Starting March 2022, Amazon have reintroduced the European Fulfilment Network between the UK and the EU, subject to European Fulfilment Network Fees. UK sellers now have a cost effective way of entering the EU market without incurring crazy VAT fees. Eligible offers will become live in phases until May 2022. The European Fulfilment Network allows FBA sellers with an EU account to store their inventory in local fulfilment centres and fulfil orders from other EU stores, maximising inventory control and flexibility. Requirements to sell between the UK and the EU using the European Fulfilment Network. Companies must have the following: Access to both the UK and the EU Seller Central accounts FBA offers for your products in both the UK and the EU Inventory for eligible offers stored in local fulfilment centres. Shipping programmes and export settings enabled. For EU to UK fulfilment, all EU stores must be enabled for export (Germany, Italy, France, Spain). If you have more than one EU account, each account must be managed separately.
In light of these relatively recent changes. We wanted to familiarise you with the European Fulfilment Network – if you are not already by exploring what it is and how it benefits ecommerce merchants selling on Amazon.
What is the European Fulfilment Network?
The EFN is a European extension of Amazon’s proprietary storage and shipping service, which allows sellers to outsource the supply chain process, including the receiving, picking, packing and shipping of products to Amazon. Crucially, the EFN extends this service across Europe, enabling FBA sellers to fulfil orders between UK and EU borders via Amazon’s infrastructure and logistical know-how. Sellers can once again access European markets (included are UK, Germany, France, Italy and Spain) through a single, centralised, and domestic Amazon fulfilment warehouse, as seen pre-Brexit.
The benefits
For many SMEs, the EFN is the most efficient and simplest form of trading with Europe via Amazon. Which comes with the following benefits:
- The ability to fulfil orders from multiple markets from a single inventory pool, giving you greater visibility and control. The outsourced and simplified process creates a golden opportunity to scale without replicating labour intensive administrative processes for each market.
- The option to list products on all European marketplaces with one VAT number and have Prime status ensured across all markets.
- The enrolment is automatic, providing you are using FBA in one European store, meaning transition is instant.
- The ability to create offers across all marketplaces using the same process as via your European account.
Overall, the EFN enables ambitious businesses to scale without the logistical complication.
What is the difference between the EFN and FBA by Amazon?
Fulfilment by Amazon (“FBA”) enables sellers to store inventory in an Amazon fulfilment centre from where orders can be fulfilled in that country. The EFN opens this up so that orders can be fulfilled from any Amazon European Fulfilment Network (FBA) location across the EU. Until recently this service was restricted to orders fulfilled within the EU, but now EU orders can be fulfilled from the UK.
Fulfilment by Amazon means that sellers can store their goods in Amazon’s fulfilment centres. When a sale is made, Amazon can then “pick, pack, ship, and provide customer service” for these orders.
The EFN means that sellers with an Amazon EU account who are already registered to use FBA can store inventory in one of Amazon’s local fulfilment centres. Sellers are then able to fulfil orders across EU marketplaces from one inventory pile.
Amazon then enables FBA inventory to be listed across all of its EU marketplaces from one single account. Any orders placed from these listings can then be fulfilled via the EFN.
Requirements of the EFN
To sell between the UK and the EU using EFN, you must have the following:
- Access to both the UK and EU Seller Central accounts
- FBA offers for your products in both the UK and the EU
- Inventory for eligible offers stored in local fulfilment centres
- Shipping programmes and export settings enabled. For EU to UK fulfilment, all EU stores must be enabled for export
- Each EU account (if you have more than one) must be managed separately.
How it works
Request enrolment for your eligible offers.
Starting March 2022, eligible international offers between the UK and EU will go live via the European Fulfilment Network. You will receive an email to confirm that your offer enrolment is complete.
Your Shipping programme and export settings may be automatically updated to enable cross-border fulfilment.
You can opt out at any time by deselecting countries from Enrol into EFN between the UK and the EU in your Cross-border fulfilment settings.
The rules around VAT for EFN users
Official guidance shared by Amazon around VAT for EFN users is as follows:
As a general rule, sellers aren’t obligated to register for VAT in the store destination when fulfilling between the UK and the EU.
For B2C sellers using EFN, any sales that aren’t over €150/£135 will be accounted for by Amazon, paid for by the customer in the sale transaction process. For any B2C sales over these respective amounts, the customer is required to become the importer of record and will need to pay any necessary import VAT and duties. An estimate of this amount will be shown to the customer during the checkout process. The same applies to all B2B sales.
It is fair to say that EFN VAT rules are not always hard and fast. Goalposts can shift at any time depending on external variables or factors relating directly to your goods and their sales locations. To ensure that you remain tax-compliant at all times, we would highly recommend seeking the support of a specialist ecommerce accountant.