Amazon to simplify post-Brexit fulfilment to the EU for UK sellers
Since the UK officially left the EU in 2020, UK businesses have continued to find it difficult to sell into Europe. The disruption to business has been widely reported, with exporting companies complaining of additional costs, logistical difficulties, and administrative burdens. Others have decided to cease selling into Europe all together. Ollie McAninch, SEO specialist at Optimizon, looks at how it will impact marketers on Amazon and what they can do about it.
We can see that although all trade suffered as a result of the Covid 19 pandemic, UK-EU trade has failed to rebound unlike most of world trade.
Due to the costs and operating challenges of opening dedicated EU fulfillment centers, many savvy sellers have turned to Amazon. Shipping directly into Amazon’s European warehouses eliminated some of the post-Brexit issues. Namely utilizing Amazon’s EU logistics to distribute the products into European markets.
Optimizon on how Brexit has impacted marketer's ability to manage the Amazon side of their business.
However, even with this setup, friction still exists. Fulfillment through Amazon’s European markets does not ease the administrative pain of getting the products into the EU in the first place. This has not been helped by severe logistical disruption because of lorry driver shortages and port disruptions.
The good news is that Amazon is now aiming to make it much easier for UK businesses to fulfill EU orders from its UK warehouses, and global businesses could also take advantage of this new service. Amazon experts Optimizon tell us how, and why it is set to make life easier for UK and global businesses selling into the EU.
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Amazon European Fulfilment Network
Thankfully, Amazon will be re-starting their European Fulfilment Network this year. Beginning in November 2021, a pilot will launch for eligible selling partners whereby fulfillment from the UK to the EU will reopen via the European Fulfilment Network.
This means that UK sellers can sell into European markets through UK fulfillment centers. In other words, this will allow you to store your products in Amazon’s fulfillment centers in the UK, and Amazon will once again ship your orders to the EU.
Global exporters looking for a foothold in UK and EU markets will be watching with interest. By using the European Fulfilment Network to fulfill product sales across the UK-EU customs border, businesses can reduce the administrative burden by authorizing Amazon and its affiliates to export goods on their behalf.
Who will be eligible?
Initially Amazon is running a pilot scheme and sellers must be invited, or apply, providing they meet certain criteria.
To sell between the UK and the EU using the European Fulfilment Network, you must have an Amazon EU account, with offers for your products in both the UK and the EU (Germany, France, Italy and/or Spain).
Your business must have Fulfillment by Amazon (FBA) shipping and export settings enabled. In addition, you must have inventory stored in UK fulfillment centers, and the same stock-keeping unit (SKU) must be provided for both your UK and EU offers.
The price of an eligible item must not exceed €135.
What are the costs?
European Fulfilment Network fees will apply, so it’s important to ensure that prices reflect European Fulfilment Network fees and VAT.
For a list of European Fulfilment Network fees, go to the FBA fee changes page and scroll down to the table under Standard FBA fulfillment fee (per unit, sold on Amazon).
Remember, while the fees for FBA into Europe may seem high per item, it’s important to realistically compare the cost of fulfilling the items from your own business.
To ensure the fees and VAT have been reflected in your prices, you can either adjust the prices manually or use Build International Listings pricing rules to adjust automatically.
Is the Amazon European Fulfilment Network value for money?
We often hear our clients complain of the fees charged by Amazon for FBA services and other costs (such as packaging). However, businesses must fairly compare those fees with the costs of delivering such services themselves. In most cases, we find that businesses are unable to compete with Amazon when it comes to their world-class logistics.
If you're selling products below €135 that can absorb the Amazon European Fulfilment Network fees and VAT (which is a legal requirement, not an Amazon cost), the service could assist your business in EU fulfillment, without the associated administrative headaches.
The simple fact that you will once again be able to fulfill European orders from a UK based Amazon warehouse will be music to the ears of many UK sellers. Meanwhile, global brands looking to gain access to both UK and EU markets will be watching with interest.
As always, if you require any assistance in setting up or optimally managing any aspect of your Amazon business, please don’t hesitate to reach out to Optimizon’s team of experts.
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Optimizon is one of the UK’s fastest-growing eBay and Amazon Agencies, with clients including global brand leaders in homewares, garden machinery and sports equipmentFind out more