Ever considered leveraging your Amazon FBA enterprise by branching out into the European market?
The allure of journeying across the Atlantic is a shared aspiration among both Europeans and Americans. Yet, beyond the allure of travel, an intriguing narrative of shared history and vibrant commerce unfolds.
A Peek into Amazon's European Adventure
Amazon's intriguing journey into Europe's marketplace began in 1998 with its first international foothold in the UK, followed by Germany later that year and France in 2000.
Fast forward two decades, and the situation spells out one compelling reality: POTENTIAL.
Amazon's presence in Europe has expanded continuously, gaining traction in emerging markets like the Netherlands and Sweden. The most successful so far are the UK and Germany, followed by France, Spain, and Italy.
Diving into the European marketplaces today is as simple as setting up a selling account for Europe.
A Guided Tour: Amazon Europe
The convenience of managing all your marketplaces from one account is appealing, and getting started is straightforward. You need to submit an application to sell, provide necessary documentation, and await approval.
However, embracing the challenge of expansion comes with its unique hurdles, with Value Added Tax (VAT) standing out as a significant consideration. The EU marketplaces all incorporate an additional tax, VAT, which varies across countries.
A comprehensive understanding of VAT is essential since this needs to be collected and paid in the country hosting your FBA, regardless of the countries you sell in. To ensure smooth operations, you may need to engage services that can download reports, compute the necessary amounts, and notify you about the payable amount.
However, understanding the nuances of European taxation requires careful attention, and failing to meet VAT obligations can lead to severe complications. The process can be quite intricate, with each European country having its unique rules. Thus, thorough due diligence is necessary before venturing into the EU market.
Lessons from the Field
You may wonder why a product that sells for $25 in the US only goes for 10-15 GBP in the UK. The answer lies in taxes. Many sellers have found ways to evade customs and VAT payments, providing them a significant price advantage.
This revelation should not discourage you; instead, it should prompt you to leverage your knowledge of selling on Amazon.com. With your experience in keyword research, listing optimization, and PPC, you can still outmaneuver the competition.
Hidden Opportunities in Amazon Europe
Although the German market might seem daunting due to language barriers, it is, in fact, a treasure trove of potential. German consumers value quality and online shopping, and with a solid product, compelling visuals, and excellent customer service, you can carve out a robust customer base. Remember, Germany is the most populated and affluent marketplace in Europe.
Selling on Amazon Europe: Navigating the Ranking Landscape
Just as in the US, ranking in Europe is crucial but presents unique nuances. Targeting specific, relevant keywords is often more important than chasing those with high search volumes. And unlike the US, reviews in Europe don’t carry as much weight, allowing you to succeed with minimal reviews.
A Glimpse into PPC in Europe
For those who understand and love PPC, the European market can offer rewarding surprises. The competition isn't as fierce, making it much easier to achieve excellent results with advertising.
In conclusion, be mindful of cultural and linguistic differences when setting up your listing. It can make a significant impact on your product's indexing and sales performance.
The Road Ahead
Starting from July 1st, 2021, all products entering the EU will be subject to customs inspections and will incur customs duties and VAT, regardless of their value. This has resulted in an extended time frame for delivery. This significant change should not deter you but rather make you prepared for the intricacies of the EU market.
Here are a few strategies for effectively managing these changes:
- Collaborate with Experts: Consult with tax experts to understand how to navigate VAT payments and customs duties. Proper planning can help you avoid unnecessary costs.
- Use FBA: Amazon's Fulfillment by Amazon (FBA) service can handle a lot of the logistics of selling in Europe for you, including storing your products in their European warehouses, handling shipments, returns, and customer service. You just have to make sure your products get to Amazon's fulfillment centers.
- Marketplace Specific Optimization: Optimize your listings separately for each marketplace. While you can certainly translate your English listing for other markets, it's better to use a native speaker who can help incorporate localized keywords and cultural nuances.
- Understand the Market: Research and understand the market you're entering. Different countries have different demands and trends. A product that sells well in the US might not have the same appeal in France or Germany.
- PPC Strategy: Take advantage of the less fierce PPC competition in Europe compared to the US. This could be an excellent opportunity to expand your reach and rank higher.
- Diversify your Portfolio: Not all products may be suitable or allowed for the EU marketplace. Therefore, be prepared to diversify your product portfolio for Europe.
- Customer Service: Make sure your customer service is top-notch and can handle inquiries in different languages. Providing excellent customer service can help you stand out from the competition and build a loyal customer base.
To wrap up, venturing into Amazon Europe might appear to be a daunting endeavor at first. However, by familiarizing yourself with the unique market dynamics, understanding the nuances of European taxation, and leveraging your existing experience, you can significantly enhance your business potential.
Remember, every journey starts with a single step, and the world of e-commerce is no different. It's all about understanding the landscape, learning the rules, and employing effective strategies. Just as your venture into Amazon US was a learning process, so will be your expedition into Amazon Europe. So why wait? Embark on your European adventure today!