Where and how you should store your goods in Europe depends on the fulfillment you choose.
Selling on Amazon generally leaves you with two choices – Fulfillment by Merchant or Fulfillment by Amazon. Each of these Fulfillment options comes with an array of storage options to choose from.
Read on to learn more about your storage options as an Amazon sellers in the old continent.
FBM in a nutshell
Fulfilled-by-Merchant means that you will be sending products to your customers by yourself – without the involvement of Amazon.
You can of course store your goods in a garage and package and send them to your customers yourself.
However, FBM usually means hiring an external fulfillment provider.
How does storage work with an external fulfillment provider?
External fulfillment providers specialize in the distribution and delivery of goods sold via E-Commerce platforms and have their own warehouses all across Europe or even the world.
The storage and fulfillment process is similar to that of FBA-programs.
There are a few steps you must take until the fulfillment provider starts shipping your products.
- You first have to choose a provider that fits your criteria. This depends on price structure, storage location, and services that you need.
- Then, you have to send your goods to one or more of their warehouses. As most providers have several storage locations in a variety of countries, this depends on your customer base and the required speed of delivery.
- Once the products have arrived you choose the package, delivery form and more.
- The products are then delivered to the customers directly from the storage facilities once a transaction has been registered in the provider’s system.
Is FBM a good option for me?
The advantage of choosing FBM as a fulfillment option is the individuality of providers.
There are lots of E-fulfillment companies in Europe which each have their own strength and specialization in different areas.
Some may have warehouses for storage in a lot of European countries and deliver quickly, but demand flat-rate prices and deliver in generic packages.
Others may have less storage options to offer, but shine when it comes to customer service and individualization of packages – meaning that they’re the perfect option for small sellers who want to build a brand.
There are a lot of fulfillment providers to choose from, ensuring that each Amazon seller will find a company who fulfills their needs.
The disadvantage of FBM, however, is that none of your products will be eligible for Prime, as they’re not stored in Amazon warehouses.
In order to market your goods as Prime products you need to participate in an FBA-program.
FBA in a nutshell
Fulfilled-by-Amazon is the umbrella term for Amazon’s logistics programs for sellers that each include several storage options and the delivery to the customers.
In Europe, you can choose between the following programs:
- EFN (European Fulfillment Network)
- MCI (Multi-Country Inventory)
- Pan-European FBA
What is the EFN?
When using the European Fulfillment Network, your goods will only be stored in and shipped from one country.
You can choose that country and your goods will still be sold and shipped to customers in all European Amazon marketplaces.
Your goods will be eligible for Prime and you only have to take care of the bureaucratic duties that come with the storage of goods in one single country.
However, the shipment of your products to your customers might take a bit longer, as your inventory is stored only in one location.
What is MCI?
The usage of Amazon’s Multi-Country Inventory solves the problem of longer shipping times.
In this program, you can choose and store your products in distribution centers in multiple countries.
This option also lets you save on cross-border EFN fees, the fees that arise from shipping your products to customers in countries other than the one chosen in the European Fulfillment Network program.
However, the redistribution of your inventory across multiple facilities and locations takes experience and might lead to higher storage fees if you miscalculated and there is no inventory turnover for a prolonged period of time.
What is the PAN-EU program?
The Pan-European FBA program is a good choice for inexperienced or busy sellers, who want everything to be taken care of by Amazon.
When choosing this option, you only need to send your goods to only a single Amazon warehouse in Europe.
Amazon will then calculate the expected demand of your products and automatically redistribute your inventory to the many warehouses across Europe.
As with the MCI, you will also avoid cross-border fees and ensure quick deliveries with this program.
Is FBA a good option for me?
Any of the FBA programs are good options for sellers who want to market their goods as Prime products and use the increased visibility that arises from Prime eligibility.
If you don’t care about Prime and would rather save costs and individualize your offerings, FBM and external fulfillment providers might be a good option.
While Amazon charges commissions and fees on individual deliveries as well as storage fees, which differ from program to program, the price structures of E-fulfillment providers might be better suited for your needs.
Storage in Europe and VAT compliance
Whether your goods are stored in Europe by Amazon or in a warehouse of an external fulfillment provider, you need to take care of some VAT-related duties.
Europe requires you to register for VAT in every country in which your goods are stored.
If you can select the country of storage, for example within the MCI and EFN programs by Amazon or when you engage a fulfillment provider, you need to register for VAT there.
But if you participate in the PAN-EU program you need to register in all the countries Amazon could potentially store your products in.
Specialized Amazon accountants like hellotax, can help you with your VAT registrations in foreign countries and languages and take care of all the VAT duties that might arise.
They also offer specialized services for sellers from outside the EU who want to expand to the European Amazon marketplaces.
Antonia is the Content Manager at HelloTax. She enjoys creating insightful eCommerce content, particularly about Amazon-related and VAT topics.