Originally published on July 9, 2020, updated July 31, 2020
Are you currently selling on Amazon.com and looking to get started on Amazon Europe? Top industry experts and former Amazonians, Carina McLeod and Mark Pettit discuss how to sell on the Amazon Europe marketplaces from the USA in this webinar.
Some of the topics discussed in the webinar include:
You can watch the webinar above or check out the show notes below for the recap and a full transcript.
Ready to learn everything you need to know about starting a successful business on Amazon Europe from the USA? Get the lowdown as eComEngine’s Liz Fickenscher is joined by two former Amazonians, Carina McLeod, CEO and founder of eCommerce Nurse and Vendor Society, and Mark Pettit, CEO and founder of Skye High Media.
In the presentation, you’ll learn about several important factors you need to carefully consider before you get started. For example, which market will you target first: the UK, Germany, or another country? Will your Amazon business in Europe be impacted by Brexit? Will your listings need to be translated? How will you store your inventory abroad and will cross-border fees cancel out profits? This webinar addresses all of this and more, but for now, let’s review some highlights.
Thinking about global expansion? As Fickenscher pointed out, the first thing sellers tend to ask themselves is, “Should I go ahead and launch on all of the marketplaces at the same time, or should I choose just one?” It’s a very important question, and one you absolutely must explore.
Amazon EU covers all six European marketplaces — the UK, Germany, Italy, France, Spain, and the Netherlands. According to McLeod, “Every marketplace needs to be treated differently because there are difficult cultures, languages, and they are effectively separate accounts...If you’re thinking of launching on all of them, take a step back and determine whether you can effectively invest in all of those marketplaces.”
When researching which countries offer the most opportunity, you’ll find that the UK and Germany have the most sizable markets. McLeod explained that your category matters too. “If you have a product that is more summery, there might be more of a market in Spain and Italy, even though they are smaller,” she said. “They could still have a higher demand for your product.”
There are some areas where you should tread carefully. “Do not assume that your European customers understand English,” McLeod warned. To provide the best experience, you’ll need to rethink your listings, packaging, instructions, and more. Do not rely on Google Translate — use a native, certified translator for your product listings. Also, you’ll have to pay careful attention to how Brexit may impact your success on the UK marketplace as several issues regarding that situation have yet to be resolved.
There are three different options for FBA within Europe. As McLeod explained, sellers using the European Fulfillment Network (EFN) will store their inventory in one European country, and then sell to others. So, if your inventory is in the UK and your customer is in the UK, they could get next-day delivery. If a customer in Spain orders a product, the item will appear as Prime in Spain with a longer lead time of two to three days. Additionally, in these situations, the seller must also pay a cross-border fee.
If you notice those cross-border fees starting to add up, you might want to check out Multi-Country Inventory (MCI) which involves storing some inventory in the countries where you have the most demand. If you choose the UK and Germany, and keep product stocked there, you’ll be able to offer next-day delivery to customers in those countries. You’ll still need to pay cross-border fees for shipments to Spain, for example, but keeping inventory where you have the most customers should cut down on costs.
Finally, with the Pan-European option, you’ll effectively send your inventory to Amazon, and Amazon redistributes everything across all marketplaces. All of these options, however, could be impacted by Brexit, so it’s best to do your research before choosing a method of fulfillment.
Every country has their own rules surrounding product compliance, so it’s best to not assume you’ll be able to sell on the European marketplace. According to McLeod, Amazon may not offer the best guidance, either. You’ll be provided with basic advice, but your ability to sell will be determined by your product category.
In some situations, you won’t have much trouble at all, but in others, selling on the European marketplace could require major effort. For instance, if you’re in the grocery category, you may need to overhaul your labeling, particularly the list of ingredients, and translate into different languages. McLeod noted that the first thing you’ll want to do before going into Europe is to check that your product doesn’t have any additional legislation or require any additional packaging.
Pettit added that taking this step is the bare minimum. One suggestion he offers is to check the list of FBA-prohibited items that you can’t sell. “Look at Amazon and then if you do see other brands selling products and you're like, ‘But I thought that was prohibited,’ it probably is. It's just there's thousands and thousands, tens of thousands of brands selling on Amazon, and Amazon has a relatively small team that's going to be able to go through that,” he said.
This short recap only scratches the surface of the wealth of information covered in this webinar. Fickenscher, McLeod, and Pettit discussed a variety of topics with a specific focus on localization and translations as well as advertising strategies for Amazon’s European marketplace. They also answer thought-provoking questions from attendees.
There are so many opportunities to expand with Amazon European marketplaces, but you need to find an effective strategy. With the right preparation, you could open up a whole new world for your Amazon business. Don’t wait another minute — watch this fantastic webinar and unleash the possibilities!
Liz: I'm Liz Fickenscher from eComEngine. I'm the industry liaison here. I do a lot of our webinars and talk to a lot of industry folks like our friends Carina McLeod and Mark Pettit. Carina is with eCommerce Nurse and Mark is with Skye High Media. We still have a couple of people rolling. Okay. All right. I think we're ready to get started. I'm going to share my screen and we're just going to roll through the agenda and then we're going to get started with the content today. Very, very excited. Hopefully you can see my screen and it's not the wrong screen. I just recently did a virtual conference this weekend. It turns out I was sharing the wrong screen the whole time. So that was super exciting and very professional of me.
Liz: We're going to talk today about selling on Amazon Europe, the different European marketplaces, from the USA. But this isn't just exclusively geared toward US-based sellers. If you are in a different marketplace and you wish to sell in a European marketplace, this is the right webinar for you. We'll be addressing all your questions and tackling all these topics. Like I said, I'm Liz Fickenscher. I'm the industry liaison at eComEngine. I think we lost Mark for a second, so Carina, let's start with you. Tell the folks a little bit about yourselves in case they don't know you. I'm sure they do because you're famous, but just go ahead and give us the overview anyway.
Carina: Thank you, Liz, and thank you for inviting us on the webinar today. Super excited to be talking about selling on Amazon in Europe. For those that don't know me, I'm Carina McLeod, and I'm the CEO of eCommerce Nurse. I've been in the Amazon space for over 15 years now, so makes me feel old. I spent seven years working for Amazon in the UK, within the vendor management team. The last eight years, have been consulting for brands in North America and Europe, helping them grow their Amazon business, whether it be an Amazon vendor or an Amazon seller. Then in 2017, set up eCommerce Nurse, an Amazon-focused agency where we as a team of ex Amazonians support brands and also help them grow on Amazon in, as I mentioned, North America and all European marketplaces.
Liz: That's great. Do you want to mention a little bit about Vendor Society too, because I think that they'll be of interest to some of our attendees?
Carina: Sure. I'm also the founder of Vendor Society. Vendor Society is a community based website where we bring... Or it's a community for Amazon vendors. What you often find is there's a lot of content out there for Amazon sellers, but there isn't so much support out there for Amazon vendors. And so, we launched Vendor Society a few years back as a community to help bring vendors together across the globe, and create platforms and environments for vendors to share experiences.
Carina: We have virtual round tables, which we were having, which we've been having on a monthly basis pre-COVID, where vendors talk about a really current topic and they share their experiences, best practices. It's been fantastic because sometimes, as you probably know as sellers, you can learn a lot by talking with one another, rather than just sitting back and listening to those specialists in the area.
Liz: Community is so important in this industry. It really, really is. I think we lost Mark for a second, so do you want to tell everybody about Mark and when he gets back, we can just get started?
Carina: Yes, definitely. I'll introduce Mark because I've been working with Mark for a number of years and know him very well. Mark is the CEO of Skye High Media. Skye High media is an Amazon-advertising-focused agency. eCommerce Nurse and Skye High Media, we work in partnership. We at eCommerce Nurse manage the retail services side of things, Mark and his team at Skye High Media manage all the advertising, again, working with sellers and vendors in North America and Europe. I think I can now see Mark joining. So, Mark, I was introducing you. I said how fantastic you are and...
Liz: And very tall. We didn't mention that he's very tall, but he's very tall too.
Mark: Can you hear me okay, first of all? Yeah?
Carina: Absolutely. Yep.
Mark: Brilliant. We had a technical glitch there. That was the WiFi disconnected me, but I've moved rooms, so back up and running. Thank you, Liz, Carina, filling in some space there. Liz and the team at eComEngine, thank you for having me. Yeah, I'm Mark Pettit, the CEO of Skye High Media. Prior to setting up Skye High Media, I worked at Amazon for a number of years. Started there 2015. Seems a long time ago now. Specifically worked in the advertising team in Europe, so primarily helping vendors run advertising solutions, and then that role changing and into sellers. But I'd seen great coverage across a lot of different categories, including one of my favorites, beers, wines, and spirits, automotive, home improvement, even the baby category. So a good array of brands. Yeah, we're now full steam ahead.
Liz: Super. You guys do great content together, so this was a no brainer for me because I'm a fan already. We've been working with Carina for a really long time, and it's been a pleasure to meet Mark. This is just great. It's the first in a series of international selling webinars and content that we're creating here at eComEngine. But I wanted to get this team front and center first.
Liz: A little bit about me. I already talked about me. Let's not talk about me. Let's talk about eComEngine for a second. eComEngine is the provider of smart software tools for Amazon sellers. We've been in the space since about 2007. So that makes us, in e-commerce years and in technology years, very mature. FeedbackFive was our first tool, is a reputation management tool that also lets you ask for seller feedback and product reviews, both through Buyer-Seller Messaging and through Amazon's new Request a Review feature.
Liz: FeedbackFive is available in almost every single Amazon marketplace, 15 total I think. We've just recently added Turkey, United Arab Emirates, Singapore, Brazil, and the Netherlands. So we are ready. If you started selling in European marketplaces, we're ready to support you there for sure. RestockPro is an inventory management tool for people who sell predominantly on FBA. It's available in the US, Canada, and the UK. It's really smart and customizable and awesome.
Liz: MarketScout is a quick product look-up tool to help you decide what to sell on Amazon and SmartPrice is an algorithmic repricer that actually is currently available for free testing. So if you're interested in that or any of our other tools, please let me know and I will hook you up with free trial. Enough about all of that. Let's go through the agenda. We're going to talk about selling on Amazon Europe today.
Liz: We're going to talk about what countries to consider first, so a little bit of strategy, inventory and fulfillment, what the different options are, how it differs from the US, product compliance, localization and translation, and the different advertising strategies you need to consider in the different advertising formats you need to consider when you're selling on different European marketplaces. I'm going to stop sharing my screen so that you can see our presenters' wonderful faces, and we're going to get started.
Liz: I think that probably sellers that are thinking about global expansion, one of the first questions is, do I go ahead and launch on all the European marketplaces all at the same time, or should I choose one? What's the best one to choose first? How do I go about making that decision? Do you want to tackle that and then we can just see where it goes from there?
Carina: Yeah, sure. Sure, I'll jump in. Yeah, I mean, this is a question we get asked a lot, and I think, firstly, when we talk about Amazon Europe, we're talking about six marketplaces. A lot of the time when we talk to sellers, sometimes the assumption is Amazon EU, it covers everything, which it does. It covers all six marketplaces, the UK, Germany, Italy, France, Spain, and the Netherlands, but actually every marketplace needs to be treated differently because there's different culture, different language, and they are effectively separate accounts, even though they all sit within the same seller central account.
Carina: When we first talk to brands, we're just clear, you need to be looking at this. There are six separate countries. And so, then it's about, okay, well, what country... We just want to go into all of Europe. Then it's about taking a step back and actually say... That means that you need to invest in all those countries and be ready to invest in all those countries, which can be quite costly and requires ability to manage all those different languages.
Carina: So it's first about thinking, okay, out of those markets, which one is the... We would say probably the sizable market where there's the most opportunity to start with. Typically, that would be the UK and then Germany as well. Now, a lot of US businesses that we've dealt with have automatically just focused solely on going into the UK, because it makes sense. It's the same language. It's one of the largest markets within the EU. But, of course, Brexit has thrown a complete spanner in the works as well and changed that because... Which we'll go on to shortly, but it's made the EU become less available and will be less available come next year.
Carina: And so, now, it's about thinking about, okay, the UK still has that sizable opportunity, but also so does Germany. Germany is a good size. There's opportunity there, almost the same size as the UK. And so, if you're thinking as a business, what marketplaces you should be going into, definitely worth thinking about the UK and Germany. Now, one thing to just note is that it also depends on your product category, because you also need to do your research, because if you have a product that is more for, let's say, summary, more the sunshine and focused on that, it might be that there might be more of a market within Spain and Italy as well. Although the market size itself is smaller, you might find there might be more demand for your specific products. So there's a few things to think about before you jump straight into the EU.
Liz: The question of cultural differences comes to mind. And I think that that's something that a lot of people overlook when they think about expanding globally, is they think, okay, my product's universal and everybody's going to love my product, and I can communicate my product the very same way as I do in the US, or if I'm a Canadian-based seller or whatever. But I imagine that in addition to having to prepare listings in the native language of your buyers, you also have differences in the way that you communicate the product information depending on the marketplace, and depending on the culture present in that marketplace. How do you go about figuring out the key to what's the exact way to communicate to your German customers and what's the exact way to... Let's talk a little bit about that.
Carina: Yeah, definitely. I always have this conversation and it's like, "Well, let's just go into EU and we'll translate, just put everything up there in English and translate. And we're like, "Whoa, whoa, whoa, you can do that. Nothing's stopping you, but you need to think about the customer experience," because we've seen businesses do that and, bang, a negative review appears, because actually the assumption that every country understand English in Europe is not a good assumption. And we've seen really, really horrible reviews, as in, "None of the packaging, none of the instructions were... It was all in English. I don't speak English," etc, etc. So you have to be very careful in not making too many assumptions.
Carina: Now, also, you want to think about with your translations in your content. Many businesses ask us, okay, that's all right, we'll do Google Translate, or we'll do an automatic translation, which you say is no, no, right? Maybe if you've got a huge catalog, that might be where you start. But actually, what you really need is you need a native translator, a certified translator, because just because you speak that language, doesn't make you a translator. But someone that actually understands Amazon, because when it comes to translating for Amazon, it's not a pure translation. It's about understanding the keywords, because keywords go missing in translation.
Carina: You might have five different ways to explain a product in Germany, but only one way in the UK. So if you don't find all those keywords, you're effectively only getting one, you're losing out on this, this real opportunity in Germany because you're not identifying those keywords. It's also about localizing the content that... You might find you have a bit more fluffy content in the UK, but actually in Germany, you want the content to be a bit more direct and telling exactly what the product does. And so, it's a different tone of voice, and that's where we use our translators, that not only run the keyword research, they translate, and then they localize content and make sure that it is compelling to that native speaker.
Mark: Let's not even forget though that we're not even talking about translating content into France, Germany, Italy, and Spain. American English is very different in some respects to a British English, whatever the technical term is. You guys say pants, we say trousers, right? So it's really important that even if you're coming into another English-speaking market, that you're catering for that because I know the British people, we get annoyed if American brands don't cater for the UK customer. And I'm sure it's the exact same vice versa.
Mark: Now, it works in some cases. If you're really buying into this American brand, then that's probably okay. But it's understanding that you are still speaking to a different audience, and taking that sensitive approach will essentially make a difference between your brands and other competing brands within that space.
Carina: Yeah. Yeah, definitely. I guess that comes also to keywords, doesn't it, because you could miss some keywords if you're not explaining what that means. There could be many different ways to explain something in the UK versus the US as well. We always have fun with that, actually, because in our team, our copywriter is from the US, but she also lived in the UK. So she's worked for Amazon UK and US. So yeah, we can have a bit of banter there.
Liz: She knows how to speak properly, is what you're saying.
Carina: She knows how to speak like the Queen as well, yes.
Liz: We also had a comment from one of our attendees that said, "Another pro tip, probably not great to keep "Made in the USA" highlighted on your listing. So there are certain things, I guess, you need to think about that might be selling points in the US, that are not necessarily selling points in other marketplaces.
Carina: Yep. Completely. Really good point.
Liz: Let's talk a little about logistics, because it's one of my favorite topics. I know that it works a little different for the EU than it does here in the US, and there are different fulfillment methods. So let's talk through that a little bit.
Carina: Yeah. If we talk about FBA, there's three different ways, options, for FBA within Europe. You've got European Fulfillment Network, EFN. You've got Multi-Country Inventory, also known as MCI, and then Pan-European. EFN basically means that you hold your inventory in one country within Europe, and you can sell all your products on Spain, Italy, France, Germany, and so forth. What happens is if a customer then orders a product from Spain, and let's say your inventory is in the UK, the product will be prime in Spain. Did I say Spain? I think I said, Spain. The product will be a prime in Spain, but will have a longer lead time, let's say, two to three days.
Carina: And so, when the customer in Spain places an order, Amazon take that inventory from the UK and ship it to the customer in Spain. The inventory is next-day delivery for anyone in the UK, and let's say, that's where the demand is, so that makes sense. But then you can still sell in those other countries and inventory is just shipped as and when the customer places that order. All this seller does is pay a cross-border fee when that crosses the borders.
Carina: Now, then you have Multi-Country Inventory. Let's say that you've got demand in Germany and the UK. You don't want to pay the cross-border fee because it starts adding up for sending product to Germany. And also you want next-day delivery for your German customers as well. You might then say, "Well, I want to hold inventory in Germany, I want to hold inventory in the UK." Then if you sell your products in Spain, Italy, France, Amazon then takes inventory from either of those countries and ships it to the other countries. So you pay a cross-boarder fee for some countries, but then your inventory is in the countries where you want it to be closest to the customer and where the demand is.
Carina: You then have the complete other side to EFN, which is Pan-European, which effectively you send your inventory to Amazon, and Amazon redistributes everything across all marketplaces. And then-
Liz: Sorry. For UK-based sellers, is Brexit changing that? We definitely saw someone comment and say that they just announced a few days ago that EFN and Pan-Euro fulfillment are going to be available to UK-based sellers. Do you think Amazon is going to come up with a different solution or-
Liz: Hard to get around that whole Brexit thing, right?
Carina: Yeah. They're still in negotiations, the UK with the EU, around what those fees will be. But effectively, we will formally no longer be part of that customers' trade agreement formally, come the first of Jan 2021. Amazon sent out an email, I think it was last week, saying that EFN will no longer be an option from UK to EU. It's almost separating the UK now from the EU. They're also saying that Pan-European will no longer be an option between the UK and EU. So Pan-EU will still apply to continental Europe, effectively, but the UK is just being put aside.
Carina: Now, we don't know what those fees will be and how it will be, but what Amazon is recommending is this effectively Multi-Country Inventory which I spoke about, where if you want to sell and you've got demand in UK, great, hold inventory in the UK. But actually it makes sense to also have inventory stored in a country within the EU as well, to be able to keep that EU cross-border trading going on as well.
Liz: And so, that's also US-based sellers aren't going to be able to store their inventory in the UK and use EFN or Pan-Euro, right?
Carina: Yeah. It's so much-
Carina: Yeah. It's early days, but that's the announcement. Amazon's trying to get people ready, because what that means is there's certain tax obligations now. I'm not going to go into VAT because, disclaimer, we're not VAT specialist, and that's nothing that I want to say. Always, if you're going into Europe, to make sure that you speak to a VAT specialist to understand your obligation there with filing taxes. But what it means is once you have inventory in a country, there is a tax obligation. And so, you need to be set up for VAT, for sales tax, within those countries.
Carina: It can take a good few months to do that. So what Amazon is doing is starting to warn sellers not to do it last minute, because if it's all of a sudden, "Oh no, I've got to pay all these fees. I can still ship the product from the UK to Germany, but I've got this customs border to deal with, and it's going to cause a lot of problems. It's less easy to further inventory to flow, but I have got to set up for VAT." You're going to find there's going to be a pause and delay in your business. So that's what you don't want to do. If you are already selling in Europe, make sure that you're prepared in advance for Brexit, for sure.
Liz: Is there an option to just work within one particular country for FBA? Someone is saying, "Is there a local FBA model where we only list our products on .co.uk and we only sell in the UK, or you only list your products in Germany, and therefore you only ship into FBA in Germany." Is that an option, and is it an affordable solution?
Carina: Yeah, that's the option. Really that's EFN and you just say, "Okay..." It's just basically holding FBA inventory in your country. It isn't European. It's a similar, same sort of model as EFN, as in you've got your inventory in that one country, but you just don't list your products in any other of those marketplaces. You just solely have your products listed in the UK and you solely sell in the UK, or vice versa, depending on what country that you want to sell in.
Liz: Somebody had a question. It's actually a friend of mine, and he is an existing Pan-EU seller. He is based in the UK though, so things are going to change a lot. But he says, "Please bear in mind that customers across the EU27 cross-purchase from the four main sites. For example, he sells very little on .it, but quite a lot to Italy because they use .de and .fr. So they are shopping through Amazon Germany or Amazon France from Italy. That's obviously ideal, right, is to be able to have a touch point with all of those different marketplaces even if the people in a particular country are shopping on a different countries' marketplace.
Carina: Yeah. That's the other fulfillment method, the Pan-European, where effectively you have inventory in all those countries. And so, you send it to Amazon and Amazon, basically, on their intelligence, they know where the demand is. They redistribute the inventory across all marketplaces. Pan-European is a great option if you basically want to really have your product everywhere within Europe close to the customer. But it also requires a huge investment because then there becomes a tax obligation in all those countries, as well as if your inventory is then...
Carina: They also hold inventory in Poland and Czech Republic as well, for Germany. And so, it starts becoming a lot more complex. So it's definitely an option, and that's why it's really important that business always thinks about, before you enter Europe, think about what your strategy is, and plan, because we've seen it so many times where businesses just jump in to all countries in the EU, and the demand just isn't there, and they just don't get that return. So it's about thinking about what your overall goal is, or which Mark and I, we talk about a lot, don't we, in terms of planning that out a roadmap of how you can approach the countries.
Liz: Right. If you're doing EFN, do you recommend that people ship directly into FBA, or do you recommend using a 3PL, just as a touch point? How do you usually advise people to do that?
Carina: I think you can do both. I think you can ship product directly FBA from the US into Amazon fulfillment centers, if you ensure that you've got all the right labeling and everything in place, and you've got the right third-party logistics partner, they can ship it directly. That works. It depends if you want all that inventory to be locked into Amazon. Some businesses just like to send in a bulk shipment more than they need to send into Amazon, but they've got the inventory there because it costs a lot to send it to over to the UK. But they don't want all that inventory in Amazon. Maybe it's too much, and they just use storage space within the UK. And there's companies out there that feed that inventory.
Carina: Then that means that you might be able to feed inventory to other marketplaces as well. So you're not solely restricted to Amazon. A lot depends on, is Amazon your own channel and how much inventory you want to ship to the UK really, or any other country we have in Europe.
Liz: We actually had a question around that. For a new seller in Europe, what's the best way to test demand to determine inventory needs? I guess, when you're doing your marketplace research and all that kind of stuff, how do you get a good idea of what the inventory needs are going to be depending on the marketplace?
Carina: Yeah, there's all the third-party tools out there in terms of understanding demand, finding who's ranking high in a particular category or the product that you're doing, what type of sales they're generating, to give you an idea of the type of sales you could generate, and basing your forecast around that. So about doing some research, knowing how your sales are performing in the US. It's going to be nothing compared to the US. It's a lot smaller. But with that understanding, and then being able to understand the estimated sales within the market that you go for in Europe, it should give you somewhere to start for sure.
Liz: Great. I think that it makes sense to talk a little bit about product compliance. We had somebody that said that they have a skincare product that's classified as a cosmetic, and they went to a lot of trouble to sell on Amazon Canada, only to find out that Amazon has rules around cosmetics on amazon.ca that make it prohibitive for this seller to sell in Canada. So how would one go about finding out what Amazon's rules are on the different marketplaces in Europe, around their particular category?
Carina: Sure. The first thing is don't expect Amazon to answer that question because they're very ambiguous with their response or vague, and just send you to a list of basic advice. But really, it depends on your product category, so that if you're in grocery or beauty, or more where packaging and labeling and everything, ingredients are quite vital. Then you're going to need that in all the different languages that you are going to be going into. And even baby and consumer electronics, and products with batteries. There's certain EU legislation. So it's really important that before you go into Europe, that you just check that your product doesn't have any additional legislation or require any additional packaging.
Carina: Now, there are some categories that don't necessarily need to, but it's always thinking about, okay, do you need to, maybe not, but should you, from a customer side of things? As in, do you want your packaging to appeal to all the customers in all the different marketplaces or not? Also, it's that thing that I talked about with the negative reviews and making sure that your instructions are, if you've got a complex product and somebody buys it and they can't read the instructions, and lo and behold, you might have a return or a negative review.
Carina: So it's thinking about that, but always check that your products are compliant and not just saying, "Oh, well, I saw another seller selling that item, so I can sell it," because you don't know what's going on or if that seller's just got through then slipped through the net, and maybe your products aren't going to slip through the net. And you've just sent this huge bulk shipment over to the UK to find that it's either stuck at customs, or that Amazon starts rejecting it, or your listing gets pulled. Yeah.
Mark: I mean, you can just add to that, in Seller Central, you can find like FBA-prohibited lists of the type of products you can't sell. And there are differences even like taking the UK and the US, it's a different marketplace. You can sell alcohol in the UK, whereas in the US on Amazon, it's a different story, right? As Carina says, do that as a bare minimum. Look at Amazon. And then if you do see other brands selling products and you're like, "But I thought that was prohibited," it probably is. It's just there's thousands and thousands, tens of thousands of brands selling on Amazon, and Amazon has a relatively small team that's going to be able to go through that.
Liz: That's great. That's a great addition. Let's go through a couple of questions because I want to get into advertising and advertising strategy, because I feel like if you're launching on a new marketplace, your advertising strategy needs to be spot on, like planned in advance, just like you plan your inventory in advance, just like you plan your fulfillment methods in advance and all that kind of stuff. Somebody said, "For EFN Amazon charges, GBP18 for non UK and 15 for UK orders. So if we're listed in the UK, isn't that a disadvantage versus local FBA because local FBA charges are at seven pounds for UK delivery," or yeah. I don't know about foreign currency. I guess that's the question, is the local FBA, in the UK in particular, more advantageous than... Or is that the only option right now, actually?
Carina: That's the only option. I mean, we call it EFN because you can sell in your local country and still be able to list the products within other countries, but it is effectively the same as a standard FBA. I'm not sure of the question in more detail and would love to know... Yeah, understand that a bit more because possibly is the cost differentiation down to cross-border fees there or...
Liz: It seems like it. It seems like that's a cross-border question.
Carina: One of my members in my team were doing the profitability analysis for an EU seller, that was selling really well in Germany and the UK. Their inventory was being held in the UK and the margins were just not where they needed to be. And after all the analysis, it was like, "Basically, your margins are being eaten up by this cross-border fee. So why are you not... Given that there's a huge demand for your product in Germany, and given Brexit and everything, we need to start shipping inventory and having inventory in Germany."
Carina: So it's always down to, once you start selling in the UK and if you're selling in other countries, and see the demand, you might want to start looking at, "Oh, what are my cross-border fees? What if I took that cross-border fee out and had that inventory closer and I didn't have to pay that cross-border fee anymore, is the demand there enough that will really help my margins as well?" So you need to look at it on a case by case basis.
Liz: Right. Someone asked, "If we had our inventory in Germany and VAT registration in Germany, how does it work selling to the rest of the continent? Would they need VAT registration in any country where someone buys their product or only where Amazon stores their product?" I know we don't want to get too into that, but I feel like that's a pretty straightforward question.
Carina: Yeah. There's a couple of things. There's down to where your product is stored, so where you have a tax obligation, but there are also thresholds as well. So a lot depends on how much you're selling and every country has a different amount. So once you go beyond that threshold, effectively, there's a tax obligation. So definitely worth making sure that, if you're going into the EU, you have a tax advisor. There's many of businesses out there, and I think even with yourselves, with eComEngine, you know of companies out there that can support you when it comes to registering for VAT, but also just checking your obligations as well.
Liz: Someone asked, "Does Amazon collect tax to remit to each country?" I'm assuming that's a big no, but that's really though... This is on the seller to take care of that and make sure their taxes are in order and that they're-
Liz: ... compliant with it. Okay. This person says, "We're based in the US and have EU listings that were imported directly from US listings over a year ago, including listings that we may never intend to sell in the EU or items that have been rebranded. What would be the best strategy to clean up or clean out the listings on all the EU marketplaces? Delete the listings on all, manually reload into the UK correctly, and then push to other marketplaces from the UK listings, or do you recommend that you create brand new listings for each marketplace?
Carina: Are the listings already on there? Sorry, I was a bit-
Liz: Yeah, they're already on there, but they, I think, are in English and they were imported straight from their .com account.
Carina: Okay. Then it's just more about... Because it depends on if you then have a different barcode. Really, you want to have a global barcode to start avoiding duplication, because if you have an EAN, a different EAN, then you have a UPC, you'll find that you end up with dual listings often on Amazon. It gets confusing. Really, you just want to update your products, and you can easily do that. Make sure that if you've got trademark, you're enrolled in the brand registry, so your content then takes precedence. Then it's about updating your UK listings and then updating each country's listings.
Liz: Great. We talked a little bit earlier. Someone asked, "Do you recommend launching Pan-EU right out the gate?" And we did talk about how you need to strategically think about your marketplaces, and your product, and how your product will be received in different marketplaces. And don't do everything at once. Just roll it out slowly over the course of a couple months. But the same person asks, "I realize that you didn't mention shipping from the US to EU direct to consumer on an order-to-order basis. Should we avoid doing this?" I'm assuming that's super, super expensive, but do you have people that are doing that or...
Carina: Yeah. It depends what you're selling. I imagine it would need to be quite a small item.
Liz: And very light.
Carina: Yeah, but also you've got.
Liz: Ideally flat.
Carina: Ideally very flat. But you've got to think about product getting stuck at customs, the customer experience. Let's say a customer orders something, it's stuck at customs, and they can't get it out, and they end up having to pay a fee. We've seen that a lot. So it's a bit of a lottery there, that we see some businesses not have any problems, but as soon as you get a product stuck at customs, bang, there's that negative review. If you're trying to scale and grow a sizable business, then that is not sustainable.
Liz: Right. If someone has UPC exemptions in the US, will they work in the UK or do they have to start over?
Carina: Exemptions for UPC?
Carina: I'm not sure. I'm not 100% sure on that one, in all honesty, if you would have to apply that. You would do that all. It depends if you need to enroll yourself in the brand registry.
Liz: Does brand registry transfer from marketplace to marketplace, or do you have to re enroll in brand registry on each marketplace?
Carina: You have to enroll yourself for those, for European countries, yeah.
Liz: All right. I know the answer to the next one. Does Amazon combine reviews of different marketplaces? No, they do not. So if you've got reviews on one marketplace, like this person is based in India, it's not possible to combine the reviews from .in to .co.uk. Each marketplace has its own reviews and reviews are non-transferrable.
Carina: Although we have seen Europe itself starting to have, all of a sudden, like I was looking for an item the other day, and I was like, "Yeah, there's loads of reviews." And I scan through them and I was like, "No, school German. Doesn't work. Can't read these reviews." So there were some German reviews as well, further down the page and some Spanish reviews as well. Amazon are always playing around with reviews, but I've noticed that on a few products where some of the European marketplaces are appearing.
Liz: It could also be a question of someone in Germany who's using the UK marketplace to shopping on the UK marketplace.
Carina: Yeah. But I think it might be from that marketplace. I need to do my detective work.
Liz: Keep me posted on that.
Carina: Yeah, I will do. Share the example.
Liz: Of particular-
Carina: I have to check that I was buying something that I can share the example of, and it wasn't a secret.
Liz: Do US trademarks allow sellers to enroll in brand registry on European marketplaces, or do they have to get a separate trademark in the other country? US trademarks, are they fine for EU brand registry?
Carina: We used to find that they were. The last time that we had a client do that, they had to register their European trademark to get access. So we've seen it before, but we have seen it changed. They do say that you need one for that specific country. So we have seen that. Whether you can get round that, who knows? But that seems to have been the latest, when we lost a fight for it. I think it was just a week ago.
Liz: You guys were talking about restricted item, prohibited items on each marketplace. But around the rules on product label packaging, are there particular things that are required in different marketplaces that would be a little different from what people see in the US?
Carina: Completely. Completely.
Liz: Oh, heck, yeah.
Carina: Sometimes in each country as well. You actually find the EU is a lot stricter than the US. Even if you talk about things like sports supplements and so forth, the EU becomes very strict on what you should and shouldn't say, and there's certain labeling restrictions or label requirements in each marketplace. So it is really important. Everyone that we speak to, do your due diligence before and make sure that you're ticking all of those boxes.
Mark: We had a client recently, a good example of that, that sales fire detectors, smoke alarms, and carbon monoxide alarms, and the legislation to sell those same products in Germany versus the UK is quite different, so much so that they actually had to tweak the product specifications and also update the packaging. So that's just an example that, yeah, every marketplace could have different rules. Europe isn't just this one big place. It is, but they all have their own rules, so you've got to take that into consideration.
Liz: Awesome. You've really got to do your homework.
Carina: You start seeing it's a lot more complex, really, than the original... I think Amazon flags it as this, "Sell in Europe. There's all this opportunity," which is fantastic. There's a lot more requirements and boxes that need to be ticked before you do that as well.
Liz: Right. Let's talk a little bit about the difference in advertising formats on different marketplaces.
Mark: Yeah. It's not too different, to be honest with you. The US market is the primary market for Amazon. So normally when there's new formats, or targeting capabilities, or measurement opportunities, the US market's the first place to have those changes implemented. Generally speaking, when you're coming into Europe, you have the same four to five different formats available to you. So you'll expect to see sponsored products, you see sponsored brands. The US has sponsored brands…that is in testing in Europe, but it's not widely available to every single seller. And of course you also have brand stores available in these marketplaces as well.
Mark: So generally speaking, the formats are more or less similar. You do find certain nuances in some of the formats, an example being sponsored display ads in the US allow you to target customers off of Amazon as well, whereas in Europe currently and mainly, that format is specifically still targeting customers within the Amazon environment. But that'll be a change that comes on further afield.
Mark: Carina mentioned at the beginning of the webinar, there's six European markets available to sell your product in, but there's actually only five that you can actively use from an advertising perspective. So every country bar Holland and the Netherlands, although I believe that's coming in Q3, so in the next couple of months. I'm assuming some sellers and or vendors may have already been invited to participate in programs for those countries, which is good. So in terms of the actual structure, it's more or less the same, and the dashboard and things are more or less the same as well.
Mark: It will feature in that language, but you can more or less work out what the data's telling you. And if you use something like Google Chrome, you can do a basic translation. But coming back to that translation part, if you are going into multiple European markets, it's really important that you have a strategy in place that uses both human and technology skill sets to do things like keyword research. Don't just take your keywords in the US market, pop them into a translation automation service, and think that's going to work.
Mark: You might get away with some of it, but I think probably 75% of it will be either incorrect or actually just need to be tidied up. So I think that's a really important thing to do and treat each market separately.
Carina: Sorry, I'm jumping in.
Liz: Oh, go ahead.
Carina: Then there's the brands, right? There's different competition in each country. Like you might have some brands that are in every marketplace, but we find that some brands are stronger within one marketplace than the other, and maybe those brands don't even exist in the US. So it's really important that you do your competitor analysis as well. Not only for the ads, but just in general, because your competition's going to completely change.
Mark: A lot of the work you'll do, just to get your listings up and running in Europe, will actually transfer into the advertising piece, because the advertising piece is just a branch of the tree, right? It's just one part of the strategy. So when you're doing keyword research for your listing, most of those keywords will be very relevant for your advertising as well, right? Then just coming back to that question, which market do I go into? Well, you can decide based on where Amazon features or you can decide based on where you think your product will best sell.
Mark: For example, bicycle equipment sells at a higher rate in the rest of Europe than what it does in the UK. Now, the UK has a real bike enthusiast, but the rest of Europe take it far more seriously. But then maybe from an advertising perspective, you might find the average cost per click in one market versus the other is substantially different because it's saturated. I wouldn't let that put you off, but those are things there. If you're launching in, say, three marketplaces, UK, Germany, and France, don't expect the results, the conversion, or the average cost per click to be the same across the three, because it'll entirely depend on the saturation of that market and a range of other influences as well that would play a part in that.
Liz: That's great information. Obviously, this is a very complicated proposition, and it's good that there are people like you that can help people develop their strategy so that they can be successful as they're planning to launch onto a different marketplace in the UK, or be it, like the Pan-EU. We do have a couple of questions, but I wanted to see if there was anything you guys wanted to cover, or if you want to go into questions. How are we feeling? I think we're doing fine on time.
Mark: Yeah, I think, finally, just from my side, it's really important that you have a strategy, a launch strategy, particularly if your brand is unknown in Europe. You can essentially break that into three or four stages, launching your brand where you really should be obsessed with generating awareness. Then once you've got a certain level of sales velocity underway, focusing on growing the brand and growing the sales, finessing those keywords and audiences that are actually converting best.
Mark: Once you're past the growth stage, you're then focusing on things like profitability, because let's be honest, at the beginning of the process, if you're too focused on profitability for your product range, you're going to stunt growth, you're going to halt the growth process. When we're working with our brands in Europe, we have that plan in place where it might be mapped out across 12 months. It might be mapped to across two years. It just depends on the brand. But you really want to have a launch, a growth, profitability, and potentially a liquidate stage as well where your product over time is headed to maximum peak. You now want to maybe refresh it, we're going to bring an updated version in. It's important that you have that process in place.
Liz: That's great advice. I'm going to share my screen because we do have some special offers, and I encourage our attendees to ask questions. Put those in the Q & A and we'll get to those in just a second. I am willing to do a free seller health analysis, now as Q4 approaches. You only have until August 16th to improve your inventory performance index score. It's got to be 500 or you're going to be faced with storage limits in Q4. Not as bad as last time, but still you don't want any limits. Or if you want to talk about your order defect rate and your negative feedback rate, or if you need to do a product review analysis, whatever, I'm here. Just email me, firstname.lastname@example.org.
Liz: Carina is offering a free listing analysis for EU market consideration. So you send her one of your .com listings and she'll tell you what you need to do in order to get it ready for a particular EU marketplace. Just mention this webinar in the subject line of your email or in the contact form on her website. Mark is willing to do a free ASIN analysis for EU market recommendation. You send him your ASIN and he will tell you what you would need to do to advertise it on the particular marketplace that you're interested in.
Liz: Those are all great opportunities for you to consider. Obviously, your seller health needs to be good in order for you to get approved for other marketplaces. But as you're getting that strategy in place, actually getting some time with Carina and Mark is a really valuable thing. These people are experts. They understand how Amazon works. They understand how Amazon works in different marketplaces, and they can help set you up for success.
Liz: Let me do some questions. My friend in the UK is trying to figure out how to jump the post Brexit hurdles. But the real killer is this enormous Poland VAT deposit that I think he said is 10,000 pounds, or 10,000 euros. It's 10,000 something. It was a great big amount of money. Have you heard anything about that being avoidable or that not going away or anything like that, or is that just that's just the way it is in terms of...
Carina: Which market was that? Did you say Poland?
Carina: I think it depends. I'm guessing you've got a Pan-European, currently working Pan-European. I guess it's about really, is a Pan-European strategy right for your business? Are you getting that return? Does it make sense? Do you have that demand there that warrants having inventory so close to the products, that you have to hold inventory within those different marketplaces? Within Germany, if you want to just start in Germany, you can stop your products.
Carina: From my understanding is you can stop them from not warehousing your products in Poland and Czech Republic and just store them in Germany as well. Although, again, don't hold me to that. Things are changing all the time and my team might then ping me a mail going, "That's changed." But as far as I'm concerned, that was how you can play it. So that might be something you want to think about. That's the biggest problem with Pan-European. It's like you're sold the dream by Amazon. Your product is close to all the customers, and you can reach all the customers, but there's a huge craziness with taxes within every country. And they all have their different requirements as well.
Liz: Someone did ask what's the best strategy to manage VAT tax for all the European marketplaces. And I would guess that that would be, get a tax professional or an accountant.
Carina: Yeah. A tax specialist will know that that's what really... The advice is don't go at it alone. Don't try and figure it out yourself because if you're trying to do it on the side, get it done cheaper, it'll probably end up costing you more. It's best to get a tax advisor that really understands the EU. So they know, not necessarily the loop holes, but make sure that you're applying the most cost effective strategy as well.
Liz: We're actually doing a webinar next month and AVASK is going to be on that. I know that they're going to have some advice around that, so you guys should join. Not one, if you like this one, you'll like that one too. Someone has just asked would I please answer all the questions in writing, because we would like to refer later. I'm afraid that I can't do that while I'm moderating a webinar, but we will be providing a full transcription, including the questions, on what is currently the registration page on the eComEngine webinars section.
Liz: So all of this will be available for your reference. It will be expertly transcribed and available in like 48 hours or so. So hopefully that'll work for you. If you're raising your hand, I don't actually know what to do with that. So if you'll type your question in the Q and A section, we still have about four minutes that we can use. That would be super, and I'd really appreciate it. Someone asked, "Is it okay to have customer service rep based only in the US? What do current US-based sellers do for EU customer service?
Liz: I know that we said if your product instructions are in a different... Or in English, you can't assume that everybody speaks English. Do you think that you need like a native German speaker to do German customer service and a native Italian speaker to do Italian customer service? And if that is the case, how do they go about getting that?"
Carina: Yeah, it, again, falls down to this whole customer experience. As in, Amazon is asking that. I know people out there that just chuck in the answers in Google Translate, but is that the right customer experience? And is that the right impression that you want to give you brand? It's obvious that it's a Google response versus a human response. There are companies out there, we know companies out there, that do offer EU customer service teams, that can manage the phones, manage emails, that are basically natives in the EU countries.
Carina: So there are companies out there that manage VAT for you. There are companies out there that manage customer service for the EU. There are companies that manage translation. There's companies out there basically for every solution, and we can steer you in the right direction if needed.
Liz: What do you think is the optimum ACoS, or what percentage of revenue goes into ad spends for brands completely new on Amazon UK?
Mark: Well, your percentage of sales from advertising at the beginning of a process are typically higher. So your organic versus advertising sales, you would expect to probably see over 50%. I'm, again, generalizing here. As brand awareness goes up over time, and you have reoccurring customers, you become less reliant on advertising. Advertising, if it's a well-oiled machine, should actually push up your organic sales over time. It doesn't always work like that, but that's the goal.
Mark: In terms of your ACos and suggesting a number, it's tailored to your business and your category. So it depends on your margins. I would expect that at launch stage, it's quite common to lose money or break even, and attracting customers. But as you go through the life cycle and you get to grow some profitability, your A cost number should come down. But I would always relate it back to margin, so what is your pre-ad margin and gross margin, and working it back from there.
Liz: Great. Would you say the German market prefers a lower price point compared to the UK?
Carina: Not necessarily. I think when we're talking about price points, the key thing here is, do your competitive research. Understand what is the going rate for your products within that marketplace. If there's more competition in that marketplace for your products, you might find the price point's a bit more aggressive than others. But I wouldn't necessarily say that customers automatically expect something cheaper within one country or the other.
Liz: Does Amazon handle the freight from your warehouse to theirs in the UK or Germany? Do they do the importing through customs or...
Carina: You'd need a freight forwarder for that. Yeah.
Liz: You need a freight forwarder.
Liz: There's some good ones. We're going to have an FBA logistics expert on the webinar next month. Also, well, for shipping, can take care of that for there too. How about customer returns in the UK specifically? Are the UK shoppers prone to return things? This person sells in the luggage category, actually. So they're wondering if you have any insight into the luggage category and rate of returns.
Carina: Yeah. I mean, that's a fantastic question, and a point that is quite relevant that we haven't covered off. It really depends on your product. Sometimes businesses just take that as, okay. Amazon disposes of it because it's more of a headache to manage than it's worth. But then that's your inventory. That's of value as well. So there are companies out there, and some of these freight forwarders have warehouses, that can manage hold inventory and that can manage all returns, product returns as well. So it's about finding the right solutions and those solutions are out there.
Liz: Awesome. Then the very last one and then we're going to close. It sounds like the new model might be UK FN formerly, and a Pan-EU, minus the UK. Would it then make sense to start importing from factories to both UK and the EU for storage and forwarding to FBA for each program moving forward? It sounds like, based on everything we've talked about today, that's a big yes.
Carina: Yeah. That's what Amazon's recommending, and that's what we're saying. Yeah, especially-
Liz: A storage warehouse in the UK, a storage warehouse centrally in Europe somewhere, and operate your Pan-EU differently from your .co.uk account. Unless something changes, but that's the way it's looking right?
Carina: Who knows? We've been waiting for an answer for the last few years, so yeah.
Liz: Right? Heck of a time for it to actually finally come to fruition, right? Right before Q4 and during a global pandemic. It's so crazy.
Carina: Yeah. Who knows?
Liz: One last question, because I think it's super interesting. Is there any anti-China sentiment in the UK? Are people in the UK put off by "Made in China" labels, I guess, is the question.
Carina: What? Mark?
Mark: I think so.
Carina: That means you're the one for that.
Mark: I've had some brand owners who use Chinese manufacturing and are looking at bringing that into Europe, if not the country that they currently reside in. So I would say that from the conversations that I've had, there's an element of that.
Carina: Yeah. To add to that also, I think there's this point where actually businesses, with the possible... The fact of the economy going into complete chaos. People want to support the local economy as well. And so, actually, people are wanting to start investing more in, let's say, "Made in the UK" or "Made in Germany" or "Made in the US" products as well. So we might see an influx of that. It's not necessarily anti, but it's more about, how do we support our local economy?
Liz: Right. Carina, Mark, this has been great. It's been a ton of information. I know that I'm looking forward to the recording and looking forward to the transcript so that I can take it all in, because this has been a tremendous amount of great information. Thank you so much for joining us today. Thanks to all of our attendees who joined us. I'll see you guys soon because I want to do this again sooner. I love listening to both of you talking. You both know so much, and it's just great. So thanks everyone for joining.
Carina: Thank you.
Liz: We'll see you next time.
Carina: Thanks everyone. Bye.
Mark: Thank you. Bye.
Carina McLeod spent over 7 years working at Amazon within Retail and Vendor Management. She specialized in launching new categories into the UK market managing the launch of Sports & Fitness, Watches and Apparel. Carina is the founder of eCommerce Nurse and Vendor Society. She speaks "Amazon" proficiently, knows their requirements and systems and most importantly knows what it takes to become a successful vendor and seller on Amazon.
Mark Pettit is the Founder and CEO of Skye High Media. Mark worked at Amazon for a number of years and was employee number 11 within the Amazon Advertising Inside Sales team. Working across a range of verticals and international clients, he soon realized that brands were not getting the full support they needed, when it came to Amazon. In 2018, he created Skye High Media, a full-service Amazon agency, helping brands achieve growth and success on Amazon globally.
Originally published on July 9, 2020, updated July 31, 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.