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New Amazon ‘Simplify Global Selling’ pilot to remove VAT obstacles

By Chris Dawson November 2, 2016 - 11:33 am

Amazon are piloting a new Simplify Global Selling programme to make it as easy to sell to overseas customers as it is to sell to those in the UK.

Amazon know that global selling can be complex for sellers. They try to make it easy for retailers to list on more Amazon sites with offers to translate listings and through the Fulfilment by Amazon (FBA) programme with their European Fulfilment Network, Pan-European FBA, and Multi-Country Inventory offers. What Amazon can’t help with under these existing programmes are the legal complexities and cost of VAT registrations in multiple countries.

Now to simplify global selling and to remove the VAT obstacles, Amazon have created a new FBA pilot programme. To help win you international sales without any of the complexity of international transactions Amazon simply list your stock overseas and then Amazon themselves buy it from you to resell to the end consumer once they have a confirmed sale.

Amazon describe the process saying “In this programme, Amazon may list your products outside Amazon.co.uk on our European websites. When we get a sale from a customer on these websites, Amazon will purchase your product at your local offer price and sell it to this customer. There are no additional fees for the pilot programme, and you will be paid like any other domestic sales transaction. Moreover, Amazon will manage all cross-border VAT requirements – you will only have your existing VAT obligations in UK, not in the foreign countries“.

 
If Amazon purchases your inventory, your experience will be nearly identical to a domestic FBA sale. There are no additional fees to be part of the programme, Amazon simply purchases the product from you at the price you listed it at. This program has no impact on your sales to other domestic or out-of-country customers.

The only change to your experience will be related to invoicing but you don’t even have to raise an invoice. Amazon will self bill themselves and at the end of every month will email you the self billed VAT invoices that they generate on your behalf. Your only liability is to ensure that your billing details are bang up to date and of course to file your VAT and other tax returns as normal to include Amazon’s self billed invoice.

Put very simply, if you agree to opt in to Amazon’s ‘Simplify Global Selling’ pilot programme, you list on Amazon.co.uk and Amazon re-list your products on other sites around the world (currently within the EU). If they get a sale they buy a product from you on Amazon.co.uk, issue themselves an invoice from you and pay you for the product at the price you said you wanted for it. You’re liable for UK VAT and Amazon deal with all international VAT, taxes and shipping.

If at any point you decide that don’t wish to be part of the programme you can opt out at any time. Sadly, as it’s a pilot you’ll have to wait for an invitation to opt in.

  • Wayne Neale
    8 months ago

    This sounds a great idea. But if, for example, stock has already been moved to an overseas Amazon warehouse on a FBA basis, the sale to Amazon of that product would be a local sale for VAT purposes (ie where stock is) and might create a local VAT registration need, especially if stock is sold within that country by Amazon.

    Thoughts?

    • 8 months ago

      You’d probably only use this new program if you don’t use EFN, Pan EU FBA or MCI and you do keep all your stock in UK FBA only.

  • james
    8 months ago

    everything the GSP from ebay isnt.
    well dont again amazon, for knowing how to do ecommerce.

    • David Brackin
      8 months ago

      My reaction was almost the exact opposite. This is an imitation of the eBay GSP but inserting the retailer in the middle. Given the transactions will mostly be exported out of Europe, Amazon will benefit from a huge VAT refund which won’t be passed on to sellers from this programme. Cunning.

      GSP remains one of my favourite eBay programmes — the way in which they have approached reducing seller burdens to participate in the programme should be held out as an example to all product teams within eBay. They stand in the middle of the transaction and refund both sides if it goes wrong (as Amazon will in their new pilot), but they don’t attempt to put themselves directly in the transaction as Amazon does, other than as guarantor.

    • JT
      8 months ago

      Very clever of Amazon as usual. Entirely create a problem that didn’t need to exist by making it impossible for FBA sellers to calculate their cross border VAT obligations (by not identifying which specific borders were being crossed). They are now offering a solution which seems great, but that prevents the seller from taking advantage of European Market pricing (by fixing the UK FBA cost), and allowing Amazon themselves to take any extra margin from the final sales instead……Owning the supply chain. Very Orwellian.

    • 8 months ago

      Hi JT

      Couldn’t agree more. Sounds good on the outset, but less control for the seller usually means you are paying more in the long run. I have made some software which will make calculating your VAT obligations cross border around Europe a breeze. Delays have meant that I am launching after the festive period and January sales. Will be launching to take into account both your Amazon and eBay/PayPal sales.

      You can see more here

      http://www.crossbordervat.com

      You can currently be part of a free trial as well.

      Many Thanks

      Gurpreet

    • Claire
      8 months ago

      David Brackin, do you actively use GSP on eBay? If so, how have you found it? It’s something we’ve looked into but then seen all the horror stories and not bothered. I did also see a few comments from North American buyers on a forum that if they saw a UK seller using GSP they won’t touch them. So I’d be really keen to hear your thoughts as a user if you do use it?

    • Jamie
      8 months ago

      We use GSP, usually get between 60-90 orders a month from it. The only real issue we have come across is the potential language barriers if you get a customer message, other than that though it isn’t any worse than selling on the normal site. I’m sure others have different experiences but we have found it a nice boost along side our regular sales.

    • Bryn
      8 months ago

      David: What do you mean exported out of Europe? The Amazon blurb says wil list on European websites ?

    • Mac
      8 months ago

      David, amazon will be buying at the price the seller sets. What exactly is bad for the seller? They get a sale at the price they want, do they really care what amazon claim back or not?

  • Claire
    8 months ago

    If you have your stock in UK FBA, then Amazon buys on behalf of a buyer on .de they then ship. But then that customer returns it, where would that returned stock sit? Back in UK FBA or in a European one? If it’s returned to say a German warehouse and then resold to another German buyer does that become a German sale?

    • Kristof
      8 months ago

      When the item is returned it is not yours anymore, but Amazons. They will probably sell it as an Amazon warehouse deal.

  • 8 months ago

    I like it!

    I’m guessing Amazon gets 20%+ markup by treating the sale as an export which covers the extra order fulfillment costs (and when you’ve got the best/biggest consumer logistics network in the world, why not?)

    This seems like an extension of EFN. Bottom line, do I want extra sales? Yes, where do I sign up.

  • 8 months ago

    Is Simplify Global Selling currently limited to Europe-wide for European accounts? ie can I not opt to have my products listed worldwide by Amazon?

  • Mac
    8 months ago

    Bernard, pity their fulfilment network current has some major issues. Cannot send to buyer if taking 3 weeks to get item delivered to amazon.

  • J
    8 months ago

    When will this be rolled out?

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