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How Amazon UK and EU FBA inventory pools will function from 1st Jan 2021
The UK is due to formally leave the EU’s Single Market and Customs Union from the 1st of January 2021. While UK-EU negotiations are ongoing (including determining what tariffs, if any, will apply), from the 1st of January 2021 there will be a customs border between the UK and EU which will have an impact on businesses working across this border and that includes your Amazon UK and EU FBA inventory pools.
From the 1st of January 2021, Amazon will cease moving inventory across the UK/EU border. This means for some, make sure you have sufficient inventory in EU FCs to cover any period where you may find it difficult to replenish stock until any new customs and shipping arrangements become clear. For others it will mean depleting inventory in mainland Europe FCs before the 1st of January 2021 as after then it will become more difficult to repatriate your stock back to the UK.
Good news – You can continue using the same FBA SKU for your UK and EU listing, however your FBA inventory pools will be split to reflect the different quantities in each. For a listing to be active (i.e. in stock) in UK, it must have stock in a UK FC and vice versa for EU.
For example, if you send 60 units to a UK FC and 40 to a German FC, then you will two FBA inventory pools – You’ll have 60 units available on your UK offers and 40 will become available for any of the EU marketplaces (provided you have enabled EFN or Pan-EU in EU4). Amazon will be sharing more specific information and timelines over the coming months.
As Amazon will not be moving items across the customs border, you will be unable to create removal orders for inventory in Germany, France, Italy, Spain, Poland or the Czech Republic to be returned to a UK address (and vice-versa). To have inventory returned, you will have following restrictions while creating a removal order:
- Input valid UK address to remove inventory from UK FCs
- Input valid EU (excluding UK) address to remove inventory from German, France, Italian, Spainish, Polish or Czech FCs.
To have inventory returned, you will need to create a removal order to an address that is local to where the inventory is stored. You can then arrange for a courier to collect your inventory from that address and ship these items back across the border.
If you have auto-removals enabled, these returns will only be processed if your auto-removal address is local to where the inventory is stored.
To keep up to date on Amazon news regarding the UK’s final parting from the EU, visit their Prepare your Amazon Business for Brexit Help page.
Amazon have been REALLY pushing Pan EU lately Chris. They are using scare tactics (you wont be able to sell in the EU without it).
There are many balls in the air ATM.
Do you sell into the EU via MFN only?
Do you go Pan EU if always been under the distance selling thresholds?
Is Pan EU cost effective?
Do you trust Amazon’s VAT filing?
Lastly, is it not better to wait until next July (see below link):
At this stage you can send stock into one EU country and have 1 EU VAT number. Then Pan EU as it stands today would be redundant. In theory Amazon should pool your EU stock across the EU FC’s. I guess they know that…..hence the pushing of Pan EU now.
According to the below note on the link you provided, this suggests anyone using Pan-EU will still need to register in all countries where stock is located, so OSS will not help there:
“NOTE: Sellers holding stock in other EU countries will not benefit from the OSS single return simplification. They must remain VAT registered in each country where they are holding stock. This includes selling using the Amazon FBA program.”
Pretty sure the EU is making changes soon
Surely it makes sense to wait until all the liability for VAT is dumped on market places and then save a fortune and load of time in accounting fees and filing hassle.
Pan EU FBA is just not worth the hassle for me as a relatively small seller in Europe. Amazon has been trying for years to get me enrolled on it, but all the hoops there are to jump through (having to register in Poland and Czech republic as well as DE, IT, ES and FR, especially ES which seems the biggest hassle) means I will probably not bother. I watched Amazons webinar the other day on merchant sales to Europe, will see if the FBA webinar in October holds out any hope!
Also as a seller of items mainly in the £15-£20 bracket, the extra costs of import/export duties and the fact Amazon won’t return anything from Euro Fulfillment centres is a downer. And how on earth is it viable to set up somewhere local in say Germany to have items returned to?
If you look at the solutions providers there are services you can use to bundle returns and forward them to you.
But you are right when you consider.
1) Outbound costs to FBA / EU
2) Orignal postal Fees from FBA to consumer
3) The number of Returns without faults and label cost pushed to the seller.
4) Removal and shipping fees for returned stocks from FBA (including cross border fees within the EU)
5) Receiving Fees to be paid to a third party to receive and repack the goods.
6) Shipping fees back to the seller.
7) Relisting, repacking, and reposting fees to resell the stock.
Youll have probably spent over £15 £20 in postage and fees already.
Honestly, if there was an option to simply let the customer keep the item every time, We would be better off going for that, and save the fees to return to FBA which will result in a ‘Dispose of’ action at then even more fees.
Does anyone know if this is an option?
It will be bad enough on any returns where the goods have got damaged in transit etc but when the customer has simply changed their mind or doesn’t like it, which does happen a fair bit, that will be a nightmare. Amazon were saying on the webinar that you will need to send them an international fully paid label, pay the neccessary duties, and if it was a no fault return “negotiate” with the buyer about them covering some of the costs. Yeah right.
the second option Amazon were pushing was “returnless refunds” where you just give in, let the customer keep the item whatever the reason for them not wanting it is, and give them a full refund.
id personally take the “returnless refunds” over everything as this will lead too
1) Highly likely Less negative or bad reviews.
2) Even a possible good review
3) Fewer fees, as you are paying FBA return fee, and disposal fee, plus and rehandling fee at amazon warehouse.
But yes, as you have stated, we also get many returns where the item appears to be brand new, unused, unopened and also in some cases, accessories have been removed and kept, with the main body returned. Reason for return likely too small, big etc from not reading the description. I think this is quite common for all third party sellers on Amazon who have no incentive to make it not so.
Amazon keeps the customer happy, gains more fees, and creates parcel volume enabling them to gain better contracts.
But even as it stands now today when you look at the fees, it’s barely worth receiving these items back and reselling, but it gives you the satisfaction that the buyer didnt get your item for nothing. But after the Brexit changes, it would be for sure better to let them simply the item in my opinion.
Overall for the last few months, Ive been making changes to my own businesses downscaling and getting ready to basically exit the marketplace. Sure my Amazon IPI has gone down by over 100 points, but at the same time, i no longer care.
‘But yes, as you have stated, we also get many returns where the item appears to be brand new, unused, unopened and also in some cases’
Should off made clear ‘BUT RETURNED AS FAULTY’
An option to simply let the customer keep the item or offer FREE RETURNS ON ALL ITEMS, may also work, as those goods then may not be returned as faulty saving the fees of FBA Removal.
But Removal back to the UK simply won’t work for many sellers.
Virtually all my Euro sales at the moment are done through FBA, all stock held in UK centres and shipped by Amazon from there when sold.
Unless I am wrong, to go Pan European entailed having to open VAT accounts in all 6 countries, having to submit translated and signed by a notary affadavit for Poland, and for Spain having to visit the nearest Spanish embassy in person (200 miles away from me) and open a bank account in Spain. As my sales to Spain are approx £2k a year just not worth it. Germany biggest market by far, but still well under VAT thresholld there.
Does anyone know what Ebays stance is yet? Currently we just send any items to their International centre in Derby and they take care of everything else, though I am sure that will have to change.
I doubt Ebay’s global shipping programme will change, but taxes could be added after brexit resulting in higher costs for your customer, making you less competive.
I had a small parcel from China recently valued at $25 and the FedEx fee to enter customs on it was £20 plus VAT. Plus duty and VAT on the customs value. Such fees would make most UK goods simply not worth purchasing for most European citizens.
But It all depends on the ‘Oven ready’
I think the question to ask now, at this time is
‘Can my business survive based on domestic sales alone, as the market stands now’
Not introducing unicorns, and Brexit nonsense, because you cant make decisions around those realistically.
For me, the case is yes, it can survive but fundamentally it wouldn’t be worth my time and it would risk the nest egg I’ve acquired over the years, the risks outweigh the rewards, there are alot of Chinese sellers that make it simply to hard for me in relation to the goods I sell.
This is why I’ve been asset striping for months already.
@Rob, the visit to a Spanish embassy is no longer required. I had to order a few certified copies of the certificate of incorporation with some additional info included, and had to get a local notary to notarise a document.
Nevertheless I started the process in May/June and still waiting for France and Spain to issue VAT numbers while I have been submitting zero returns for the others for a while now. Once they all arrive, I’ll give it a go but not sure about after the end of the year. Sending a pallet to Germany is 3-4 times more expensive than to a UK FC. I expect this to wipe out the small margins we get on our products.
Amazon’s LTL partner UPS only provides approx £5 discount on our current pallet rates to UK FCs but they require the height of the pallet and weight to be declared before we’re able to download labels and build the pallet, which is back-to-front – so I’ve not tried them, but I wonder if they will be any better for sending into the EU.
You can do single boxes I think they are around £15 a go. Still alot more than the £3.50 or so as before, but maybe an option and saves pallet cost. Although if customs entry is required later this could get expensive on a per box basis.
I’m liquidating stocks atm sadly because pretty much all of our quality sales come from the EU.