How to Navigate Amazon’s EU Fulfilment Network

Ever wondered how your Amazon business could unlock the potential of the European market without the headaches of cross-border logistics? Well, you can, and it’s not as hard as you think. Introducing Amazons European Fulfilment Network.

Amazon’s European Fulfilment Network (EFN) is a solution which is designed to simplify cross-border selling in Europe, obviously! 

It helps businesses to tap into multiple European markets from one central location which naturally, is a huge time saver. 

With EFN, you’re are able to store your inventory in a single European fulfilment centre. This means that you can then fulfil orders across multiple countries without the hassle of dealing with separate customs, shipping logistics, or VAT registrations for each country. This is a BIG bonus.

When we look at the features and benefits of EFN, its clear to how its seamless integration of logistics makes for easier scalability and optimisation of your Amazon store, ensuring that focus can be put back to growth rather than paperwork and shipping concerns.

Now, let’s get into it…

Understanding the European Fulfilment Network

First off, the European Fulfilment Network (EFN) might not be suited for everyone. So, let’s take a minute to understand the ins and outs.

Amazon’s EFN has opened doors for many by providing a streamlined solution for sellers looking to expand into European markets and provides an efficient way of managing inventory in one place. 

When using the EFN, your able to store products in a single Amazon fulfilment centre which can be located in any EU country. From here, you can sell products in multiple European markets, eliminating the need for individual warehouses or storage facilities in each country. 

Naturally, this significantly reduces logistical nightmares, not to mention expenses, which is good for the any stores’ bottom line and the sanity of the owner.

For Amazon sellers, simplicity is key. EFN makes it easier to ship products across different European countries and regardless of where the customer has placed the order, Amazon will take care of the customs process, VAT requirements, and shipping on behalf of the seller. 

Not only does this greatly reduce the time it takes to fulfil orders, but it makes it a damm sight easier to expand into emerging EU markets in a very short space of time, not to mention the benefits of not having to manage inventory across multiple locations.

Key Fulfilment Options: Dual Inbounding vs. Remote Fulfilment

Now you understand exactly what the EFN is and the benefits it can provide, we now need to look at the various fulfilment strategies you can deploy to get the most from your European conquer.

There are 2 main fulfilment strategies for EU and UK sellers. The first is Dual Inbounding, the second is Remote Fulfilment. 

Dual Inbounding involves sending stock to both UK and EU fulfilment centres, whereas Remote Fulfilment allows sellers to store inventory in one region and fulfil orders across borders from that location.

Don’t let Amazon’s terminology throw you off course here. It’s actually pretty simply, just a few key differences to consider relating to storage requirements, VAT implications, and delivery times. 

Dual Inbounding requires that you manage stock in two regions whilst handling separate VAT registrations for the UK and EU. The plus side to this is it offers faster delivery. The downside being added headaches of multiple VAT registrations.

Remote Fulfilment on the other hand simplifies storage and VAT management by using one centralised warehouse. In this case, delivery times can be longer as products must cross borders before finally reaching the customer. And yes, sometimes products do get lost along the way. Something to consider.

Choosing which strategy is right for you depends on your own business goals. 

If fast delivery and localised stock management are a priority, then Dual Inbounding is the better choice. For sellers looking to lower costs and simplify operations, Remote Fulfilment offers a more streamlined approach, albeit with longer delivery times.

Understanding the Costs of Amazon’s EFN

Ok, so we’ll start off with the not so good news. EFN isn’t cheap, and this can catch a lot of sellers off guard. For those already using EFN, you’ve probably noticed that its way more expensive than if you were to use FBA in say, Germany. And it’s with good reason.

Here’s the deal. Every time your product crosses a border, you’re hit with an additional fee. It might not seem like a big deal at first, but if you’re selling in a bunch of different countries, those costs rack up faster than you’d expect.

And, you know, it’s not just the shipping fees. EFN’s got this thing where they charge you at every little step. Handling, storage, logistics, the works. Every unit you send out, there’s another charge. Before you know it, your profit margins could be taking a hit and then compare that to just keeping your stock in one country. Honestly, it’s sometimes way simpler and way cheaper to stick with the FBA.

So, if you’re looking to keep more cash in your pocket (and who isn’t?), think about parking your inventory in a high-demand country like Germany. It’s not the flashiest move, but it’s smart. Sometimes, sticking with the basics really does pay off.

Why Choose EFN Over FBA?

So, now you might be wondering, if FBA is cheaper, why would anyone bother with EFN? Well, there’s a reason Amazon set it up, and for some sellers, it actually makes sense.

The one big advantage with EFN is its simplicity. Since you’re only dealing with one central warehouse, it means sellers don’t have to worry about managing inventory in multiple countries.

For a lot of sellers, that’s a huge weight off their shoulders. No need to deal with different VAT registrations or separate logistics for each country. Just send your stock to one spot, and Amazon handles the rest.

EFN provides another distinct advantage, especially for those that are still testing the markets in Europe. We’ll assume for now that you probably don’t know where your main customers are located yet, so using EFN allows you to access a bunch of new countries and territories without fully committing to separate warehouses. It’s a good way to dip your toes in the water without diving all the way in.

So, yeah, while EFN might cost more, it’s not always about the cost savings. Sometimes, letting Amazon do the heavy lifting is worth the extra expense, especially if you’re just getting started or don’t want the hassle of managing everything yourself.

Navigating Cross Border Compliance and VAT

This is where it can get complex. Tax and VAT are never a fun subject, but they are important, so pay attention. 

Most store owners are familiar with VAT in their own country, after all you’ve been brought up with it. But things change when you venture across borders with each country having its own rules to follow. 

When using the European Fulfilment Network, VAT registration and compliance non-negotiable, so expect to jump through some hoops if you want to play in Europe.

Ok, so what are the rules regarding VAT? Basically, those looking to do business in the EU must register for VAT in the country where the stock is physically stored. That set in stone and must be done before you make sell anything. Additionally, you may also be required to register for VAT in all countries where goods are sold if certain sales thresholds are exceeded. In any case, careful management is required to ensure compliance with local tax laws. 

To manage customs and VAT effectively, it’s essential to learn the regulations in each market. 

Utilising Amazon’s own VAT services or employing third party tax advisors can help automate compliance and will ensure that VAT returns, filings, and local tax regulations are correctly managed within the correct time frames

Thankfully, there are also some clever tools available to help sellers such as VAT Services on Amazon (VSA) or software such as Avalara or TaxJar, both of which specialise in handling cross-border VAT compliance across the EU. 

These tools simplify the complex process of registering for VAT, filing returns, and managing ongoing compliance in various markets. Don’t fall short when it comes to VAT compliance.

Optimising Your Strategy for Faster Delivery

While many are not aware, strategically placing your products on the EFN can be advantageous. 

By storing products in countries with high demand, you can actually offer faster delivery options during checkout. If you aim is to increase conversions and build customer loyalty (it should be!), then this strategy can ultimately pay dividends. After all, we all know how demanding customers can be when it comes to delivery times.

For Amazon sellers exploring new markets, Remote Fulfilment is a great way to test demand from a non-committal perspective so to speak. 

You’ll be able to track demand in various countries and regions without having to commit to physical warehousing. Once demand is proven in your sector, transitioning to local fulfilment centres will enable you to further optimise delivery speed and customer experience.