register once, as the EORI number works EU-wide.
The second is a VAT-ID. Depending on the storage and fulfillment option you choose you will obtain either one or several of those country-specific numbers. For example, if you store in Italy, Germany, and Spain then you are required to register for VAT in Italy, Spain, and Germany. If you are for example participating in the PAN-EU FBA Program, in which your goods are stored in a variety of countries to ensure quick deliveries, you need to register for VAT in all of those countries.
It is important to note that with each VAT-ID several VAT-related duties such as the filing of VAT Returns arise throughout the year. Specialized VAT service providers in Europe, such as hellotax, can help you with the registration for VAT in different countries and languages and can take care of VAT duties for you. They also offer specialized expansion programs for foreign sellers wanting to start selling in Europe.
Register for an Amazon Seller Account in Europe and start listing
The last step you need to take before you can finally start selling in Europe is to register for an Amazon Seller Account in Europe, which can be used for all European marketplaces. It is also possible to connect an existing account although the information and verification required differs. You will for example need a valid European VAT-ID before you can start selling.
The account details needed differ between European and other Amazon marketplaces. So do the listing tools available on Amazon in Europe. Having a clear overview of how Amazon selling in Europe works is indispensable for a successful expansion.
Once your account is up to date and running, all that remains is to list your goods, import them and send them to warehouses or fulfillment centers. From then on you continue to market your products and manage your Amazon business. You also still need to keep an eye on regular VAT duties that arise.