Reaching millions of new customers across Europe through Amazon can take your business to the next level. But shipping within the US is quite different from shipping to Europe. In this article, you’ll get advice and learn what steps are involved. This will help you avoid unpleasant surprises, such as extra shipping costs and delayed delivery times, and having inventory held up by customs.
How it differs from the US
You might be asking: “Do I even have to ship to Europe if I use Fulfillment by Amazon in the US?”
“A lot of sellers ask if we can fulfill European orders using their US fulfillment center inventory,” says Robi Holmes of the Amazon Global Selling team. “Unfortunately, that’s not currently possible. To sell on Amazon Europe, you have to ship inventory to Europe yourself, whether you’re self-fulfilling or using Fulfillment by Amazon.”
Amazon helps small companies sell across Europe.
The cost of shipping, in time and resources
In general, shipping to Europe from the US, China, or other countries will take longer and be more expensive than shipping within the US. However, costs and time vary significantly based on method (for example, air vs. ocean), weight, and other factors.
“Our European shipping costs are fairly comparable to shipping to the US,” says a seller who expanded to Europe in 2015 and now has annual European sales of over $900,000. “We ship everything from our manufacturer in China, and a container to Europe vs. a container to the US is basically the same price. We pay a little extra to a freight forwarder in Europe to collect the shipment and send it to the fulfillment centers.”
“We can complete a door-to-door movement in as little as five days on our express courier service, but ocean freight from China can take 40 to 44 days,” says Neil Curran of Regional Express, one of the shipping solution providers on Amazon’s Solution Provider Network.
Given the complexity of international shipping, most sellers hire a freight forwarder to handle all the details, including door-to-door transportation, customs compliance, and insurance.
But don’t just hire anyone. To avoid problems down the line, be rigorous in choosing your international shipping partner.
“For shipping to Europe, it’s critical for sellers to work with a shipping partner who understands their specific needs and Amazon’s requirements,” Robi says.
“A lot of our Amazon sellers are new to shipping to Europe, so we educate and support them through the entire process, from door to door,” Neil says. “We’ve found that sellers really appreciate having a single solution provider when it comes to international fulfillment.”
Understand your shipping considerations and options, including FBA vs. MFN
Note these key considerations and requirements:
Which countries you plan to sell in, and therefore ship to
How you plan to fulfill: Fulfillment by Amazon (FBA) vs. Merchant Fulfilled Network (MFN)
Taxes and duties, including delivery duty paid vs. unpaid
Customer expectations about shipping and returns
As in the US, one of the main things to decide is whether to fulfill orders yourself, use FBA, or use a combination of both.
Benefits of FBAFBA can provide an ideal way to get started selling in Europe.
“We started with a warehouse closer to the Europe fulfillment centers, so we spent a good deal of time and money researching and setting up the warehouse to perform how we needed,” says the seller who expanded to Europe in 2015. “In the end, we chose to skip the warehouse and just use a freight forwarder, which reduced our inventory costs.”
Her business did its due diligence in trying out freight forwarders and “working out a system that will get our inventory straight from the manufacturer into the fulfillment center.”
“FBA simplified our launch process in Europe significantly,” says Carolina Aguerrevere of Hot Chocolate Design. “We sent inventory to a fulfillment center in the UK, which fulfills orders across all five European marketplaces. Compared to fulfilling each individual order ourselves, FBA was more cost-competitive. It also provided Prime badging, which is important for sales conversion.”
Keep in mind that using FBA in Europe does involve some costs.
As soon as you ship inventory into Europe, you might have to pay import value-added tax (VAT) upon its arrival. For example, in the UK, the import VAT rate is currently 20%.
“For our business, the initial cash outlay for import VAT was a substantial amount,” says Dan McCarthy of Blink Home Security. “However, we were confident that our sales velocity would be sufficient to minimize that loss in working capital between paying VAT at customs and final product sale.”
Check out European FBA options for international sellers, and learn more about European FBA fees.
Advantages of self-fulfillmentFor some sellers, fulfilling European orders themselves may make sense. Some sellers use a combination of both FBA and self-fulfillment (MFN).
“To maximize their listings and get a better sense of what sells well, some sellers list items as MFN,” Robi says. “This can be an effective option for sellers whose products are less influenced by fast delivery speeds.”
Another benefit of self-fulfilling into Europe is that, because you’re not holding inventory in the country, you don’t have to pay import VAT.
When researching MFN, be sure to review international carrier rates and delivery times.
“If you’re considering MFN for Europe, keep local consumer expectations in mind,” says Heather Jones-Zielinska of Amazon’s European Marketplace team. “You need to provide accurate shipping times. You should also make sure to handle additional duties and taxes on your products, in order to avoid exposing your customers to delays. This can impact your reviews and ratings.”
Understand the requirements, including import and export regulations
Regardless of which fulfillment method you choose, shipping to Europe involves certain requirements. Two of the most important ones are providing an importer of record (IOR) and using delivery duty paid (DDP). These largely involve who is responsible for paying fees such as import duties and taxes.
Importer of record An IOR is required to sell in Europe. The IOR is the entity responsible for paying import duties and taxes, ensuring that your imports comply with local laws and regulations. Note that neither Amazon nor its fulfillment centers can serve as the IOR for FBA shipments.
“Sellers who don’t have a local address sometimes mistakenly put Amazon as the IOR,” Robi says. “Any shipments arriving at an Amazon fulfillment center with customs duty charges due will be returned to sender. Avoid the headache: Make sure you list the right entity as the IOR, which is typically the seller.”
Why delivery duty paid matters Another requirement for sellers related to duties is DDP, as opposed to delivery duty unpaid (DDU). DDP basically means that you pay the duties, taxes, and other charges upfront so that your customer pays no additional charges upon delivery.
Amazon requires that the total cost for customers be included in the display price, meaning they should never have to pay any additional charges. In other words, never do DDU.
“You must use DDP for your FBA shipments,” Heather says. “Always make sure customers don’t have to pay any additional charges.”
Depending on the nature of your business, getting a competitive rate can be one of the most critical factors affecting your profitability in Europe.
“It can take years to build up relations and volume with a carrier that enables you to get discounted rates,” says Pearl Ausch of First Choice Shipping. “Sellers often find that they can get significant discounts off published carrier rates through using a freight forwarder who has existing relationships and ships in volume.”
“The Solution Provider Network is a helpful tool for comparing freight forwarders and shippers,” Robi says. “We’re often able to get discounts and promotional rates, so it’s worth checking regularly.”
Given the additional requirements for shipping to Europe, mistakes can be easy to make.
“You really want to be rigorous when checking off the boxes for your first shipment to Europe,” Robi says. “It’s a terrible experience for sellers and customers when you go to all the trouble of prepping and organizing your shipment, only for it to get held up at customs or to be considered undeliverable.”
Not getting EORI and VAT registration started right away
As with other government forms, European shipping paperwork takes time. Importing into Europe will likely require you to get an Economic Operator Registration and Identification (EORI) number and VAT registration.
“As soon as you know you want to ship to Europe, get your EORI and VAT registration submitted right away,” Robi says. “That way you’re not twiddling your thumbs waiting for the paperwork to arrive.”
When shipping their inventory to a European fulfillment center for FBA, some sellers mistakenly list Amazon as the IOR.
“The seller or freight forwarder should be the IOR,” Pearl says. “Use a freight forwarder with an address in the forwarding country.”
Using delivery duty unpaid, instead of paid, for FBA
If you ship FBA inventory as delivery duty unpaid instead of paid, you’ll be disappointed to find that Amazon won’t accept your inventory.
“Any inventory sent to an Amazon FC in Europe must be DDP,” Robi says.
For MFN, DDU is cheaper and can sometimes work, but it’s crucial that the customer never pay duties. “When self-fulfilling to Europe, talk to your shipping company and VAT specialist about when DDU might be OK to use,” Heather says.
Ignoring or delaying your VAT registration
Deliveries to fulfillment centers in Europe require a scheduled appointment.
“Don’t have your delivery rejected. Make sure that you or your shipping company schedules the delivery ahead of time,” Heather says.
Make sure you’re allowed to ship the product to Europe
Unforeseen restrictions can apply to products you plan to ship to Europe.
“Just because you can list a product on Amazon’s European marketplaces doesn’t mean that you’re allowed to ship it into the region,” Heather says. “Make sure you’re compliant with local regulations.”
Shipping to Europe can seem daunting at first. But by understanding your requirements and options, and hiring a competitive and trustworthy freight forwarder, you can reach tens of millions of new customers across Europe.