It's Time to Start Your Amazon European Site Business
For some American sellers, selling on Amazon Europe site is difficult for them. In addition to different VAT policies, there are manny other troubles including various currency, language, and inventory. However, if you can overcome thoses different challenges successfully, Amazon Europe site will generate much profit for you. Why do I say this？ Because Europe site is the largest market of Amazon international market. The sales of German site and England site accounted for nearly half of the Amazon international site total sales in 2016. According to the newest e-commerce index from UNCTAD indicating that the sales of Europe is increse rapidly, and the increase speed of England and German ranked in the top ten, and US ranked in 26th. There are many potential customers in Amazon Europe site, while the seller in that site is less than US site, thus, thoese two advantages will give the Europe site seller a huge market share.
Some issues that the Amazon Europe seller need to solve:
1. Which Amazon Europe site you should choose
Many sellers only consider to sell in England site when they are expanding their international market, then you will miss the 70% of Europe market, it will limited your potential sale ability.
German site is larger than England site, it is not difficult for seller to enter into this market.The French, Italian and Spanish stations are smaller but rapidly developing, with 174 million potential customers. In these countries, sellers face little competition both in terms of sellers amount and listing, which means sellers will have higher profit margins.
Sellers should expand to Amazon's five sites in Europe to maximize the potential sale in Europe. According to the seller, the highest-margin markets are now France and Italy. A data from a non-English speaking platforms show that nearly half (229) of the top 500 sellers of Amazon's European stations are involved in only one of five sites in Europe.
Language barriers are one of the major reasons that prevent sellers from expanding overseas. But in fact, selling in European stations that do not speak English is not as difficult as you imagine. Your UK station seller account is available on 5 platforms and the Amazon Fulfillment Network is responsible for shipping. You only need to consider the listing translation issues, it is worthy to note that publishing listings in other sites do not need to pay an additional fee.
2. published products
Every time a seller enter into to a new market, they have to face the competition with local sellers and businesses. In order to improve their competitiveness, optimizing each listing to facilitate the browsing of customers is crucial. Your listing needs localization, in addition to translation, edit the text according to local market is aloso important. Sellers need to be aware that before editing translations, they need to do research on local product keywords in order to know which keywords your customers use to search for products, and put them in your listing and back-end search terms, which helps to increase the listing traffic.
Hiring local native speakers to research keywords. Because irrelevant keywords are will reduce your website exposure and conversion rate. In addition, there may be ambiguous meaning on translation versions between English and local market language, it is not convenient for users to search. With the help of a native speaker, you'll get more accurate, product-specific keywords, and ensure website conversion rates.
3. Does seller need to establish a new company? Amazon Europe has a list of countries support, and companies that registed in the countries which are in the list are all available on the Amazon platform.
4. Understanding and management of value-added tax (VAT). Value-added tax (VAT) management is one of the obstacles in the Europe expansion process. In fact, the VAT policy in Europe is very similar to the sales tax in the United States. You can work with an accountant and it is not hard to deal with it.
What is VAT on earth? VAT (Value Added Tax) is a European Union tax system, commonly referred to as VAT, which is equivalent to the consumption tax. It is used for the trading of various goods and services in Europe. For example, if a seller plans to sell a product to a UK customer for £ 100, the UK tax rate is 20%. The seller adds this part to the sale, which means that the retail price of the product should be 120 GBP. Sellers reserve 100 pounds, the remaining 20 pounds to be paid to the British government.
You need to pay a VAT on the following two conditions:
(1) If you have your own warehouse or inventory in a certain European country, you need to pay the VAT tax;
(2) If your sales amount reaches the sale threshold in the certain country of EU, you also need to pay VAT. For sellers who are expanding to Amazon Europe, we recommend that you ship your product to the UK and store it in a UK warehouse so that you only have to declare tax to one country (UK).
5. the way for the logistics
For Amazon's new sellers in Europe, there are three kinds of FBA shipping options:
First, Amazon Pan-European FBA, if you choose this logistics, your products can be stored in any of the seven Amazon European warehouse including the UK, Germany, France, Italy, Spain, Poland and the Czech Republic. Amazon hopes that sellers will be closer to their customers, reducing deliver time and shipping costs. But for the new EU sellers, the Pan-European FBA is not the best choice. According to the European VAT policy, you need to regularly declare these seven countries to pay VAT for the storage of goods in seven European countries, , which is a huge expenditure.
For those sellers who are planning to enter the Amazon European platform, choosing Amazon's European Distribution Network (EFN) is a better option. Choose this delivery method, you can put the product in the Amazon UK warehouse, so you only need to register VAT in one country. Most importantly, you can still place your product on other Amazon platforms in the EU (German, French, Italian and Spanish) and sell the product to customers throughout Europe.
Tax issues: As soon as sellers export their products to new countries, they have to deal with customs and tariff issues. When shipping products to the UK, you need to be aware of the following expenses:
(1) Import Tariffs
In general, the tax you pay will be calculated based on your cost of freight (including shipping costs) and the tax rate for a particular product, this part of the expenditure is not refundable.
(2) Import VAT
The import VAT rate is usually 20% of the cost of the product (including shipping costs and customs duties). This part is refundable, and you can charge a value added tax for British consumers. Working with service providers with EU product import experience, they will save you a lot of hassle.
When a seller wants to place a new product on Amazon, they need to provide a UPC barcode, which will generate a FNSKU tag on Amazon. Every product that ships to the Amazon FBA should be appropriately labeled on FNSKU tag to allow Amazon to track inventory and make sure you get all your sales. To generate FNSKU labels for Amazon European stations, you will need to provide an EAN barcode. Many companies online sell such bar codes. When sellers purchase UPC bar codes, they receive the corresponding EAN barcode.