The opportunities for sellers afforded by the Amazon platform continue to appear lucrative. Amazon appears to have had another record fourth quarter in 2016. It’s also interesting to see that Amazon Echo and Echo dot we’re the best-selling products across Amazon this past year. The popularity and ease of use for the Echo products will continue to lead to increased purchases from consumers on the Amazon platform. While Amazon US will continue to provide incredible opportunities for sellers, our focus for 2017 will be capturing the future growth on the international Amazon platforms. Amazon has made it easier than ever to take your brand global with Amazon FBA.
Selling Internationally on Amazon
There are currently 13 Amazon platforms that you can sell on – from Australia to the United Kingdom. Each platform comes with their own challenges. While these platforms are nowhere as large as the United States, they will continue to grow as Amazon gains popularity in the respective countries. Getting in early and gaining visibility to your product could provide significant long-term growth for your brand. Our recommendation to our clients is to take your brand global with Amazon FBA as soon as possible.
Typical challenges that sellers face include translation & SEO, pricing and fulfillment. Product sales can also be affected by cultural differences between shoppers. Just because your product does well on Amazon US, does not mean it will perform as strongly in another country. Fulfillment can also be a problem for many sellers. International shipping can be expensive and include numerous taxes and/or transaction fees for those who choose to do merchant fulfillment. However, Amazon FBA is available in the United States, Canada, United Kingdom, Germany, France, Italy, Spain, India and Japan.
Fulfillment Abroad with Amazon FBA
Utilizing Amazon FBA in other countries is the same as it is for the United States. Your products are shipped to the fulfillment center, received and then fulfilled as orders for the products come in. The main differences are with shipping your products to an FBA country different than your own. When you send product to a different country, you are essentially acting as the exporter of record in the product source country and the importer of record in the destination country. We recommend using a freight forwarder to help the process move smoothly. They will know what steps need to be taken and could possibly even have a customs broker as well. We won’t cover it in too much detail, but here is a brief overview of the process:
- Create listings in Seller Central account for the market you intend to sell in
- Prepare a commercial invoice showing your company as the importer of record
- Find a customs broker (if your freight forwarder does not have one
- Ship the products from the factory or warehouse to the port in the source country
- Get the products cleared through customs
- Ship the product to the destination country
- Clear the products through customs in the destination country
- Have the carrier get the product to the fulfillment center
We believe it is better to let the pros handle those steps. Once your product is processed as the fulfillment center, your products will be live on the Amazon platform.
Amazon FBA European Fulfillment Options
There are a few unique product fulfillment options with Amazon FBA in Europe. Amazon currently offers Unified Accounts in North America and Europe. If you currently sell in the US, you may be familiar with the option to also sell your product in Canada. You can use FBA in both countries however all the sales can be managed from a single account. This is the North American Unified Account. You will need a separate European Unified Account, but you will be able to manage your sales in the UK, Germany, France, Spain and Italy from this account. We recommend that you take your brand global with Amazon FBA and the European Unified Account before moving into other markets.
New European Unified Accounts will need to have one of 3 fulfillment options selected: Pan-European FBA, European Fulfillment Network (EFN) or Multi-Country Inventory (MCI).
The most similar option to the United States fulfillment model is Pan-European FBA. Your inventory is sent to a fulfillment center based in one European marketplace and Amazon then distributes it to fulfillment centers in other European marketplaces based on demand (or expected demand). You can avoid per unit fees when shipping products across international borders as Amazon will be doing the distribution across borders. You need to have an active listing on each Amazon marketplace (i.e. .fr, .co.uk, etc.) for your product to be sold in each market under Pan-European FBA. This is by far the most hands off option you can choose in Europe.
The EFN network could be a good option if you expect your products to only be purchased on one European marketplace. Your inventory would be sent to a fulfillment center in one country and the products could be distributed to other fulfillment centers in that country, but not outside of that country. You can still put your products for sale on the other European marketplaces, however you will incur per-unit cross border fees when Amazon ships to locations outside the source country. This could also mean shipped orders could take a few days more to reach customers outside of the source country.
MCI is the final option that you can choose for Amazon FBA in Europe. For MCI, you ship your products to specific marketplaces that you want to sell in. The products are then distributed and fulfilled within that market, but not to other marketplaces. This allows you to keep your inventory in your bestselling locations. It keeps your shipping times low and gets the orders to your customers faster. You are also able to select individual listings that you want to be fulfilled by MCI and do not need to select your entire inventory.
Additional Things to Consider When You Take Your Brand Global with Amazon FBA
We’ve highlighted how the process works and what you need to know about using FBA internationally, however there are many additional items that need to be addressed. Logistically, you will want to speak with a few freight forwarders or customs brokers to get an idea of who you would like to use and what requirements they have. You should also consider talking to a tax account or tax lawyer who can help you determine what your tax liabilities will be when selling abroad. You may also want to speak with an account about how your payments will be received. You can use Amazon Currency Converter for Sellers or set up bank accounts in the individual markets, however each has their own advantages and disadvantages. We are not professional financial or tax advisors and are not in a place to give any tax advice.
There are incredible opportunities out there for sellers looking to go global. As Amazon continues to grow in popularity, sales across the foreign marketplaces will increase. The FBA options provided by Amazon are an amazing way to grow your brand in other markets. While the upside is great, there are also other tax, legal and accounting consequences that you need to consider as well. We hope you consider making 2017 the year you take your brand global with Amazon FBA!
Contact AMZ Advisers to learn how we can grow your sales internationally