Originally published on July 22, 2020, updated August 21, 2020
Are you ready for international marketplace expansion? Industry leaders from AVASK Accounting, eComEngine, Global e-Commerce Experts, Payoneer, and YLT Translations discuss the opportunity of expanding to the EU in this webinar.
Watch the webinar recording to learn:
Are you ready for international marketplace expansion? It’s an important question, especially if you’re trying to grow your global presence. eComEngine hosted several industry leaders in a webinar to discuss the opportunity of expanding to the EU. Panelists included Tom Meek and Melanie Shabangu from AVASK Accounting, Andy Hooper of Global e-Commerce Experts, TJ Hyland from Payoneer, and Jana Krekic of YLT Translations.
Selling on the Amazon marketplace in the United States might already have you working around the clock, so before you jump into Europe, you might be wondering if it’s worth the effort. According to Tom Meek, there are three main aspects to consider — market opportunities, market size and stats, and population zone.
“If you compare Europe and the US from a population point of view and you group all of those countries within Europe, you're looking at 750 million people, compared to the US at 330 million,” Meek said. “The opportunity is absolutely massive in Europe as a whole, as a territory in comparison to the US...it’s definitely worth getting into.”
Meek went on to explain that with Amazon EU, you’ll have the UK, Germany, France, Italy, and Spain, and the Netherlands, which is a newer marketplace, as well as the soon-to-be-added Swedish marketplace. “You could dive into each market and look at even the holiday periods, for example...open yourselves up to those larger sales periods where you could drive more sales,” he said.
With a better understanding of how much your Amazon business could grow in the European marketplace, you might already be wondering about how expanding could impact tax obligations. This could be particularly important to consider in light of how Brexit is affecting everything.
Shabangu expects that selling thresholds will change by December 31, 2020. As a result, if you’re holding inventory in the UK, it will only be taxable in the UK. “We're going to be deemed as a third country,” she said. “So ensure that you've got a VAT number in the country where you're going to be storing your product in Europe, because that will be triggering the VAT.”
“There will also be distance selling thresholds if you've got inventory in countries like Germany or France and you're selling in between European countries,” Shabangu warned. “So those distance selling thresholds, they will still be available.”
Even if you’re very familiar with the rules and regulations in the United States, you could end up violating the ones in place for Amazon EU. It’s very important to take the time to ensure that your products and processes are compliant to avoid suspension — or worse.
Andy Hooper said that product compliance is “one of the things that a lot of people get suspended for.” He explained that Amazon has become more strict about this in recently months.
Overall, there are three things you’ll need to keep in mind — what regulations the product falls under, the ingredients of the product itself, and whether the product is actually compliant with EU regulations. Hooper warned against just sending US products and hoping for the best. Make sure the product label is compliant before you even start expanding.
When moving into the Amazon EU marketplace, you’ll need to think about localization. What this means, essentially, is that your products need to be appropriate and usable for local customers. You’ll have to put real effort into translating product listings and ensuring that you’re respecting cultural differences.
As Jana Krekic explained, “People do speak English in Europe, but it is more efficient to have your listings translated before you start selling on international marketplaces.” This is because your keywords will rank higher and be more searchable in the native language. The most effective product listing may even contain a “mixture of both English and the target language.”
It’s not enough to use Google Translate or similar tools, however. It’s best to hire a local, native-speaker who is experienced at writing Amazon product listings. You’ll be better able to reach your customers and avoid any unnecessary confusion.
Another very important factor to weigh when considering whether to expand into Amazon’s European marketplace is money, of course. Is there a way that sellers can ensure that they are getting the most favorable exchange rate when doing business internationally?
TJ Hyland explained, “When you’re selling on a marketplace internationally, you are going to get paid in whatever currency that is. Whether that’s pounds, euros, Canadian dollars, Mexican pesos...one of the easy solutions to that is to have an alternative such as Payoneer to help bring your funds that you earn in foreign currency, back to US dollars.”
Hyland stressed the importance of making sure you pay your VAT obligations. Using the right service can take the guesswork out of the process. Payoneer, for example, allows sellers to make a VAT payment, supplier payment, or a payment to a vendor by giving them the flexibility to use their funds as needed.
This recap has covered a lot, but the Going Global webinar tackles so much more. Here are some of the topics you’ll want to learn more about:
Don’t miss this opportunity to explore the possibility of growing your business by expanding to the Amazon EU marketplace!
Colleen Quattlebaum: All right. Hello everybody. Welcome to eComEngine's webinar that we are hosting today with an awesome team of industry experts. The title of the webinar is Going Global. Our industry experts will share their advice on expanding to Amazon Europe. So before we jump into the discussion, I want to introduce our panelists to each of you. Starting here on the left is myself, Colleen Quattlebaum. I am the marketing manager at eComEngine, so I've been here for over five years and we're just very passionate about helping Amazon sellers succeed. I know we have a lot of our customers on the call today that use our tools, but we're looking forward to sharing our knowledge and introducing all of these awesome experts to all of you on the call today. So joining us, we have TJ Hyland. He is the head of partnerships at Payoneer. He's been in the eCommerce space for many years as well. I think he and I met about five years ago at the Prosper Show.
Colleen Quattlebaum: He's an eCommerce specialist, foreign exchange consultant. He's going to share some tips that will make global eCommerce as simple as possible and help you get the most bang for your buck. Andy Hooper is joining us from holiday. He's off in his car right now. Tried to find the best connection he could because he's on vacation. So we appreciate him taking the time out today to join us. He is the CEO of Global eCommerce Experts. He's been in eCommerce for over a decade. First as a seller himself, and now he's helping sellers to expand into the EU. He has extensive knowledge, everything from tax and compliance, warehousing, third-party logistics, account management. So we're excited to have him here today.
Colleen Quattlebaum: We also have Jana who's joining us from YLT Translations. She is the founder of YLT and she has a team of over 40 people. She's worked with six to eight figure Amazon sellers for many years. She knows the eCommerce and Amazon space very well. Then we have two guests joining us from AVASK. Tom is the business development manager at AVASK, accounting and business consultants. He really focuses on corporate and private entrepreneur's accounts, selling on global eCommerce platforms. Melanie is our tax guru, so she is a highly qualified accounting expert. She's helped thousands of eCommerce sellers with her expert advice and professional solutions for over 20 years. So we're excited to have this awesome team of experts with us today. We have a lot of great things that we're going to discuss. While we're waiting for just a few more people to join us today, I see a few more attendees still rolling in, we are going to ... I'll just give you a brief overview about eComEngine.
Colleen Quattlebaum: We've been around for over a decade and we have a full suite of tools for Amazon merchants. FeedbackFive is our feedback and review management tool. This tool is available in 15 Amazon marketplaces. We recently launched in the Netherlands, Turkey, Singapore, Brazil, and United Arab Emirates. Then we have three other tools in our suite. Market Scout is an FBA product research tool. Restock Pro is an inventory management tool for FBA sellers, and it is available in US, UK, and Canada. SmartPrice is a repricer for Amazon sellers. So if you have any interests or want to talk about any of those tools, or have any questions, let us know.
Colleen Quattlebaum: Then as far as our experts and what we plan to cover today, our agenda includes discussing the opportunity of expanding into Europe, the impact of Brexit. We know that's been a big topic in the news a lot lately. A few months away from that. Tax obligations, Melanie again, she's a guru on tax. So she'll help share her expertise there.
Colleen Quattlebaum: Andy will talk a lot about product compliance in the EU, the different fulfillment options we will be sure to cover. Jana is going to talk about the importance of localization and when you need to consider that. TJ will talk about converting currency when you're selling internationally. So without further ado, we will go ahead and get started. I'm going to stop sharing my slides so that you can see all the beautiful faces of everybody here on the call today. Let's start with Tom. Maybe you can help us out with just the general topic of, what should sellers think about or how should they view the opportunity of expanding into Europe?
Tom Meek: Of course. Hello everyone. As I said, my name is Tom. Great question to open up with today's panel. It's great to be with everyone again. I know we've got a few panelists we've seen before and always great content that comes out. Great to see so many people joining us. In terms of giving the opportunity of actually expanding to Europe, there's a load of reasons why any seller should obviously look at expanding. I think the three main aspects that I tend to discuss with sellers is looking at the market opportunities, the market size, and stats, the population zone, which I'll come up to in just a second. Looking at diversifying your income streams through the various marketplaces and I'd also say looking at Amazon, it's always a very good place to start in looking at the different FBA solutions that make it so easy to actually expand. So in terms of to kick off on the market side, I think I often compare Europe to the US, because they tend to be the more popular markets.
Tom Meek: The US obviously being the largest. So if you compare Europe and the US for example from a population point of view and you group all of those countries within Europe, you're looking at 750 million people, compared to the US at 330 million. The opportunity is absolutely massive in Europe as a whole, as a territory in comparison to the US. Again, comparing the market penetration side, Europe upper 84% and the US slightly higher at 89%. So very, very close in terms of the market penetration. I think a really interesting statistic in comparison from 2019 turnover for Europe, is at 620 billion Europe, as opposed to 570 billion in the US. When you look at the size and the opportunity, not just as one market as UK, Germany, France is single markets, but as a group, as Europe with the UK involved in that for now also. The opportunity is massive and it's definitely worth getting into. In terms of diversifying your income streams, as I was saying, there's certainly different markets within Europe.
Tom Meek: You've got, as I said, the UK, Germany, France, Italy, Spain. You've obviously got the Netherlands, which is a newer marketplace, as well as Sweden. I think that's just going to be increasing and increasing as time goes on from what we hear from word of mouth at the moment. So I think in terms of the actual opportunity, there are so many different markets to set on. You could dive into each market and look at even the holiday periods for example. You've got to make the most of the hot, the different weather. You've got to make a difference of the different holiday periods that come up, the bank holidays and so on. So open yourselves up to those larger sales periods where you could drive more sales because of that. That's one aspect as well. Over to Amazon's point of view, so spot on to the last point of how it's never been easier to actually expand to new markets.
Tom Meek: I would say that Amazon, as well as other marketplaces have made it incredibly easy for different FBA solutions to be able to really control where you're triggering your tax liabilities and where your inventory is held, which makes it much easier from a logistical point of view. I think to understand the different FBA solutions, even just across the core marketplaces in Europe is absolutely essential. Just to run through them very, very quickly, you've got EFN, MCI, and Pan-EU. They're the three different FBA programs that are available. EFN is typically where a seller may start. More typically with Brexit, which I know Melanie you're going to discuss in a minute, but it's going to be something that's probably more relevant for the time being moving forward, especially into next year. EFN will ultimately mean that your products are stored just in the one country. As we all know, VAT is charged to the country of departure in our case. So in terms of where you're filling, that's where you need to be VAT registered. It's really important that wherever your inventory is held, whether it's under EFN under one country, or on MCI, which is between two and five countries, or the full Pan-EU program where your inventory is circulating across all seven countries.
Tom Meek: That's obviously going to make a big difference to where you're liable for VAT, which is obviously where we come in. There's a huge number of advantages. I think as you go through the program starting with EFN and then working your way up to Pan-EU. It ultimately gives you much, much more visibility when you're on the Pan-European program. You send your inventory just to the one country. Amazon then redistribute your products according to the customer demand. Then you benefit from the quicker shipping. So Prime eligibility, Prime badge. Obviously you've got the FBA listing on there as well and you don't get so many things at the cross border transaction fees as much, because your products are already closer to your buyers. I think typically from my side, a lot of people say, "I don't sell as well in this market." Or, "It's a bit slower in this marketplace." There products aren't close enough to their buyers. They're not getting the Prime promise, the Prime delivery. I think that's proven that that makes a massive difference in terms of how you expand and how you gain the most visibility.
Colleen Quattlebaum: Great. All awesome information. So obviously it's a huge opportunity. There's a lot of differences in Europe, compared to other marketplaces. You mentioned Brexit. So Melanie, with Brexit looming, is it even worth considering expanding to the UK right now?
Melanie Shabangu: I would say definitely. The UK has always been seen as the gateway to the European marketplace. I would suggest for anybody that is looking to start selling, chances are the UK is going to be the better option from a language point of view. Then just trying, putting their feet in the water to see if their product is going to get traction. But with Brexit looming, we are of course in the transition period at the moment, whereby come first of January 2021, we will be completely out. So I would say it is an opportunity to launch now. It is also an opportunity to still launch in 2021. I don't want to say there is a cut off date to this, because there isn't a cut off date. UK is a big marketplace from a ... being very, very buoyant. We know that the growth or market penetration is over 90%. Just because the UK people spend is about two and a half thousand dollars per year, as opposed to the other countries in Europe were by 1600. Even though it's still attractive, I would say that Brexit, it shouldn't damper people's spirits as far as if they shouldn't look at expanding into Europe.
Melanie Shabangu: Now because we are of course under the transition period, other programs will be effected. The likes of EFN network, just because Amazon is not going to be transmitting any inventory to other countries in Europe. So what may happen, you may find yourself that you have two shipments that are going on. You've got one that is coming into the UK where you've got another shipment that is going into Europe. So I would say depending whether you've started selling or not, if I was going to be starting to sell from scratch, I would look at getting two VAT numbers from the initial outset. One for the UK and another one for a European country, so that may be Germany, or France, or Italy, whichever one that is going to come out faster. I would say the timing is also very, very important for anybody that is looking to launch.
Melanie Shabangu: Like Tom's saying, the opportunity is out there. The turnover that we are seeing on the growth side of Europe, Brexit should not be an issue at all. Pan-EU program, of course we're seeing a lot of change on that. That the UK is going to be considered. It's going to be more like a four plus one, which means the four countries we're ... Sorry. The five countries were part of the Pan-EU. There was Germany, sorry. Poland and also Czech Republic, which are storage facilities for Amazon, but there isn't any platform there. Now with UK coming out, it's no longer going to be ... I'm sure they're going to come up with a name, to be honest, for it, which is no longer going to be the Pan-EU. But it means that if you've got your inventory in Europe, it will still be utilizing all the benefits that are available for the Pan-EU.
Colleen Quattlebaum: So as our tax expert, so you mentioned getting a couple VAT numbers is helpful. But what other tax obligations or things, from a tax point of view should sellers consider when they're looking to expand to Europe?
Melanie Shabangu: I would say definitely there will no longer be distance selling thresholds after the 31st of December 2020, which means if you're storing inventory here in the UK, it's going to be taxable only in the UK. We're going to be deemed as a third country, so ensure that you've got a VAT number in the country where you're going to be storing your product in Europe, because that will be triggering the VAT, the element. There will also be distance selling thresholds if you've got inventory in the countries like Germany or France and you're selling in between European countries. So those distance selling thresholds, they will still be available.
Colleen Quattlebaum: Thank you for that perspective regarding taxes, everybody's favorite piece. But in regards to compliance, Andy, can you speak a little bit about product compliance? What tips do you have for sellers to ensure that their products and processes are complaint with Amazon and local rules and regulations? I think you're on mute still Andy.
Andy Hooper: I'm muted. There we go. So thank you very much for having us Colleen. Thank you very much for organizing it. For those who are wondering why I'm in a strange car, I am on vacation. But when I heard that guys were putting this together, the panelists were just world leading speakers, I just thought we had to be a part of it. So thank you very much for putting it together. So for the compliance side, what we're really talking about now is we're not now talking about your VAT. We're really trying to focus specifically on the compliance of your product. Product compliance is one of the things that a lot of people get suspended for, or they get removable, un-fillable inventory when they've got or start selling. Amazon specifically has got a lot hotter on this in recent months, where actually you've now got to upload your labels of the product before you start expanding.
Andy Hooper: Obviously in the car, I'm then looking around thinking, I'm not talking about the label for the SKU of the product. I'm talking about the product label. So I don't know how well that's going to come up, but you see where I'm going. It's the label that's on the actual product, not the SKU of the product. We need to make sure that, that is complaint. There are three types of things you need to consider. You need to consider what regulations the product falls under. You need to consider the ingredients of the product itself, if it's actually compliant with the EU regulations. Not just send you're US product and hope for the best, because the regulations are different. Then the third part of that is making sure that your label is complaint.
Andy Hooper: So the different areas that you might need to think about are electronic products, we're going to come more into that in a moment. Toys, cosmetics, medicinal products, footwear and textile specifically, medical devices, food, supplements. There's a whole load of others that we can't go into. But really you need to think about, you need to check the compliance. Just because somebody else is selling the exact same product on Amazon today, that doesn't mean it's compliant. I want to make sure we're really clear on that, because the biggest thing we get is, "Yeah, but someone else is selling and it's there." We're like, no. Just because someone else is doing it, it doesn't make it right.
Andy Hooper: Getting the compliance of your product is absolutely crucial. I think that what we've seen over the last two to three years is that Amazon specifically is getting hotter on that. The government in each of the European countries are getting hotter on that. I'm going to say Europe and include the UK in that at the moment, because we're still part of the EU. I know Melanie just talked about Brexit, so I'm not going to go into that. But we need to consider the EU are the EU regulations. Now there are some anomalies per country that you do need to be aware of. Really the first thing is to think about when you're bringing your product over. Is what regulations does my product fit under? What do I need to do make it compliant? Just sending your product with a US label on it, with the US regulations is not compliant. So make sure we're all clear on that. There are lots of different areas. We can speak for hours and hours just on the compliance of the products.
Andy Hooper: If you sell anything that could harm someone, and that could be putting a glove on, plaster, an eye patch to consuming health supplements and everything else in between. Then you really need to make sure that product is compliant before you ship it. Because what happened is, is that if they get to the border and customs open it, you'll just get held behind. I'm going to give one quick example here. we had someone that has beach carts. So it's a cart that goes along the beach, four wheels, little frame on it with a bit of canvas, and they just pull it along the beach. That got held up in customs because the packaging had a seat belt on it. Because they had a seat belt on it, it was deemed that it might be for use of a child, therefore customs wouldn't let it into the country. They've had to spend 5000 pound putting it through testing before they could even release it to Amazon.
Andy Hooper: So we've talked about supplements or electrical goods. This is just something, it's a beach cart. But because you've got a strap on it and a child could be strapped in it, it has to reach British standards.So that's just one quick example. Now what I want to touch on before we move on from this, I know I'm going pretty quick to get a lot of this in, is the responsible person. Basically in the 16th of July next year, there's something cool coming in we called the market surveillance regulations. What that means is that anyone who has a CE marked product, and a CE mark is basically a stamp of approval here in the UK for lots of electrical products, toys, and product safety. If you have a CE mark product and you or the product is made or outside the EU, then you must have A, a responsible person for the product in the EU. Secondly, an address where someone is responsible for that product.
Andy Hooper: So for example, if you are selling this iPod or electrical ear pod devices, then what you'll need, is you'll need someone who is responsible for that product in the EU and their address on your product, so that if someone, let's stay trading standards here in the UK, it's the government agency that is in charge of making sure everything is safe. They can knock on the door and say, "Hey, Mr. Air Pod owner, you're the responsible person. Please can I see the information on this file." We want to see a product information file, safety data sheets, the brand owner, and a sample of the product. So they're two very different things that you need to consider when you're expanding. You've got the compliance of your product, make sure it's compliant. Secondly, come the 16th of July next year, you need to make sure that you have a responsible person for your product if you have a CE marked product. Of the thousands of sellers that we work with, I would say probably 60 to 70% of sellers all have CE marked products. So this is absolutely crucial.
Andy Hooper: Amazon for example, has already put on their website a response on backend of Seller Central, somewhere where you can add the responsible person information. But I want to stress, someone has to be responsible for those products at that address. You can't just get an address off the internet and just say, "Yeah, that's where the responsible person is." It won't wash. That was a very quick fire. I hope that was going some right.
Colleen Quattlebaum: A lot of great information and I love your energy. So that was really, really important. We've talked about Brexit. We actually have a lot of great resources that we'll be sure to share with everybody after in an email following this webinar. Then one of my peers Becky, if you want to put any links in the chat, that's helpful too. AVASK has an awesome eBook all about Brexit. You're welcome to download that. Then Andy's team at Global eCommerce Experts, they have a great PDF that talks about the responsible person. So we'll be sure to include that as well, as a guide to the six steps for instance, for selling in Amazon Europe. So we have some other resources we'll be sharing with you throughout the call, but if Becky gets a chance, she'll pop one or two of those links in there.
Colleen Quattlebaum: Melanie, Andy, is there anything else that sellers need to consider when expanding to the EU? We're in the middle of a pandemic, cue four is upon us. Anything you want to touch on regarding the timing right now? Melanie, I think you're on mute.
Andy Hooper: We’re both going. Go ahead Melanie.
Melanie Shabangu: I would say for my side with the timing, you need to decide to expand into the EU only when you're ready to do so. I know we can sit here and push people to expand into Europe. You will know your business. I've been asked this question many times, that at what stage should my business expand into Europe? Now, as well as being into tax, I'm also an accountant. If my client was going to be asking me as to when you think I should be expanding maybe to the US, I would look at their experience now, because they're asking me for a guide. Do you have solid experience? Do you understand the marketplace that you're currently trading in, which is the US side say for instance or the UK side? If you have that solid experience, great. Turnover wise, what do I normally see people expanding into Europe? I'm not going to say anything and about somebody who is looking to expand today, because you could just decide that I will start trading in the UK straight up. That's going to be my first market.
Melanie Shabangu: But what you don't want to do, is to be launching out in the US and then all of a sudden, here's Europe. I heard about Europe and you go into Europe straight away. You want to gain that experience. Now from my point of view, I would say the moment at least you are only a really humble turnover of maybe half a million, that's the point that I would be looking at launching my products into new countries, because I would expect that... Depending, because sometimes when do you reach half a million. Do you reach half a million in six months? Do you reach half a million in a year? I've seen some people that own a half a million in the US and they've decided to go straight away. I would say with those people, just ensure that you've got sufficient funds to find your inventory, because you need to make sure that you can fit the best. Europe, it's got its own population. I think we're talking about 747 million population wise. US, about 330, something like that. So it's almost double or over double the amount of the US.
Melanie Shabangu: So you need to ensure that you can seriously...you've got the sufficient funds for you to expand into Europe. If you look at the impact of COVID, I've seen my clients that left the European market back in 2018, and I don't know what's happened, especially the month of August went by. Everybody has come back. I don't know how many emails I've received people saying, "Melanie, I've started selling again." I was like, oh my God. You're taking me back to 2018. You're back again. "I'm back with a new product. I hear that Europe has gone absolutely crazy." Of course. The eCommerce growth is expected to grow by 12.7%. Now the growth for Poland alone per year has almost been estimated around 12 to 15% pay your own growth. Also, their eCommerce sales, they're expected to hit at least 844 billion. Now that as huge. As you guys know, I know we're not talking a lot about COVID, but we're still in COVID. We're still working from home some of us, except for Tom of course. But we're still working from home and we're still shopping online. I don't know how much I've spent on Amazon ever since we went on lock down.
Melanie Shabangu: Honestly, I was actually saying to my husband the other day, I wish I had links for all my client's products because I'll be buying from them only. Just because of the amount of money we've spent online. We've seen that the digital behavior has actually changed. I'm not just going to be saying from the likes of 18 to 45 years like we've always said. Everybody is shopping online, so it's seriously...it's not rocket science for you to expand into new markets, especially during this place. In Germany alone, there is at least 25.8 million people who are expected to be Prime members by the end of 2020. Prime members, not just eCommerce shoppers, Amazon Prime members. That is huge in terms of numbers. Moreover, we've seen a new platform being launched about a week ago; Sweden. Now who would have thought? I would have thought that maybe Poland and Austria was going to be launching first, because my clients, they pass the distance selling thresholds more or faster in Austria than in Sweden.
Melanie Shabangu: So I was actually shocked and I wouldn't seriously be surprised to see Amazon launching more platforms in the near future or before even end of the year. I'm sure there will be those that are going to be coming through. There is Netherlands as well, which has been recently launched. Again, that is another nice platform. Netherlands, it's a small population, but I can tell you now, online penetration again in Netherlands, it is absolutely high. So I would say COVID of course, it's not a good word and I don't like saying it, but it has its own benefits that we've seen. I've got some of my clients, they never thought they'd have two million cash in the bank accounts during this time. We're looking at investment opportunities all of a sudden. Even down to knitted products. Knitted products, who would have thought that somebody would have 500 thousand cash in their bank account who sells knitted products? It was just a business that was just plodding on. Things, the whole eCommerce is absolutely changing. Sorry Andy to eat your time. I'll leave you to continue on that.
Andy Hooper: No, no, no, no. It was great Melanie. I love it. That's great. I just want to really piggy back off the back of that. I think there's a couple of things to say. When launching into the EU, I think one of the key things to say is, when you want to launch, you know when's right to launch. Exactly as Melanie said. Also, think about because of COVID, we're in growth market. Everything is growing, so you want to launch in that growth period. I think that actually what you're going to see is actually between now and Christmas, is we're going to see massive, massive growth, strides and strides. Now is the time to get involved in that if you're ready to do it. If you're not ready, don't rush it because quite often we'll see people that rush it, end up making it being a little bit crazy and it never quite works. I think the other thing to say is that what you really need to think about is, what does that process look like? When you're looking to expand, you want a step by step guide that's going to do that.
Andy Hooper: I think I currently mentioned earlier we've got a six step guide that talks to people about, what are those steps you need to take in order to make that expansion a success? The expansion, you know, making a successful expansion isn't just alone about shipping products. There's a lot more to expanding to Europe, then just shipping your products to Amazon and just hoping for the best. All right. I'm not going to go on, and on, and on about it, but if you need a guide and you need a process, just take that and use that. Just follow the process and you will be successful. So I think that wraps that off. I think we duffed out that well Melanie. Thank you.
Colleen Quattlebaum: Thank you. Great conversation. I appreciate it. So we've talked about all the different countries and there's different shopping behaviors in every single country. From a listing optimization and localization standpoint, Jana, can you help us understand the importance of localization and when you should be translating your product listings? Just more information regarding translations there in Europe.
Jana Krekic: Definitely. When it comes to Europe, we're talking mostly about Germany as the biggest marketplace in Europe. Apart from the UK, of course because a lot of US sellers, they just want to go to UK because of the language barrier, what Melanie has previously mentioned. But a lot of them want to sell in Germany as well. People do speak English in Europe, but it is more efficient to have your listings translated before you start selling on international marketplaces because the keywords and everything they're going to get, they're going to be highly searched volume than in the native language, than when you use English words. A lot of languages have the mixture of both English and the target language, the keywords. In a lot of cases, you would put them in back end. You would not put them in your front end listing because a mix of french language and English does not sound right. Of course, you also have to make sure that if you still want to use the English keywords in your front end listing, sometimes the English word means something completely different in the target marketplace. It can mean a lot of crazy stuff.
Jana Krekic: We had one example of a listing, which was a chewing toy for dogs. The seller left the word pet in the title. It said pet and then chewing toy. In french it would read pet as fart. So it would be fart chewing toy for dogs. So you really have to pay attention. Don't mix the languages before checking what they actually mean. So definitely number one suggest that everybody translate those listings to the target language marketplaces. You should definitely use translators who know what they're doing. A lot of sellers, they just go to Fiver.com. There are a lot of great translators out there, but you really have to know that they really know Amazon, they know what they're doing. Otherwise, everybody can translate how to clean your vacuum cleaner. But how would they incorporate a good sales copy for marketplace. Do they know the language of the title? What's their keyword strategy? Do they know how to do keywords in any of the tools, or what is there in a hidden sales strategy? Because the whole point is to make a good sales copy and not just have word by word translation.
Jana Krekic: Without using any keywords, your product is not going to pop up. So it doesn't really matter how good that translation actually is. With no keywords, you're not going to be relevant for any of the keywords. This is also what brings us to the topic of the localization. There's actually even if you hire someone to translate your listing from the US to let's say German marketplace, you're not going to have the same style of the marketplace. US style is very salesy. It has a sales pitch. People are going to force you to buying products. Buy it now, what's there to wait? Buy our product. Germans don't like that. They're really straight forward, straight to the facts. Give me the benefits of the product that are going to solve my problem. Not to persuade me into buying your amazing product. I always take an example of this glass espresso cup where one bullet in the US listing says, cool, cooler, coolest. The German's say thermal isolated glass. It's like, show me the benefits. You're not going to burn your fingers. I don't care about all emotional, metaphorical stuff there in a listing.
Jana Krekic: It's also very interesting to know that the, for instance German marketplace, German Amazon is the marketplace from all the other worldwide marketplaces that gives out the most refunds. So you really want to do things properly. You don't want the people to think that your product is something else and then you're just going to refund and they'll send it back. So you really have to understand what the marketplace is about. Who are you selling to? You just really want to convey your message the right way to other foreign marketplaces. Otherwise, if you're doing it word by word, you're definitely going to fail. Also another thing, is that a lot of sellers, they translate keywords just as they are. We've seen this mistake repeat to a lot of different sellers. Eight figure, six figure, it doesn't really matter for product sellers. A lot of them make mistake by just giving a list of keywords to a translator and just do it. It's really important to understand that not every language has the same structure.
Jana Krekic: For instance, German language has a lot of big compound words. If you give an English keyword list to your translator, he might not be using this compound word which you want to be ranked for, for the German marketplace. So never do that. Never use Google Translate. Google Translate doesn't know anything about context and conveying this message I'm talking about. So basically make sure to use people who know what they're doing. It's not only Amazon sellers that have a problem with that. Huge companies have failed miserably on foreign marketplaces, just because they failed to identify their target audience. They failed to localize. Just look at Starbucks in Australia. They completely failed to adjust to the coffee culture out there in Australia. They just pursued with their own product and they had to at the end of the year, they had to close every single coffee shop over there. Or for instance, Kim Kardashian. She just decided to launch her shape wear firstly called Kimono. Then the Japanese government, they were in such a shock. The Tokyo mayor, they called her and they told her, "Look. You really have to change the name, otherwise you're not going to be launching this at all."
Jana Krekic: They did that literally in the nick of time before she was to launch her shape wear collection now called Skims. These are some really, really big names in the industry and you would've thought they would definitely do their homework. This is something that a lot of people don't actually think about. But I think this is very, very important. I would say the localization is maybe even more important than the translations. You have to grasp the audience, the target audience, who you're selling to. You really have to adjust your way of addressing these people, the style, the choice of words, word order and stuff like that. It's very, very important to do that. Especially this also applies to all the new marketplaces. As we mentioned Sweden, but for Sweden there's a lot of people speak English over there as their basically native language. It's amazing with Sweden and expect really a lot from the Swedish marketplace because they have 90% of internet sales. Online sales in 2019 were 8.24 billion. I think that's absolutely outstanding. Having IKEA and Nelly, for instance, at their marketplaces. I think home furniture is very popular, just because of the IKEA worldwide brand.
Jana Krekic: Clothing, footwear, beauty, and healthcare products, I think they're very important for overall all the new marketplaces as well, because I think the health and beauty care products rank well wherever you sell them. But just make sure to check the categories, which are available on these new marketplaces, because you don't want to ... You're selling, I don't know, a cell phone equipment that has not been rolled out as a category on various marketplaces. So whatever you do, you really have to do the market research and the keyword research for each marketplace separately. That's absolutely crucial for all new sellers on all international marketplaces.
Colleen Quattlebaum: Good advice. Definitely. Those are all really good examples. I love hearing the real life examples. It's worth that extra time to invest in your products, to launch it the right way. YLT actually has a great checklist for sellers launching products into a new marketplace. Becky just shared that in the chat, so definitely take a look at that link when you get a chance. We're launching products. We're talking about sending products overseas. Andy, should sellers consider a third party warehouse? If so, which countries allow this or where can they do this?
Andy Hooper: I think it's a great question. It's one of the questions we get asked quite a lot. I think the first thing to say is that when you're initially looking to expand, you should use FBA. FBA is an amazing tool, whether you're in Pan-EU or you're using the European Fulfillment Network, that doesn't matter. I think the key thing is that you use FBA to start off with, because unless you can't use FBA and you've got an oversized product or you've got products that are classed dangerous, and Amazon hasn't got any room in their dangerous goods warehouses. Outside of that, you should use FBA to start off with. Amazon have never come out and said, "The algorithm says this, this, and this really." But what we do know, is those that use FBA to start off with, do have a slight acceleration.
Andy Hooper: We've got a warehouse. I'd love you all to use my warehouse, but I'm being totally upfront that really you need to...if you pay, you pay attention. Use FBA to start with. There is times where you don't want to use FBA, you can't use FBA, or you've outgrown that way of doing that. I think there's a couple of different things to say. It's that you can use warehouses across Europe. We've got one in the UK, Germany, and the Netherlands. It works really, really well for different sellers based on different formats. Try and use just one to start off with, because it just makes your life a lot easier. When you're looking to expand and you're in a completely foreign market for most of our sellers, then actually making it easy is the best thing that you can do. Having one point of contact or if you've got loads of warehouses or loads of agencies you're working with, that really makes it really, really difficult. Try and hone in, and work with just a couple. Don't make it too difficult for yourselves because you want to make it as easy.
Andy Hooper: Warehousing is exactly the same. With Europe, look at where your goods are going to be easiest to get in. Really, Germany at the moment is really difficult to get product into Germany. We would suggest the UK or the Netherlands, whatever works best for you. We can have that conversation with sellers about that. Bring the goods into ... if you're bringing containers in, then bring a container in. What a lot of our sellers they do, is they bring that in. We unload that. We ship half to Amazon and we keep the other half in the warehouse and fulfill to the rest of Europe from our facility. Because they might be working on Amazon, but they might also be selling on their website, eBay, and a whole load of other platforms because there's many of them. Having the ability to be able to scale, means not only have you got products in Amazon, but you've probably got them in a third party. You can get them QC checked.
Andy Hooper: All those things are really, really critical to making sure that you're moving your products forward. I think the other thing is that we've got the digital sales tax that's just come in, in Amazon. We're just seeing a 2% increase on fees. Now that's not 15 to 17% for example. That's 2% on the 15%. So don't think my costs have now gone up 2%. It's not quite true reflection on cost, but it has gone up. What we know is that Amazon will be putting more costs in, come to Q3, come Q4. Those costs only ramp up. The more storage space they've got ... I'm sorry. The less storage space they've got, the higher the fees. It's a based on demand thing. You need to consider where your products are going to be based. If working with a third-party that can do Seller-Fulfilled Prime is what you want. I think Tom was talking right at the beginning where we're talking about when people get that product really quickly, we see the uplift. I think that's really, really important to think about. Just trying to think of those other questions. Yes, a digital sales tax.
Andy Hooper: There's other options that you can use. Really, you want to make sure ... So that's where I was going. So COVID, Amazon shut its warehouses. If Amazon shuts its warehouse again, where are you going to send your product? The least you need to make sure you've got the ability to onto a 3PL straight away. If we Europe has a second spike, we already know that Amazon will prioritize those products. So history tells us. We all know that history repeats. It's that if Amazon sees an uplift or an issue in certain countries, they're going to shut our FBA down. So you need to make sure if you're already selling, that you've got a 3PL involved, because you might have a container on its way over, or your listing contained the load. You might be sending five palettes over straight to FBA. All of a sudden, you've got nowhere to send them.
Andy Hooper: As soon as they're sat at the dock, one pallet bed in our warehouse costs about 68 pounds. In a customs warehouse, it's 160 pounds a day. So you don't want to have anything in customs any longer than you need them. So basically, when do you need a 3PL? We advise you probably sort one out as you're starting. You don't have to send anything there. You've got the flexibility. If you're bringing a container in, then you definitely need one. If you want to fulfill from other platforms, you also definitely need one. You can use UK, Germany or the Netherlands. We would suggest starting in the UK and then going and growing from there. So hopefully that answers that Colleen.
Colleen Quattlebaum: Definitely. Yes, thank you. So there's a lot of costs involved, but there's also a lot of opportunity as we mentioned. There's a lot of opportunity to make good money and sell a lot overseas, but we want to make sure you're getting the most bang for your buck. TJ, can you help us understand how sellers can ensure they're getting the most favorable exchange rate when they're doing business internationally?
TJ Hyland: Sure. 45 minutes in, here I am. Happy to chat about this. What's important to realize, is that when you're selling on a marketplace internationally, you are going to get paid in whatever currency that is. Whether that's pounds, euros, Canadian dollars, Mexican pesos, whatever it may be. One of the easy solutions to that is to have an alternative such as Payoneer to help bring your funds that you earn in foreign currency, back to US dollars. If you look at it, a lot of the marketplaces, Amazon included will convert your pounds or euros back to dollars, but it doesn't give you much freedom or flexibility to do what you want with your funds. One of the things we always talk about and especially with conjunction with AVASK, is making sure you pay your VAT obligations. Where in the past, it might've been a little wishy washy to see if you needed to pay VAT. Probably in the last two and a half, three years since VAT numbers and EORI numbers are absolutely mandatory, and now the governments of the various countries have cracked down on Amazon, you have to pay your VAT obligations.
TJ Hyland: What we do is what we help businesses, is to make those VAT payments. So when you hold your funds that you receive from your sales on the UK, or sales anywhere in the EU, what you can then do is make a payment to HMRC or any of the other VAT authorities throughout Europe completely for free. Why that works, is if you were to just take your pounds that you made from your sales in the UK and had them automatically converted back to US dollars and sent to your bank account, that's good and you're going to get your funds back probably a little bit faster. But what it doesn't do, it doesn't give you much freedom and flexibility to use your funds as you wanted. Now if you have to go then make a VAT payment or supplier payment, or a payment to a vendor, you're going to have to use either your bank or an alternative FX company, or something else where the fees are A, going to be pretty high in terms of a flat fee. Sending an international bank wire is anywhere from 40 to 50 US dollars. Then the exchange rate is going to be on top of that.
TJ Hyland: Banks that have way more overhead, typically charge five to ten percent on the FX. Just to recap that is, if you had an account like we offer at Payoneer where you can hold your sales that you make overseas, and then give you the ability to make payments out of those accounts pretty easily. The other thing I wanted to talk about is in regards to capital. We actually launched a working capital solution last year out of customer feedback. I think it's an incredibly relevant conversation for sellers of all levels, especially if you're considering expanding internationally. Because you should not disrupt your main market or your well oiled machine if that's your US business to expand internationally, even if it's just listing a couple products. So when you are expanding internationally, there are a couple of things that you have to consider in terms of costs. So setting up VAT or setting up some sort of logistics solutions, translations and optimizations of your listings and your site. All of these things do have a cost.
TJ Hyland: So if you don't have enough funds to front that, you might want to look into additional work and capital solutions. It's something that we offer for sellers. It's designed specifically for Amazon and Walmart sellers. So it's a pretty optimal product and happy to chat with anyone about that. I think we're actually going to-
Colleen Quattlebaum: We'll go ahead and Becky will actually share the link.
TJ Hyland: Yeah, the link.
Colleen Quattlebaum: To the instant capital advance there, for anybody who wants some more information. So, thank you, TJ.
TJ Hyland: No problem.
Colleen Quattlebaum: This was a lot of great information. I do see some questions in the chat, so I'd like to take a few minutes to tackle some of those. Then we can add any other last minute tips for expanding into Europe. So we have one from someone, this is geared towards Jana. It says, "Our product is already listed and translated on Amazon in Germany. It's sold by Global Store US, an Amazon global store. These ship from US Amazon warehouses. For us to sell Prime FBA, should we create a brand new listing or become a new seller on this listing and send inventory to FBA Germany?"
Jana Krekic: I can not answer that. We don't do the inventory or the manager. Maybe Andy can help with this?
Colleen Quattlebaum: Okay, sorry. I actually had read the first part that mentioned the translation. So before I read the whole thing, I geared it towards you and then I finished reading. It's more inventory related.
Andy Hooper: I think what they're trying to say there, is that their product is listed on dot com. People are buying it, they can buy it in Germany and it just gets shipped over from there. What they're doing is they're paying huge amount of fees in doing that, in order for that to work. So what we would recommend, I think the answer is if you're seeing sales like that, one, you're already selling products. You've already proven that the model, there's a demand for your product. So I would say, yes you should expand. You'll need to open up an additional seller account in Amazon.de, but that will do the whole of Europe all in one. So you open up a European account. If you go into Seller Central and go to inventory sell globally, you can do that literally the press of a button. Now what you will need to do is you'll have to go through the whole setting up an account. Amazon calls this knowing your customer.
Andy Hooper: So you go through this whole KYC process to make sure that you are the right person, you're compliant. The business person, the address, and all those different things that go with that, so you will have to go through that process to set up. You will have to register for VAT. You will have to make sure your products are compliant, but you've already proven that that works. So I would say yes, you do need to set up a additional Seller Central. But just go to inventory tab, sell globally, really easy. You need to think whether that's right for your business or not because you will be triggering additional costs. VAT for example, in order to make that happen. You've already proven that people want to buy your product.
Colleen Quattlebaum: Thank you. Nikki, the one who submitted that question, hopefully we answered your question. Thank you Andy. We definitely have another one here and this one is for you Jana. The seller asks, "What if I already launched into a new marketplace and I used Google Translate?" Uh oh.
Jana Krekic: A lot of people do that. Look, if you have a good product and you have good pictures, good A+ content and stuff like that, your product can sell well, even if you have a poorly written listing. But just imagine what if you have an optimized listing with keywords and everything done right, how much more you could increase your sales. What I would suggest is seeing where your product is right now. Maybe by some wonder Google Translate got some keywords in the titles so you may be ranking for something. Then I would always ask for an opinion about getting a feedback about your listing, or giving it to someone to tell you what are the low hanging fruits on the listing for instance. Then giving a solution for optimization. I'm absolutely sure that you, apart from maybe one accidental keyword, don't have any other keywords in your Google Translate. I would just completely probably ... I don't know your listing, but I would probably redo the whole listing, probably get the better structure. Basically, as I said, convey the message you have in your home marketplace to a foreign marketplace.
Jana Krekic: This is not a disaster. It is a disaster on one hand because a lot of people do the Google Translate and then they go with this and just ruin their honeymoon period. You could have done so much better. This moment you spent a lot of time, a lot of money. What is really good is when you optimize your keywords and your upfront listing, you can use these keywords, which are probably good in your PPC campaigns. So you can basically just do a lot of things at once and save a lot of time when you plan ahead. This is just my advice. It's not the end of the world. It's going to take a little bit more effort to optimize and get you back probably to page one and to the index for the keywords you want to, but it's not the end of the world definitely. So that's good news.
Colleen Quattlebaum: Thank you. We have a few more questions. I'm actually going to share my screen again because I do want to make sure that we just share a couple of the special offers that we have from everybody who's here on the call. So I'll let all of our attendees just take a look at those and read those special offers. We'll also send them out in an email after this. We have the recording ready to go, but a couple other questions. We have a question here for AVASK. "What should I do before December 31st? Is there a way I can mitigate inventory issues that will arise because of Brexit?"
Tom Meek: Of course. Melanie, go ahead. You can take that one.
Melanie Shabangu: No, you go Tom. You go.
Tom Meek: I'll start off. I'm sure you can add. This is a really, really good question and one that's getting asked more and more at the moment, as we obviously get closer and closer to the end of the year already, which is scary in a way because this year's even gone. In terms of registration, ultimately it depends on your current situation. I would say that if you're selling from the UK and you're again, under that European fulfillment network, then some will put your eggs in one basket at the moment. I think to avoid any disruptions and as you say, problems with your inventory management and so on, as Melanie said earlier, you're going to want to register for VAT in another country. Such as Germany or most likely the next biggest marketplace for you, which for most sellers is either Germany or France. I think what's really, really important is it's not an overnight registration. These things can take two, three months from the point that you submit the application, if not sometimes even longer for Germany.
Tom Meek: Bearing in mind that time frame and getting prepared for that, and making sure that you've got that VAT number in place so that you can still keep that supply going into Europe and then circulating other countries as well. Potentially, even the Pan-European program as an addition to that, to make sure that you're maximizing your visibility.
Colleen Quattlebaum: Okay, thanks. We have another question here about VAT, so I think maybe for Melanie. If marketplaces were to remit my VAT next year, what do I need a tax advisor for?
Melanie Shabangu: That is a good question. What's happening is eCommerce marketplaces, they are going to be remitting sales or funds to the tax authorities, because they believe that they don't get all the money that is due. It's about over 20 billion, that is the tax authority have got a hold on. So they need to recover that. Basically, marketplaces are taking over your responsibility that you were doing previously of paying the tax authorities, because I wasn't paying before. I was preparing the reports and remitting them to the tax authority and showing them to you. So I'll continue doing that. So what they are doing, is they are taking your responsibility because you are the ones that were transferring the funds into the tax authorities, not myself. Which means, it saves you now, almost all of a sudden, the hassle of you remitting funds into the tax authorities. So you don't have to do that, but we will have to file the report, which is proving the fact that, yes. Whatever Amazon remitted or the marketplace remitted is correct, or it's not correct actually.
Melanie Shabangu: You imported products into the country. You're supposed to be claiming import tax. So, instead of you paying a bill of 100 thousand, actually no. It's 50 thousand that you're supposed to be paying. So for us, it's going to be correction reports because you would have filed money ... It's more like you're paying in advance before the report is submitted. All of a sudden you're going to be having a refund. Of course, that is still under discussion as to how it's going to go. Because as you can understand, Europe is very, very complex. But at the same time, they need the money from the marketplaces. So let's see when they launch that, how they're going to be launching it. We work very closely with Amazon. We will work very closely with our clients as well. We're going to let you know as to how that is going to pan out. But they are taking your responsibility, not our responsibility as tax advisors.
Colleen Quattlebaum: Very good. I think we have time for one, maybe two more questions. TJ, we have one about using a currency company. This person is asking, "When should I start using a currency company?" Oh, I think you're on mute.
TJ Hyland: Sorry. I was trying to find the mute button. There's a couple of discussions about when you should start using it. My personal belief is from the minute you start selling and you set up your Amazon account and you set up your disbursement methods, you should set it up with the idea of not changing it again. When you start to expand to the EU or wherever, the UK, Payoneer or any other company will be able to give you a receiving account to put in those marketplaces. Then you can receive and transfer those funds back to your own account. Like I said, once the funds are there, it's not like there's a fee to hold the funds or anything like that. You're really just looking to get more control over your funds. Even if it's small amounts to start and you scale, and as everyone on this call hopes that businesses are scaling as they go overseas, the opportunity is there for you. We can absolutely help with that.
Colleen Quattlebaum: Great. Well thank you all. I know we are at time, so just wanted to thank everybody for joining us today. Hopefully you gained a lot more information, and tips, and advice and that you know a little bit more about what is required to make that leap into selling into Europe, and in order to do it successfully. Take the time, do the research, work with some of these great companies to help make yourself successful. No time like the present. So thanks to Tom, Melanie, Andy, TJ, Jana, all of you for joining us today. This was a lot of very helpful information. As I mentioned, we will send a recording of this webinar out to everybody over email, as well as all of the resources that we shared and the special offers. If you need to get in touch with any of these companies, you can feel free to email me and I can help you get in touch with them if you want to talk to any of them directly. So hope everybody has a great day and thanks again for joining.
TJ Hyland: Thanks Colleen. Thanks guys.
Tom Meek: Thank you.
Jana Krekic: Thank you so much for organizing this. Take care guys.
Andy Hooper: Bye.
Melanie Shabangu: Thank you.
Colleen Quattlebaum: Bye.
Andy Hooper: Thanks everyone. Have a great day. Cheers.
Colleen Quattlebaum: Thanks. Take care.
Andy Hooper: Thanks Colleen.
Colleen Quattlebaum: Bye. Enjoy your vacation.
Melanie Shabangu: Thanks. Bye.
Andy Hooper: Thank you. Bye.
Melanie Shabangu: Bye Colleen.
Originally published on July 22, 2020, updated August 21, 2020
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.