At the beginning of the year, the UK left the EU and entered a “transition period” where existing arrangements are maintained until 31st December 2020. On 1st January 2021, the UK will formally leave the EU’s Single Market and Customs Union. What’s at risk? Amazon’s EU sellers could cease to attract sales from the UK, and UK sellers could no longer be able to sell cross-border―the time to act is now!
Here is everything Amazon sellers need to know ahead of this new era and our practical guidance on how to handle your FBA orders in 2021.
While UK-EU negotiations are ongoing (determining whether further tariffs will apply), as of 1st January 2021 there will be a customs border between the UK and EU impacting businesses selling across this border.
The EFN allows merchants to sell on all five EU marketplaces while storing products in one country, with just one VAT number. On 14th July, Amazon announced that FBA activities in the UK will be separated from those in the EU. This means that if your goods are stored in the UK, you will no longer be able to distribute them in Europe from your UK warehouses, and the famous “shipped by Amazon” that guarantees fast delivery could disappear from your products. In order to be labeled “Fulfilled by Amazon” in Europe, your products will need to be stored and shipped from a European Amazon marketplace (France, Spain, Germany, or Italy).
European stocks can still be distributed on the European marketplaces and transferred on a pan-European scale as before, but on the UK side, sellers are restricted to Amazon.co.uk.
UK sellers will also have to deal with VAT in different countries. Since Amazon will no longer fulfill EFN orders across the UK-EU border, UK sellers will need separate VAT numbers for each country in which their inventory is stored.
Extended delivery times, additional customs fees, Amazon’s algorithms favoring your EU-based competitors… No point in taking chances: to sell via FBA in Europe after Brexit in 2021, you should hold stocks in European fulfillment centers.
To mitigate the impact of these changes, you should consider splitting your inventory and sending it to fulfillment centers in both the UK and the EU, so that you have sufficient stock on either side of the new customs border.
This will require you to ship your products across the new UK-EU customs border and provide additional information as part of a customs declaration. Stock will be shipped to an Amazon Warehouse in Europe at your own cost, and will then be distributed as usual.
As of 1st January, businesses based in mainland Europe wanting to continue to sell to UK customers will also have to split their stock. Reserve some stock to be held in Amazon’s UK warehouses.
Sellers from outside of Europe will need to go the extra mile and split their stock across at least two Amazon FBA warehouses―one in the UK and another on the continent for selling to mainland Europe.
While these administrative changes and new distribution networks are somewhat overwhelming, the big winners will be those who have adapted to future changes as soon as possible. We’re here to discuss these changes to FBA between the EU and the UK!
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