Amazon lately announced some big changes for FBA sellers using EFN or Pan-EU in the United Kingdom. The FBA operations of the mail-order giant will – because of Brexit – be divided into European and UK services. The European Fulfilment Network in the UK will come to an end as well as the inventory transfers for Pan-European FBA between the EU and the UK.
Maximilian GamplLast Updated on
Online sellers in the UK need to be aware that they will no longer be able to fulfil orders from all EU marketplaces from their UK warehouse.
What is Amazon’s European Fulfilment Network?
The European Fulfilment Network (EFN) allows FBA sellers to store their inventory in one of Amazon’s local Fulfilment Centres across Europe and fulfil all orders coming from all 5 European marketplaces from the same local inventory pool.
Amazon FBA and Brexit: European-Fulfilment Network (EFN)
EFN allows you to fulfil orders from any Amazon European marketplace, while you ship your goods to Amazon’s fulfilment centres in just one country such as the UK.
From 1 January 2021, goods of EFN sellers storing in the UK will only be used for national order and no longer to fulfil orders from other EU marketplaces. This does not only mean a decrease of 446 million to 66 million potential customers, further having only one VAT ID will often no longer be enough as storing in a country always make a VAT registration mandatory.
What is Pan-European FBA?
Pan-European Fulfilment by Amazon (Pan-EU) is a fulfilment option for Amazon sellers using FBA and allows storing in all warehousing locations in Europe and sell your products from there as well. This mean storage in up to 7 countries, ensuring the fastest delivery times and the lowest fulfilment fees.
Amazon FBA and Brexit: Pan-European FBA (Pan-EU)
When using Pan-European FBA, you usually send your stock to a certain warehouse and Amazon distributes the goods for storage in the European countries you are storing in – always depending on the respective demand.
Due to Brexit, this is going to change. From 1 January 2021, there will be no inventory transfers between the UK and the EU anymore. This mean that you will need to have you inventory in the UK and in the EU or you decide for only one of those options, but from 1 January 2021 this won’t be a combined FBA fulfilment solution anymore.
How to continue selling in Europe?
Sellers based in mainland Europe will have to handle their stock in a similar way. Either they mainly sell within the EU and store their inventory in Amazon warehouses in Germany, France, Spain, Italy, Poland and/or the Czech Republic or they also store in UK for the purpose of selling there.
Seller from outside the EU will also need to split their stock if they want to sell in the UK and in the EU.
What changes for Pan-EU sellers?
If you are selling with Amazon’s Pan-European Fulfilment Network and currently storing in up to all 7 storage countries and selling on all 5 marketplaces, Amazon wants sellers to do the following: Split your shipments!
To continue selling with Pan-EU will still be possible in the future, the only difference is that goods will have to be stored in the UK and in the EU. With the latest adjustments of the fees for fulfilment, Amazon Pan-EU is still very likely to be the most profitable FBA method for many Amazon sellers.
You are still not sure if Pan-EU is worth it?
>>Here<< you find a calculator to find the best FBA service for your online business. Please also note our current Amazon Pan-EU offer.
Amazon’s FBA Brexit announcement
[…]”The UK is due to formally leave the EU’s Single Market and Customs Union from January 1, 2021.
While UK-EU negotiations are ongoing (including determining what tariffs, if any, will apply), from January 1, 2021 there will be a customs border between the UK and EU which will have an impact on businesses working across this border.
This will have the following impact for Amazon Selling Partners from January 1, 2021:
- FBA offers using EFN will not be fulfilled across the UK-EU border.
- Pan-European FBA inventory transfers will stop between the UK and EU (however, Pan-European FBA will continue to transfer inventory within the EU region, supporting your sales on Germany, France, Italy and Spain sites)
- To mitigate the impact of these changes, you should consider splitting your inventory and sending it to a fulfilment centre in the UK and the EU, so that you have sufficient stock either side of the new customs border
- This may require you to ship your products across the new UK-EU customs border and provide additional information as part of a customs declaration
Your Amazon business will continue to operate as usual until January 1, 2021. However, there are actions you can start taking now to prepare your business for the new customs borders. For information about how you can prepare for these changes, and for all of the latest information about Brexit, please see our BREXIT guidance help pages and the UK government website.
Thank you for selling on Amazon. We remain committed to supporting your business selling in the UK and in the EU as we make this transition, and we will continue to provide the latest information to support you and help your business thrive in the future.”
UK Marketplaces to collect overseas seller VAT from 1st Jan 2021
Despite the changes for Amazon FBA sellers, the British government has also published new plans for marketplaces to collect VAT from overseas sellers to ensure that goods from UK companies will be treated the same way as from EU and non-EU companies and in general to make the collection of VAT from overseas sellers more efficient.
From 1 January 2021, marketplace operators will have to make sure VAT is paid and even the tax allowance for imports from outside the European Union will be abolished.
These are the main VAT changes for online sellers:
- Abolition of the Low Value Consignment Relief, which exempts import VAT on consignments of goods worth £15 or less
- Online marketplaces will be liable for the collection of VAT.
- For goods shipped from overseas and sold directly to UK consumers (excluding marketplaces), the overseas seller will need to register for and pay VAT in the UK
- For sales of goods by overseas sellers where the goods are already in the UK at the point of sale, the responsibility for charging VAT is transferred from the overseas seller to the marketplace operator
- Overseas sellers will continue to be responsible for charging VAT on goods already in the UK and sold directly to UK consumers without the involvement of marketplaces.
Since we are currently still in the transition phase, other aspects will presumably change, and nothing is yet set in stone. But one thing is for sure, the changes regarding storage in Amazon’s warehouses and the resulting consequences for EFN and Pan-EU dealers will come!
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With almost half a year to go, traders can take timely action, adjust their storage and continue to sell successfully in Europe. Of course, the sales figures have to be considered individually to decide whether to sell only in the UK, only in the EU or both.
In addition to this, the new VAT regulations must be observed when selling from overseas. It it likely that the Brexit will lead to more e-commerce and tax changes, we will keep you updated in our blog.