How to Sell to Europe in 5 Steps
by Matt Ellis
All roads lead to Rome, they say. But the roads built by Amazon.com, Inc. ("Amazon") also go to Munich, Madrid and London.
More and more American sellers on the Amazon marketplace are wondering about whether or not to expand into the European markets, or if it’s even possible.
This quick guide is designed to answer your questions and give you a brief overview of selling in Europe. Below you’ll find everything you need to know about finding a bigger pond, across the pond.
Is Selling to Europe Worth It?
Let’s start with the big question: is selling to Europe even worth the time, money and effort? There are good arguments for both sides, but it really depends on your business.
- The European eCommerce market is projected to continue growing 14% year-over-year, reaching US$685 billion at the end of 2017, as reported by Business Insider.
- European online shoppers are expected to reach 340 million in 2018.
- One Amazon account grants access to all five of European markets: Germany, France, Italy, Spain, and the UK.
- International markets in general diversify your income for more financial stability.
- Amazon helps a lot with taxes and legal compliance, plus it offers fulfillment. If you were planning to expand into Europe anyway, Amazon might be the smart way to do it. Otherwise, you’ll have to deal with German Customs yourself!
- Shipping, foreign fees and extra Value-Added Tax (VAT) charges make it hard to match the prices of merchants based in Europe.
- Language (and sometimes cultural) barriers may obstruct your marketing efforts, or at least require hiring a translator.
- Some international sellers claim that a large amount of their income still comes from the US.
- Ocean shipping isn’t cheap.
- You have to register for VAT in every country you store products in, making the Pan-European FBA option a bit of a trap.
The Final Word
It depends on your product. The most successful sellers on Amazon Europe typically fall into one of three categories:
- Those selling products with high margins
- Merchants selling to European niche markets
- Individuals who are already product leaders, so expansion is the next logical step
What this boils down to is, you have to do your research first. How are products similar to yours performing in Europe right now? How are they performing on European Amazon marketplaces?
One of the first steps is browsing the five European Amazon marketplaces to see whether the demand is strong enough and whether you can compete with competitor prices. In some instances, other sellers may already be selling your products at a markup, in which case you can undercut their prices by eliminating the middleman.
You’ll also want to crunch the numbers on both VAT charges and shipping charges. There are extra fees when doing business in a foreign country; it’s not just about the sales price.
How to Sell to Europe in 5 Steps
Assuming you finished your market research and an expansion to selling in Europe seems viable, get ready to roll up your sleeves and make it happen. Here are the five major steps to getting started:
1. Choose Your Method of Fulfillment
Basically, you have six options for fulfillment when selling on the Amazon Europe marketplaces:
- Seller Fulfillment from Outside Europe: You avoid some VAT fees and storage fees, but the longer delivery times make you ineligible for the Amazon Prime program. Also, your shoppers may have to pay the extra VAT fees themselves, hurting your appeal.
- Seller Fulfillment from Europe: Delivery is faster, but you have to deal with the country’s legal compliance and VAT fees yourself, not the mention the high setup costs and overhead.
- FBA European Fulfillment Network (EFN): No setup fees and faster delivery, but you have to pay cross-border fees and still need to register for VAT.
- FBA Pan-European Fulfillment: Fast delivery, no cross-border fees, and a farther reach across Europe, but the need to register multiple VATs may cost more than you save.
- FBA Multi-Country Inventory (MCI): Fast delivery, no cross-border fees, and stability in your strongest markets, but there are higher inbound costs for stocking warehouses and you will still need multiple VATs.
- FBA Export: This program allows buyers from other countries to purchase your products from your Amazon.com seller account. It's a great way to test the waters if you're interested in selling internationally, and it's free!
You’ll want to consider all the variables, including shipping costs, the quantity of units, VAT thresholds and product weights.
2. Legal Compliance: VAT, EORI, and Others
Unless you’re fulfilling orders yourself from outside Europe, you’ll need to apply for both a VAT number and an Economic Operator Registration and Identification (EORI) number.
In most countries you can apply for a VAT number online; just follow these instructions from the U.K. government's site. Once you have your VAT number, you can then apply for your EORI number by submitting a form (UK version here).
Depending on which countries you do business in, you always want to double-check for any special law exclusive to them.
6/12/2018 Update: This blog post from Veeqo is a great resource if you're interested in learning more about VAT.
3. Register for a New Amazon Seller Account
You need to set up a new Amazon seller account, separate from your North America seller account. This process is pretty straightforward. You’ll need these items:
- Credit card
- Phone number
- Employer Identification Number (EIN), or its equivalent if not from the U.S.
- VAT number
- Bank account (accepted by Amazon)
You can get started from this Amazon Europe gateway.
4. Translate Packaging, Labels, Product Page Copy, Etc.
One last order of business is to make sure your packaging and labels are all compliant with the country’s laws. Certain countries require specific information to be displayed on the product; the right lawyer or consultant can help with this.
Aside from legal compliance, you also want to optimize your business for foreign customers. This means translating your product pages into the preferred language, establishing a customer service program with easy accessibility and accounting for cultural differences, such as using the metric system for measurements.
5. Build Your Reputation
Starting out in any new market is hard, let alone one in another country. While many of the same reputation-building techniques luckily still apply, you’ll need to to put in a little extra effort into your branding and site management in order to level the playing field as a foreigner doing business in Europe. Your seller feedback does not transfer from one marketplace to the next, so you'll need to begin building your reputation from scratch.
To simplify these extra efforts, our FeedbackFive seller tool covers everything you’ll need. Not only does it allow you to request reviews after purchase, but it also sends you alerts for neutral or negative feedback so you can respond quickly and turn the situation around.
But it’s the professionally translated email templates that make FeedbackFive particularly useful for European expansions (and other foreign markets). Spanish, German, Italian, and French language templates for emails negate the need to hire a translator when you're first getting started. Each respective language comes with professionally-written email templates for a seller feedback request or product review request.
You’re going to have a lot on your plate already with an international expansion, so FeedbackFive’s automation will save you a lot of time and stress. The tool natively supports the following marketplaces: Amazon.com, Amazon.co.uk, Amazon.com.au, Amazon.ca, Amazon.mx, Amazon.de, Amazon.es, Amazon.in, Amazon.it and Amazon.fr.
New Opportunities in the Old World
Expanding to Europe isn’t something you can take lightly, or even experiment with to see if it suits you. You should conduct enough research beforehand to understand the market you’re breaking into, as well as to identify all the hidden fees that come with doing business internationally.
Do you have questions about expanding to sell in Europe? Comment below!
Originally published on March 20, 2018, updated October 17, 2019
This post is accurate as of the date of publication. Some features and information may have changed due to product updates or Amazon policy changes.