March 2, 2020
When it comes to running your business and selling goods on Amazon, one must decide how their products will reach the customers. In other words, this is known as a fulfillment plan. While you can choose to arrange your own transport and do direct deliveries, it’s not cost-effective. That’s why in Europe Amazon implements 3 different fulfillment options called “Fulfilment by Amazon” or FBA. These are specifically designed for easier and faster trading across the continent. This is quite helpful for sellers as they can generate more sales without having to invest in logistics. Of course, to sell with FBA, one must apply for the appropriate European VAT registration.
This option allows business owners to store their goods in a local fulfillment center. From here, the parcels are automatically shipped from the closest distribution hub directly to the customer and the items usually arrive on the next weekday. They are based in 7 countries:
FBA service makes the products eligible for Amazon Prime, which puts the store in the trusted category. This way the goods become visible and easily accessible to millions of customers across Europe. To sell with an FBA, the sellers also have to register for VAT in all of these member states. While it can be cumbersome to get and fill all the appropriate forms, it can be easily done through VAT registration services.
Choosing the Pan-European option is beneficial for those stores with an average 1,500 units/month turnover. Some of the advantages are:
Sellers can maximize their sales, profit and turnover.
With this option, the seller chooses the countries they want to ship and store their goods. The orders are then fulfilled from any of Amazon’s European marketplaces. In this case, the store owner is obliged to apply for VAT registration only in those selected states.
This way, you still have to pay two different fees. The first one is for local fulfillment and you still require arranging your own logistics to each Amazon warehouse. The second one is for cross-border for selling on other Amazon European marketplaces. So, this means that if a product is sold in one marketplace, you’ll only have to pay its fulfillment fee.
This is the simplest option of the 3. The goods are acquired from one specific Amazon warehouse and all the orders are shipped from there.
When it comes to VAT registration, the sellers need to apply only in the country where the items are shipped from. But if the European sales thresholds are exceeded in a certain state, then you need to register for VAT in that state.
These are the Amazon fulfillment options that sellers can choose from. They are all unique and all can be used by a wide range of stores. But still, picking the right one is crucial for the success of the business and the happiness of the clients, so the ultimate decision should be well thought out.