What You Need to Know Before Expanding Your Ecommerce Business Into the European Union – Payability
If you’ve scaled your Amazon or ecommerce business in the United States the next logical step may be to expand into Europe. However, the processes, laws and market provide sellers with an incredibly different climate. Here are our key thoughts on what you need to consider when expanding to the EU.
The first question is key, where will you be fulfilling your products from? There are a couple of options available to you and you need to make sure that you get the right option for you, maybe you already know based on what you have done elsewhere, here are our thoughts…
Two options, FBA or merchant fulfilled in the UK. Both have their pros and cons.
Prime delivery is critical for some products, if you require this, FBA is best. There are many warehouses also that you could use outside of FBA which provide equally good service and likely cheaper to use their services and can also provide a PRIME button for merchant fulfilled. This does require a minimum number of orders and also a time and satisfaction measure that Amazon tracks.
We would suggest initially starting with FBA, building your brand and then when you can start fulfilling by another third party, go for it. This works well if you have other sources of orders from a shopify store or similar.
Not everyone wants to send their products to Amazon, certainly if it has come straight from China. Having somewhere that can QC, change labels, long-term store the products is key to keep stock fresh in Amazon and not store for too long.
The other side of this is if you have an eBay, Shopify store, you may not want Amazon to store these too! Having a warehouse solution available should you require any additional help is a great way of ensuring your products are in the right place at the right time with people you can trust.
Depending on where your products are coming from they may require additional information before you can sell them in Amazon or other stores. I reckon this is covered with making sure you have a warehouse solution too! But having a provider that can do this for you as you may not be in the country is vital to getting your products where they need to be on time and ready to be sold.
Amazon Account Management
So, for many of our clients when expanding to the UK, they have already managed a successful US Store, some like to run, manage and look after their own stores, but some like to outsource the daily management to another provider, so they can answer questions in the same time zone, get the right stock in the right place, look after sponsored products etc.
Having a provider that can help you with this is a great option, so you can focus on developing new products and social media content or strategies to grow your business.
You have an amazing product, generating traffic through to your shop is key to increasing sales and building the social proof of your product. Many clients create valuable content and can deliver this is a well thought out and structured manner around specific projects and events on the calendar for each country.
The influencer model is currently a massive opportunity that many products can benefit from, it’s about getting the right ones! Who have you got?
VAT Regulations and Filing
In order to be compliant with EU law, you will need to be registered for VAT in each country you sell from. We recommend starting in the UK and exporting to the other EU countries, this is the best way to start. Once you are registered, you have a duty to the government of each country to file your VAT returns on a regular basis.
Here at Global E-comm Experts we can help you with all the above when you require it. For all of our sellers that we work with, each and every entrepreneur has something different they prefer to focus on, outsourcing certain areas to experts is a great way to release you to focus on growing the business.
We are happy to speak to you on the phone about the opportunities available to help you expand and be successful in the EU. Anything we can do to help, we will.
As a customer of Payability we can offer you a unique discount on our services for your EU expansion, quote PAYABILITY25 to get a great quote on our services, which includes a 50% discount on VAT registration.
We have also gone one step further and created a checklist to support your expansion to the UK!
- Research your products in the EU marketplaces
- Do a budget (to check profitability) around your products based on research prices, include;
- Shipping Costs from destination
- Import Duty (This varies from product to product)
- Import VAT (Can be reclaimed)
- Sales VAT (20% of the sale price)
- Advertising costs
- 3PL Services/Postage Costs or Amazon FBA fees
- Contact Global E-Commerce Experts (GEE) to register for VAT and EORI Numbers to sell in the UK (Prior to shipping)
- Register with GEE for HMRC Quarterly filing and compliance services as your agent. This will ensure a smooth operation and stress-free expansion with the UK Government relieving you of the pressure to deal with this and focus on what you do best
- Contact a shipping company to look into Shipping your products to the UK
- Decide on whether you will be going direct to FBA or to 3PL services
- Contact GEE for a competitive quote on your 3PL services
- Products going direct to FBA will need to be labelled
- Create your listings in the EU marketplaces – your amazon rep can support you with this
- Set up a Payability account to improve cashflow and stock availability when funds are limited
- Once your VAT and EORI number have been issued, ship your products to the UK
- You will need to pay the shipper for Shipping, Insurance, relevant taxes (Import duty and VAT).
- Develop social media awareness in the EU for your products, perhaps with a ‘coming soon’ message
- Start advertising through Amazon PPC and Social Media once the products arrive
- Start Selling your products!
- Receive money from Payability to expand quicker