According to the latest statistics, there are over 100 million Prime subscribers around the globe. This offers FBA online sellers a competitive advantage in growing their business. If you are operating your FBA business in the US and want to expand your presence in Europe, the Amazon Pan-European FBA Program is a good route to consider.
What is the Pan-European FBA?
Amazon’s PAN-EU allows sellers to grow their presence into European markets by storing their products in fulfillment centers across Europe.
As an FBA seller, the PAN-EU allows you to deliver orders at a reduced cost and in less time. It also makes you Prime eligible and be more visible to more shoppers in Europe.
Which countries does the Pan-European FBA apply to?
The Amazon PAN-EU fulfillment centers are currently located in the following countries?
- Czech Republic
- United Kingdom
What are the Pan-European FBA requirements?
If you wish to participate in the PAN-EU FBA program, it is important that you know the requirements. One of the many rules is that you will be holding stock in another country. You will also be required to register for VAT in each country. You will then file and submit VAT returns according to the frequency of each country.
VAT, or Value Added Tax, is a tax that VAT-registered sellers add to the price of the goods they sell and pass on to the national tax authorities when filing their tax returns.
As soon as your items are moved into each country, you become liable. This means that you create a taxable supply once the movement of your items begins.
That said, you have to prepare well in advance. Don’t wait until your goods start moving. Mainly because VAT registration in multiple countries can be tedious and time-consuming. The process can take up to 3 months. Another reason is that Amazon doesn’t handle the process to make you VAT compliant – it is your sole duty.
What happens if you don’t register for VAT?
If you are still not registered for VAT and your items are already moving, you may face any or all of these consequences:
- Suspension of your Amazon account.
- You may face an Audit by a tax authority.
- You may be fined and charged with backdated fees which could cost your FBA business.
Once you’re VAT compliant, you can already start creating ASIN’s for all your items. Make sure that you consider the cost of compliance in your margins. This is because moving your stock into a different country involves complying with that country’s specific VAT rate.
What are the advantages of becoming a Pan-European FBA seller?
Effortless inventory management: Amazon ships your items to their warehouses in Europe. As a result, you can meet customer demand even if you are in the US.
Lower FBA fees: Amazon doesn’t charge any additional cost when shipping your items to their fulfillment centers in Europe. You avoid cross-border fees and only need to pay for local fulfillment expenses.
Access to European customers: With PAN-EU FBA, you are eligible to sell your items across the different European countries with full Prime eligibility.
Fast and reliable deliveries: You can rest easy that your items are stored close to your European customers, fulfilling their orders quickly.
Local customer service: Joining PAN-EU FBA means taking advantage of their local customer service in the local European languages.
The Amazon Pan-European FBA program is a great option to consider if you’re looking to expand to Europe and grow your business in new markets. As with any new marketplace, it’s necessary to do your due diligence and research. Most importantly, before you dive in, make sure you understand the tax implications from the onset to avoid any costly mistakes down the road.