Amazon started as online book store and has grown to be the worlds largest online retailer.
Amazon FBA Brexit Bombshell – EFN and Pan-European FBA ends for UK
The Amazon FBA Brexit bombshell has dropped which will significantly impact your Amazon business from the 1st of January 2021. Amazon’s UK FBA operations will be split from the EU with no more EFN (European Fufilment Network) and an end to Pan-European FBA inventory transfers between the UK and EU.
Amazon FBA Brexit Bombshell 1 – 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 the 1st of January 2020 goods in Amazon’s UK fulfilment centres will no longer be used to fulfil orders in Europe. Effectively your sales opportunity from selling on Amazon UK dropped from 446 million EU consumers to 66 million brits.
Amazon FBA Brexit Bombshell 2 – Pan-European FBA
Currently, with Pan-European FBA, when you send your products to fulfilment centres in the UK, Amazon distribute them for storage across Europe. Your products become Prime eligible and visible to millions of customers, with faster delivery while you pay only UK local fulfilment fees.
This will end for stock in Amazon UK warehouses on the 1st of January 2021. However if you send stock to an Amazon warehouse in Europe then it will still be distributed to other European warehouse, with the exception that it won’t be sent back to the UK.
The difference between EFN and Pan-European FBA
EFN is effectively keeping your stock in the UK and picking up the shipping cost when you get an international sale. Pan-European FBA means only paying local shipping charges but Amazon can move your stock out of the UK into Europe so that it is closer to the end customer and can be fulfilled quicker.
EFN is an easy way into international selling whereas Pan-European FBA will generally involve having higher levels of inventory. Ending both of these programs for UK merchants means if you want to sell into Europe you will have to split your stock, send some to FBA in the UK and some to FBA in at least one other European country.
Whilst Amazon say that the changes will apply from the 1st of January 2021, in reality you might find impacts of the Amazon FBA Brexit bombshell start to impact you earlier. For instance, if you already have stock in Pan-European FBA it is feasible that Amazon will repatriate your stock before the end of the year and certainly are likely to stop sending your stock to Europe at an earlier date. This means that certainly around Christmas, perhaps sooner, your European sales will start to decline.
Definitely, from the 1st of January 2021, if you do nothing then the full impact of the Amazon FBA Brexit bombshell will be a complete cessation of your European sales.
The logistical impact will be a higher barrier to entry to selling on mainland Europe from the UK. If you want international sales from Europe then you will be forced to split your stock (which will probably mean higher inventory holding and additional costs) and send part of your stock to a warehouse in Europe (with the associated additional shipping costs compared to the UK).
Note for German, French, other EU sellers and for sellers outside Europe
A heads up for merchants based on mainland Europe, your stock will be treated similarly and if you want to continue to sell to UK customers after the 1st of January, you too will have to split your stock and hold some in Amazon’s UK warehouses.
If you are a seller from outside Europe, perhaps selling into Europe from the US or China, you will also need to split your stock into European mainland stock and UK stock and send to at least two Amazon FBA warehouse – one in the UK for selling to UK customers and another on the continent for selling to mainland Europe.
Full Amazon FBA announcement
“On January 31, 2020, the UK left the EU and entered a transition period where existing arrangements are being kept in place until December 31, 2020. 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.”
Not a bombshell, just a logical and legal decision arising from Brexit. AMAZON and all others suppliers will have to take the same decision: creating a restricted market from a large common one.
Brexit means severance from the EU free market, regaining UK’s sovereignty and installing new commerce conditions which will be inferior as UK won’t part of the EU and its customs zone.
The only bombshell: taking four years to discover that.
See the bright side, AMAZON may create a new zone uniting UK, Australia and NZ. It those two countries don’t see that as an infringement of their sovereignty.
The bomb shell is that Amazon aren’t putting a process in place to handle customs shipping themselves. If anyone is big enough to handle the additional processes then surely Amazon are?
And if Amazon can’t (or won’t) handle the post Brexit process of shipping from the UK to the EU and vice versa under EFN, what chance that merchants will find the process manageable?
Exactly. No surprise at all. I’ve done a few customs forms and it’s a right pain. For Amazon to do them on your behalf would need the seller to provide them with all of the information, along with any mistakes or intentional misclassification of goods to avoid whatever customs charges there may or may not be for example. I would assume that the buck would stop with Amazon as the importer for providing any such incorrect or fraudulent customs information I’d imagine, and they’d be hugely exposed to charges or legal costs.
Perhaps they’ll be a system on Amazon in the future, but as we’ve still not got a clue what the Brexit deal/no deal, WTO or whatever the heck its gonna be, is, then this is how it has to be…
Hardly a bombshell that ending free trade results in new trade barriers and costs. How was it ever going to be anything else?
“See the bright side, AMAZON may create a new zone uniting UK, Australia and NZ. It those two countries don’t see that as an infringement of their sovereignty.” looking forwrd to seeing all htose amazon trucks driving to and from Oz in 24 hours…
In total agreement. It blows my mind having UK officials in charge of trade saying UK will trade as easily with Oz and NZ as it is currently trading with EU.
Without taking into account that trading with 30 million people instead of 445 million people won’t get the same gains.
Great salesmen indeed! Now you just have to try to find how to sell 445/30 times the same products to keep the gains at the same level or to increase your margins, without taking into account that VAT and other fiscal revenues will be paid to OZ and NZ treasuries instead of UK’s…even with Can Do or bulldog spirit, it won’t be easy. Bright side, you succeed, I have a job for you.
I truly don’t understand. I bet my education based upon mathematics, may explain my blindness. I may understand the sovereignty side but it stands fairly simple that if each nation chooses to have its own standards, it will be harder to find a common standards between nations. Brexit is like having identical electrical plugs at the beginning, then deciding to have different plugs and trying to connect them. In the end you cut out the plugs, insert directly the wires in the plugs and have some nasty accidents. Or you buy expensive adapters instead of previous simple common plugs.
Regarding AMAZON, it won’t be possible to organize shipping between EU and UK because they will be in different customs zones. Take a product coming from UK moved to EU : how do you compute taxes paid to UK and taxes paid in EU? without taking into account product safety compliance, rules of origin? The sole sensible decision for AMAZON is stopping that business immediately and trying to find new markets.
This was to be expected and is just a logical consequence of Brexit. The people voted for it, now the people can have at it. Smaller companies that rely on exports to the EU (no matter what channel), will be damaged by this. This has been made clear for years. Importing and exporting post Brexit won’t be easy and straight forward as advertised by the “winners”.
I stopped arguing against Brexit after the general election. They won, so they can own it now. My company will suffer as well (we rely on imports, so face huge costs and delays due to customs), but we will be able to cope. In worst case we will need to downsize our workforce and increase pricing.
Customs declarations are a massive PITA and quite complex (and expensive – it’s not as simple as just supplying a few custom codes and country of origin information). So I am not surprised that Amazon has no interest in sorting this for a random British seller who wants to sell a few units to Europe.
What was claimed to be ‘Project Fear’ proving to actually be true.
We will be poorer with fewer rights but hey ho we have blue passports.
Regarding PAN EU FBA, having the additional cost of shipping goods from the UK to a French, German or Polish Fulfilment Centre to enter the EU FBA system will make it unviable for most.
“And if Amazon can’t (or won’t) handle the post Brexit process of shipping from the UK to the EU and vice versa under EFN, what chance that merchants will find the process manageable?”
Very little chance!
Thank the foolish public and government who voted for Brexit without considering the damage to UK exports. This is not a marginal effect either, it will effect thousands of UK businesses who will likely see a huge drop in international orders due to increased hassle of completing customs.
It’s not Amazon’s responsibility or in their interest to offer work arounds for a country that willingly establishes barriers to trading with it’s neighbours.
The government should provide systems and resources to make it less painful for sellers to export goods to the EU.
Then Central Government needs to cover the loss of demand by creating stockpiles of purchased finished goods and supply chain components. Worth increasing the basic tax rate outside London by, say 10% to pay for this.
I don’t understand why you think that t he government will help anyone. Or why you want to impose a n extra tax on people outside London. Move parliament to Birmingham permanently to reduce house prices in London and to move jobs closer to where people actually live. It’s important to distribute jobs around the country. Corona will have an effect on the UK and E U economies and the simplest thing for them to do is to take your economy away.As you were told.
Whilst it shouldn’t really come as as surprise its still going to be devastating for many sellers. The question is, what is going to replace this? (spoiler alert, probably nothing)
Anybody know how will this affect digital sales (books, music etc)
My understanding at present is that there is as yet no agreement between the EU & UK over any kind of data sharing.
Aaaaaannnnd it’s over for me.
Its all over folks.
So we will have very costly access to the EU market, with possible delays and checks, whilst the Chinese sellers carry on doing exaclty the same in the UK.
Id prob just stop if EU access become too expensive or move to the EU.
We have been planning for this potential barrier for months now and been advising clients to plan towards perhaps shipping stock from e.g China into e.g France and having the majority of their stock in the EU and full-fill stock from the EU into the UK.
In addition to this gaining VAT numbers in each of the EU locales too.
This is another 100% own goal by the UK Gov and could of been avoided by staying in the Single market….
We import a lot from EU and non-EU. I don’t mind paying the import taxes and the extra paperwork involved.
Smaller business like us importing from EU will have the extra burden of import tax/VAT payable upon goods delivery. The VAT is claimable back however small businesses’ cash flow could be seriously affected.
Meanwhile I’m looking forward to the “bespoke” and “easy” trade deals the UK will have with each and every country in the EU and the whole world. Easy life for Mog, easy life for us 😉
Oven ready, world leading …..
Brexit, the promised land, the land of milk and honey, the land of opportunities…
We sell on Amazon UK & all the other EU sites. Will we still be able to sell on the Amazon EU sites but fulfil orders from our own warehouse?
As I understand it. You will need to be VAT registered in Germany if you sell on DE even if you ship from the UK. There will no longer be thresholds.
I think it is a bit late now to be worrying about that, eh?
You will need to follow every large corporation and establish a EU based business and warehouse if you are expecting to continue selling to the EU easily either with or without Amazon, thus leaving YOU to bear all the costs and hassles of customs charges and clearance and shipping your product to your EU subsidiary and warehouse.
If you were selling a product for say, 100 Euro value into say, Netherlands today, you need to calculate how much all the staff, infrastructure and customs charges/inconvenience will add up to. Notwithstanding any tariffs you may become liable to in future, my bet is you will need to be selling the very same product for a Euro value of 120.
Of course, if you are already selling in Euros, you will be repatriating those Euros into Sterling at a much better conversion rate as the Pound falls through the floor and hits parity with the Indian Rupee. I just hope you don’t import any goods from the EU since their price post-customs union will be more than 20% higher, maybe even 50% higher.
I wouldnt expect anything else. I am no Amazon fan but cant blame them at all for this
Things will evolve once the deal has or has not been reached. Solutions will appear and just a case of wait and see.
Net result of this will be
1) Make less
2) Put up prices in Europe and make less.
Companies who cannot afford to open warehousing in the EU, wont really be able to compete in Europe and if they do it will be on Tiny and likely not worth it margins.
Lets not forget returns via FBA often marked as faulty and normally come back with tags in place in a new condition. Either you will have to pay expensive return and handling fees under this scheme via a 3rd Party or Scrap the item via FBA, as youd need to pay
1) Return shipping to amazon FBA
2) Shipping and handling to Amazon to Ship to a 3rd party
3) Pay the third party shipping and handling to get the product/s back to you.
My point is it will be at least 7 Euro at each stage, and that’s being optimistic.
So if items not worth 21 Euro to you, you’d be better off asking FBA to dispose of it for you and pay that fee instead.
Making your margins and EU Selling benefit even worse.
In my experience, the biggest problem with Returns is in the UK warehouse. They routinely mark sellable items “unsellable” for reasons I can only speculate on. I periodically remove them and send them back through a proxy at great cost. EU warehouses actually repack things.
I am very sorry for my UK colleagues who are going to suffer under the weight of this incredibly stupid decision. At least you don’t have 140,000 people dead from Covid, as we do here with the USA version of that style of governance.
And yet Amazon UK just emailed me today with a webinar promoting Pan-EU and EFN, as well as their VAT services! Why??
I only just went ahead and submitted VAT registrations using Amazon’s VAT Services offer. Looks like by the time we are fully registered we may have about 2 months worth of sales at most before we have to stop.
I guess we will be liable for the fees for deregistering VAT in 6 EU countries after barely making use of it.
Clearly if Amazon are not going to make this work then the small sellers are really going to struggle to make it work especially for low value high volume products.
Find another platform to sell your goods on. Almost 4 years after the event & people still moaning. There’s life outside the EU , if folk don’t like it then the EU can still be your oyster!
What other platform ? What other platform offers such easy access to a market of 466 million?
Automatic warehousing for small companies between U.K. and Europe? No other platform does that. You obviously have not idea of what you are talking about.
Furthermore those businesses that decide to manually split stock between the EU and the U.K. so warehousing in the EU, increases tax revenue for the EU and reduces it for the U.K.
The other platform is their god Nigels Bung hole !
Its so worn out you hardly ever see him any more apart from sometimes at dover.
“You and others just swallowed the line of “Vote Leave” that nobody voted for a political relationship in 1975: that’s exactly what they voted for!”
in 1975 it was never suggested a federal europe with a central government in Brussels,plus a court holding jurisdiction over the UK
would be the outcome
the manifesto was for a trading relationship or” common market “
I think that many comments on here are forgetting – I don’t think anyone who voted for Brexit wanted to cut easy trade with the EU or anywhere else, there would be no reason to do that. What made people vote “out” is because it was no longer just a trade relationship – because of the requirement to level the playing field with standards etc. it became a behemoth that many couldn’t stomach – European Parliament, European Commission, European Court of Justice, Freedom of movement and so on. The fact that England at least were net contributors to the huge amounts of money to be in this club also didn’t sit will with many. Not saying we shouldn’t have left but I doubt many voted not to buy and sell with EU countries. Their principals overrode their decision at the ballot box.
Why wouldn’t you want a level playing field, doesn’t make sense?
If you did have those things one country could simple state-run businesses and subsidize, for example giving out guaranteed loans at 2.5% and the flood the others with product.
Whilst China does that to the whole world anyway, but they are not part of any club either and don’t enjoy the ease of movement and trade we do in the EU (But for not much longer)
You can’t just turn up at the British Embassy in China and demand a visa, work rights etc, many Visas are refused.
Likewise, id imagine soon UK Citizens applying to go to Spain, for example, may get refused, if they have a criminal record for instance, once we leave the EU, or they may be deemed to be looking for work.
Yes the UK were net contributors of about £9bn, but Brexit red tape (e.g. customs forms) is going to cost UK businesses around £7bn alone. It’s clear that Brexit is going to cost us way more than the cost of membership.
It seems to me that your memory converts everything to the present tense. “People didn’t vote “out” because of “level playing field” requirements: that has literally only become part of the discussion this year, since the last election! And by the way, “level playing field” requirements *are* part of the “trade relationship”: that’s why they’re an issue now, in the trade negotiations.
You talk about “a behemoth that many couldn’t stomach – European Parliament, European Commission, European Court of Justice, Freedom of movement”. You’re talking about all the components that were in the EEC when the UK joined in 1973. And by the way, the political relationship was front-and-centre of the deal in the 1975 relationship. The 1975 government leaflet said:
“The aims of the Common Market are:
– To bring together the peoples of Europe.
– To raise living standards and improve working conditions.
– To promote growth and boost world trade.
– To help the poorer regions of Europe and the rest of the world.
– To help maintain peace and freedom.”
You and others just swallowed the line of “Vote Leave” that nobody voted for a political relationship in 1975: that’s exactly what they voted for!
You say “I doubt many voted not to buy and sell with EU countries”. But they exactly did! They voted for the Theresa May’s “Not really Brexit” campaign in 2017, which said a close relationship inside the Single Market and Customs Union is not possible because it’s “not really Brexit”. They voted for Boris Johnson’s “Get Brexit Done” campaign in 2019 which was very clear that a NoTradeDeal exit was on the cards and entirely acceptable. And in both these elections, they had been told countless times that the EU would not allow a cake-and-eat-it cherry-picking relationship. That they didn’t believe it, or closed their ears has nothing to do with what they voted.
They voted for what they got, and now’s the time for them to simply suck-it-up.
True and well said
Leaving aside your that comment is a pile of rubbish that you made up, wasn’t it Fromage, Gove and the rest who were saying “Of course we won’t leave the Single Market”?
Or did we all imagine that?
Why didn’t your liars put
“You’ll odds on lose your job and forget buying stuff on the internet, oh, and Immigration won’t change – but you’ll get a Blue Passport!!”
on the side of a bus?
January 1st is a long ways away. People are forgetting that Amazon has a history of announcing things and never putting it in place or reversing the decision. Do I think that will happen here? No not really because Amazon isn’t the one that voted to leave the EU and certain parts of this are out if its control. I wouldn’t be surprised one bit if some backroom plan is hatched although what it wouldn’t know. I don’t live in the UK and do not know all the details of the split so I can’t really say. Amazon will only make the effort to try to help sellers if it benefits them. It might make the number of sellers selling on the platforms go down quite a bit but I doubt that the actual products total will go down, will just be purchased from someone else. It seems to me that this would have, or should have been a large part of the exit vote, but we all know how crappy politics can be
Everywhere you go another simpleton. Being an idiot isn’t a principal (sic). If English racists aren’t intellectually equipped to understand that erecting trade barriers with your major trading partners is a bad idea, they should sit at home on referendum days. And election days too, by the way.
Taking back control = reducing your potential customer base by 86%
Tariffs will cripple SME’s should our incumbent government fail to get a deal with the EU. British businesses who’s market is in Europe, will be uncompetitive due to having to increase their costs to cover longer transport times and costs incurred due to export controls. Unless they can hold unlimited stocks in Amazon warehouses on the continent, which is unlikely.
Edward your comment is by far daftest I have read and pretty much sums up the collective ignorance of those who voted leave. You clearly have zero concept of how trade works. It’ll be interesting to see your moaning when the economy tanks and you lose your job because of the impact of this.
Perhaps you can stick your fingers in your ears and sing the national anthem? Funnily enough there is life outside Britain also, be interesting to see how well Europe does while we flounder accepting poor trade deals from the USA to keep some semblance of relevance on the world stage. Again futher making British business less and less competitive. You voted for it, you own it.
Edward thinks he will be one £55 an hour, cleaning toilets or something because all the Eastern Europeans will go home and the funds will come from a magic money tree. The same on his god Nigel Farage said the EU took.
That’s about as far as leavers can see.
The article mentions EFN and Pan EU but there are other EU selling options in place so I wonder what will happen with those? I guess the “Allow Amazon to buy my products to sell globally” option will also be affected in the same way that EFN is – but MCI will stay the same since it already requires stock to be shipped directly to EU. The interesting one is FBA Export because enabling this option covers more than just EU? So will it fully or partially remain in place?
And there are still Brexiters trying to Justify the disaster they have caused.
When the EU expanded and we let in large numbers of unskilled and semi-skilled workers from eastern Europe, we pushed down the wages of those at the bottom of the ladder. If you were a labourer, a brickie, a factory worker, your wages were going down, down, down, because someone from Poland would do it for less.
I doubt those UK born and bred people who became worse off give 2 hoots about the “disaster” that is a bit more paperwork on your customs forms.
Remember that the next time you tick labour on your ballot paper. You can’t be the party of the working class while doing them over at the same time.
Now instead the factories will close as they will be uncompetitive and replaced by imports, no one will be able to afford to pay a brickie or a labourer to extend and new home prices maybe pushed down so those projects will also be lost.
Brickies and labourers will get £50 more a day but only have 18 days work a month.
“the party of the working class”
What, like working class public schoolboy Farage?
Or the Brexit Banditos in the Tory Party, like Owen Patterson, who takes 500 quid an hour of a firm that he then gets a job (Covid testing) for without tender – and they screw up?
Like they did the last job he got them? (Losing police forensic evidence)
I don’t care if you’re a mug son, I just wish you hadn’t been able to mug the rest of us off.
Gavtard. There hasn’t been a Labour government since 1979. Put your head back where it was.
Gav says that Polish immigrants pushed down the wages of those at the bottom of the ladder (labourers, a brickies, factory workers).
– The government sets the minimum wage, and always had the power to make sure that everybody in society had a satisfactory income.
– Payscale.com says an average bricklayer’s hourly rate is £13.84, which is almost exactly the same as I get after a university degree.
– Why are the people “at the bottom of the ladder” in that position? Is that the fault of the people themselves for not skilling themselves; or the government for not giving opportunities for apprenticeships, etc; or EU Membership for having free movement of Polish workers? What is the reason the factory workers are not electricians or plumbers, for example, billing £40 per hour, or decorator at £16 per hour?
– Have you noticed that there are many jobs that only Eastern Europeans will do? Who harvests your food? Who actually works in the Amazon factories? British people’s lifestyles depend on these jobs that few British workers even apply for. Poor British people didn’t even turn-up for fruit-picking jobs for a full week, even during furlough to supplement the 80% wages they were getting from the government.
I would agree with you if you pointed to the EU Posted Workers Directive, which allows employers to bring teams of project workers from another Member State and pay them the lower rate of that country. It was an issue which no British politician mentioned until Jeremy Corbyn raised it in the middle of the 2016 EU Referendum campaign. Sure enough, that was bad for local workers and terrible for the immigrant workers. But soon after that, Macron in France took up the issue, and had it changed without any help or support from the UK. The EU has always been concerned to raise living standards and improve working conditions. Where something goes wrong with that, they’ve always taken pretty swift action to find a solution when an issue is pointed-out.
UK gov is neglecting its own people (e.g. an austerity that turns out was a political decision), yet very few people can see it though. I do not like politicians in general, but English ones are terrible. They should be riots in the streets for various reasons for the last 20 years at least, instead everyone seems to be happy to be able to order their takeway…..
In the UK born British people with low education, generally think they are better than everyone else with the highest morals through history , this is why politics can manipulate them so easily.
The way history is taught up to the age of legally attending school, it basically goes like this.
In world war 2 we the ‘British’ basically won our selves, and so forth. They won’t talk about the opium wars, slavery, empire and so forth in any negative manner.
As those not seeking further knowledge won’t educate past this, they carry these beliefs for the rest of their lives.
This makes when think they are superior to people of other nations and sadly to their own determent.
Yes, political decision vs necessity – it’s difficult to follow. I’ll try to explain where the line is.
In the 2008 banking crash, the UK started-off in a bad place: it had spent money and borrowed money for most of a decade: quite a lot in good places, but plenty ineffectively. That was at a time of consistent growth. But come a ‘rainy day’, the piggy-bank was empty. You’ll remember Gordon Brown had his “golden rules” about ‘borrowing to invest’. They were politically manipulated, of course. After a couple of cautious years, he was another spend+borrow chancellor and then PM.
As the financial crisis played-out, public borrowing increased further (less tax receipts, more unemployment benefit, bailouts for banks, some attempts at economic stimulation, etc). You’ll remember the “quantitative easing” (‘printing money’, which is effectively diluting the value of money in everybody’s pockets and bank accounts and devaluing the currency).
So at the point of the election in 2010 things had really come to a crisis. The financial markets, which provide the money to support public borrowing, were in some turmoil. Iceland had gone bankrupt. Ireland was on its way to being bankrupt (you remember the first thing David Cameron’s government did was lend them £10bn?). Greece’s banking system (even inside the Euro) had more-or-less collapsed, and with it the Greek economy. Italy and Spain’s banking system looked like going the same way, but this time the Eurozone put more muscle behind their rescue bid. And currency speculators looked like turning their attention to the UK as the next domino to fall: it was considered over-endebted and there was little market confidence in fixing the problems. That was where we were at exactly the week of the 2010 election. And the election produced no clear winner.
The Coalition government was formed, and an austerity plan was made and rolled-out. I would say that, at that time, austerity was not a political option. If the boat hadn’t been steadied, the markets would have lost confidence, so ||Time-out|| to consider what that means. Government raise debt by issuing bonds, which they do for 1 to 10 year periods, at a fixed interest rate. And because interest rates were very low (to stimulate the economy), the cost of servicing the debt had been low. There’s no way the government can pay off all its debt when the bond period is up, so it has to sell new bonds. But when markets get nervous about the government’s ability to pay back the loan, they won’t loan at a low interest rate any more. And investors may take their money out of Pounds and convert it to some safe currency anyway. (At the time that was seen as the US dollar and Japanese yen.) If you’ve been servicing a debt at 1% interest (or less) and to roll-it over you’ve got to pay – say – 10% on a huge amount for the whole of a 10-year bond period, the economy quickly tips from sustainable to unsustainable and that’s a vicious cycle ||End-of-Time-out|| … so they had to convince the markets that they were serious about lowering debt: hence austerity.
Actually they didn’t reduce debt. For all the austerity, there were only a few odd months where the debt went down. Having a ‘deficit’ means the debt is increasing all the time. But the market panic was assuaged at that time. The recovery was slow, but there came a point at which continuing austerity became decreasingly an inevitability and increasingly a political choice; but you see it didn’t start out that way.
So now in 2020 we have the huge government spending related to Covid-19, and Boris talks about more spending and no more austerity. The financial markets are so far stable. Partly the reason for that is that there is hardly a safer place for investors to transfer their money. They know there’s going to be a worldwide recession. They know there’s got to be economic stimulus otherwise to get out of it. But there are plenty of countries who aren’t able to raise money for economic stimulus (take India, for example, despite its size). And if there comes a tipping-point where the UK is seen increasingly as a bad bet, that will happen to the UK too.
At the moment, the Boris Johnson government’s plan seems to be to keep the very high debt, and service it with the very low interest rates demanded. (In fact there’s little choice.) But there’s the consequence to it, which I explained. If the markets lose confidence and bond interest rates sky-rocket, the UK will find itself unable to service the extremely high level of borrowing, and the economy will collapse. The markets will lose confidence if there becomes a big difference between the stability of UK markets compared to others. If you ask my opinion, I’d say that’s quite likely to happen: say there’s another Covid19 wave in the UK this winter but not in most other countries. Say there’s no trade deal with the EU by the end of the transition period. Disaster could be closer than you think. And the UK is in other ways particularly vulnerable. Japanese debt is mostly held by Japanese companies and people. Chinese debt is – of course – held by China: it’s not so subject as foreign debt to switching currency. USD and EUR are massive compared to the Pound, and more difficult for financial markets to attack. The UK and its Pound are in a vulnerable place.
Sorry that’s very long – I hope it’s useful.
I referred to austerity as it “turns out” was a political act, that’s present simple.
Of course, all budget cuts were perhaps needed at the time in 08/09, however what I meant is that the austerity did not need to be prolonged for over 10 years. Now, we’ve got Covid-19 and the gov is splashing money left and right, and not all of it is “borrowed” either.
Ok, this is going to be the last comment I make on this page, and I will turn-off notifications, because I think I’ve invested enough time in it. But just in case there’s a confusion:
When you talk about ‘present simple’, I think you’ve read my reply last night to Gav. That’s not the reply I wrote for you, a short time ago. And I was trying to help.
Getting rid of more pile it high sell it cheap sellers. Music to my ears.
Bye Bye Amazon sellers. You will be missed like a new found lump
How will this get rid of pile it high sell it cheap sellers? In which market places? Thanks.
“Getting rid of more pile it high sell it cheap sellers. Music to my ears.”
Yup, Brexit has really showed the Chinese, hasn’t it.
And they say leave voters weren’t thick……
They are only Cheap because they are evading
1) Sales VAT
2) Import Duty
3) Import VAT
4) Paying no corporation tax as many are in Hong Kong ( Currently 19% in the UK)
5) Cheap Discounted Shipping to the UK via Air and speculated reduced eBay and Amazon fees. (eBay and Amazon have been courting Chinese sellers for years with special training courses and gatherings inside China)
6) Having State-owned fulfilment Centres right here inside the UK. 4PX, for example, is state-owned by the Chinese government and has warehouses as large as amazon on some of the same sites.
HMRC are to blame as much as the platforms for this.
The UK has the power and had it for years to stop this, they simply choose to ignore it, don’t understand it, or can’t be bothered to tackle it.
Eu are doing a grand job of imploding at the moment
Amazon has allowed idiots from the UK to flood the markets with Razor thin margins and thus destroy other sellers business model. Mine included.
The less of these sellers the better…enough said
Given the way the EU has taken action on the Brexit threat so far, I would all but shocked if THEY announce a free trade agreement with NZ and Australia on Jan 1th, 2021 🙂
The free trade deal between EU and Japan killed manufacturing of Japanese cars in the UK already.
Brexit is a dump idea, executed by ignorant poshs. UK could have worked inside the EU with partners to fix EU shortcomings. But bottom line, those poshs thought what ever went wrong in the UK, and foremost England, can only be tracked back to the EU, because “They never fail”. And “Cool Britannia”, aka Labour, tried to be better conservatives than the conservatives; didn’t speak up to make people aware what was going on.
But heh, if you want to get back in one day, I am sure we Germans are the first to welcome you. What an irony that would be
Would it not be more convenient to take their economy off them? You get the money and you don’t need to deal with the constant tantrums.
Good, who cares about some multi-billion dollar company like Amazon that treats its workers like trash. Communities need to be self-reliant instead of dependent on these impossible to maintain supply chains.
So many tropes, and so much whining – both left and right, but mostly left.
Whether Brexit was a good idea or not, there’s no point banging away on keyboards venting frustration. In the UK we live in a democracy and need to be big enough to acknowledge that decisions are made at the ballot box and thereafter honoured.
When we cast our votes, we are agreeing to be bound by the terms of the result. If anyone can’t subscribe to that basic principle, even when a result angers, irritates or otherwise offends their delicate sensibilities, then perhaps they would be better off moving to Russia, China or even North Korea.
The world changes, trade barriers rise and fall in line with the geopolitics in play. Deal with it! If a business model is not agile enough to cope, then perhaps the business model needs revision.
Of course, Brexit will bring various positives and negatives – as will start playing out over the coming years. Business models and sales channels will need to adapt – but that is fundemental to any sound business plan. Any business that simply relies on whatever status quo is in play being eternal is a business that needs to revise it’s model.
“Of course, Brexit will bring various positives”
We’ve been out since January – so now list the positives
“When we cast our votes, we are agreeing to be bound by the terms of the result”
In a non-binding advisory referendum?
Be honest. You’re a bit thick, aren’t you.
What a load of rubbish.
“We’ve been out since January – so now list the positives”
Full quote was… “as will start playing out over the coming years” So, we’ll all need to wait. Your strawman notwithstanding. Patience my impetuous little person, patience.
“In a non-binding advisory referendum?”
However it was made clear, binding or not, that the Government would implement the result of the referendum. If a voter cannot bind themselves to basic democratic principle, then perhaps they should refrain from voting, and if they refrain from voting, well… Then perhaps they should simply sit in the corner and be quiet.
Your comment is cheap and somewhat flippant. Please justify your position.
Geo-politics is awlays in play. Business has had 4 years to prepare. That is more than enough time to adapt to the impending change.
My business has opened up sales channels outside of the EU over the past 4 years. It’s cost considerable time, effort and money, has taken my scope beyonf Amazon and Fleabay, but it is startring to pay dividends. I haven’t sat on my behind lamemting the changes, and I don’t simply take all profits as remuneration. I invest in my business.
I wasn’t particularly happy about the result of the referendum, but I’m a realist, not a whiner. My business adapted well ahead of time, and is, as a result, more profitable and will continue to sell into the EU after 31 January, as well as sell into other markets.
If others have simply failed to plan and adapt, then well, no sympath from me.
“My business has opened up sales channels outside of the EU over the past 4 years.”
Your triple lock pension isn’t a business, Brexshitter
Now go back to Spoons
“Your triple lock pension isn’t a business, Brexshitter Now go back to Spoons”
Lol. Fortunately, when I retire I’ll be in a position where my state pension will be donated to charity, so triple lok or no-lock, it matters little to me.
But really? Ad hominems? The last resort of scoundrels… I guess you are here to provide a little comedy value. You certainly made me laugh.
If the fact that I have diversified, hedged and implemented channels that will hopefully act as a stop-loss by ofsetting somehow offends you, or leaves you with nothing of value to say, then I assume that you don’t run a business of any value.
Enjoy your cognative bias!
Most people will be worse off. It’s obvious that some businesses will have taken action and they will likely benefit from that. It’s not out of order to think about people who will suffer because of their own idiocy, though. I assume it’s possible just to shut down UK sales.
Strictly speaking the negotiations between the EU and UK are not done yet, but there are a lot of tricky issues to deal with, not least in IT, should the UK leave the Single Market, as is likely, and a company like Amazon can’t afford to improvise the day before the UK leaves the SM. One aspect of this is giving sufficient advance notice to sellers, which is very professional of then, as can be expected (unlike the total shambles of HMG, which will not be ready until six months’ later at best). That’s also why Amazon is not taking responsibility for customs clearance the way it does for some orders shipped from Amazon US to the UK. Given the total chaos that will likely unfold on January 1, 2021, it would be irresponsible of them to undertake commitments on matters beyond their control.
It is only a bombshell and surprise to someone who had their head in the sand for the last 4 years.
You make some very good points. Businesses should always be adapting and preparing.
I just have to look at the supporters of leave to know that they don’t have the best interests of everyone in the UK in mind.
One solution around this would be to register for VAT in one of the EU amazon marketplaces and use that marketplace such as Germany to fulfil your EU sales whilst running UK as as standalone marketplace. Downside is splitting inventory but I can’t see any other option. The next step is to understand which EU marketplace to choose based on taxes, import duties, FBA fees etc, get set up and get stock sent in before the 31st December deadline.
Brexit-the gift that keeps on taking.
This will affect a small number of businesses that find it harder to trade in the EU, but it will also benefit many businesses by reducing competition in what is a saturated market for most things because competitors from the EU will also find it more difficult to sell in the UK.
There will be winners and losers, but overall, the net effect will probably be zero.
It probably wasn’t logical that a UK seller would sell an item to somebody in the EU and an EU seller would sell the same item to somebody in the UK.
It depends on what you sell at the end of the day and what you sell it for. The UK is a bit of a basket case, dominated by Chinese sellers and domestic sellers are selling at almost cost to move stock and a historically weak currency.
Does anyone know if products be shipped into/stored in Southern Ireland to be distributed across the FBA network or does it have to be a location in mainland Europe?
Amazon doesn’t have any warehousing over here so it will have to be on the continent.
Thanks John 🙂
great news for mainland europe, cheap UK stuff s banned 🙂
So if we do what Amazon suggests; split our stock into European mainland stock and UK stock and send to two Amazon FBA warehouse – one in the UK for selling to UK customers and another on the continent for selling to mainland Europe..
If we send our stock then to a German FBA warehouse lets say, then Germany essentially becomes our target market place for EU so Germany, France, Italy and Spain.
But how will it work with the packaging?
I thought if you have a different marketplace than UK in Europe, then the packaging of the product has to be translated into that country’s language.
Anyone know if this is right?
If so that will be weird for the French, Italians and Spanish cause whilst some in those countries will definitely understand English I think that there is going to be a very small percentage that knows German.
How is one suppose to work around this? Anyone knows?
I wouldn’t think packaging is an issue. AFAIK, Amazon send stuff from all over to all over – if it’s not in stock in (eg) Germany they’ll fulfill from (eg) France.
So long as the address is correct, it will be delivered.
Such things as warnings on packaging (ie, for batteries) are internationally symbolised and multi-lingual anyway
If you mean internal packaging – I can’t remember the last time I bought anything in mainland Europe that didn’t have descriptive translations from every country under the sun on it, and in it’s instructions.
Hi @Skaramouche, I mean the product packaging.
Was told by a support rep at Amazon Germany that if you send stock there it it becomes your target market place then the packaging has to be in German.
This is what seems strange to me that one can’t keep it in English because Italians, French and Spanish are not likely to understand a word of the German packaging.
Find it all very confusing.. 🙂
“Find it all very confusing.. 🙂”
Brexit: Monkeys got to vote on whether they could fling shit. Surprise outcome…
Re packaging – perhaps check out for instance a windscreen wiper for a car ?
Type / Code – states which cars fitted
Product description in umpteen different languages.
Although I have to say, with so much English spoken on the Continent, cant see a huge issue for the end user – plus as long as you state somewhere “packaging & documentation in English” – I cant see you getting any comebacks?
I think it’s just going to be one of the many “suck it and see” scenarios …
Perhaps Amazon will set up a forwarding/shipping company in the UK or at least partner with one contractually and exclusively whereby the UK seller still sends stock to an Amazon UK fulfillment centre and then Amazon technology will split the stock at that fulfillment centre and disperse to the shipping company who will then send bulk consignments to an Amazon EU fulfilment centre.
Yes they will need the relevant data for customs but Amazon can get this from sellers at an ASIN level.
Yes there will be lots of paperwork etc but that is what shipping companies specialise in.
I can’t see Amazon walking away from PAN EU considering the investment they have put in and Brexit was on the cards when they started PAN EU so I would assume they have some sort of future plan for 2021 and beyond.
Theyd only do that kinda of thing for thier best pals.