In this post, we will talk about the main differences, advantages and disadvantages between selling on Amazon US and selling on Amazon Europe.
Changes take first place in the US and then in Europe.
Usually any changes made by Amazon are first made in the US, so you can “foresee the future” of the European marketplaces by taking a close look at how the US marketplace platform is changing.
The new rule regarding the “incentivized reviews” which had quite a significant impact on sellers and buyers for example was first established in the US and a few weeks later in Europe.
Due to the differences in culture and mentality between US and EU customers, the sales copy must be adjusted appropriately.
Comparing Germany and the US for example, customers from the US usually prefer a listing which appeals and which has a story and the other way round, customers in Germany want to see a specification.
It is recommended that a native speaker translates and optimizes the listing in each country to adjust it accordingly to the native Amazon marketplace and country.
If you send inventory to the US, Amazon will distribute your products across different States, where it has warehouse located, (without your consent), making you liable for Sales Tax, as having inventory in a state is considered having a Nexus in that state, which makes you liable for collecting and paying Sales Tax in that state.
In the EU, however, you have the option to choose between EFN (European Fulfillment Network) and PAN-European FBA. EFN means, that you can send inventory to one of the five EU Amazon countries and list your products on each marketplace. Amazon will then fulfill your products from the country where your inventory is located.
PAN-European FBA is very similar (but not the same) as in the US. You send inventory to one EU Amazon country and Amazon will distribute your inventory to all FBA warehouses in Europe, including Poland and the Czech Republic. This will automatically make you liable to collect and pay VAT in all countries where you have inventory stored.
Advantages of selling in Europe:
Reach over 700 million potential customers!
Amazon.de (Amazon Germany) is the second largest Amazon marketplace in the world, right after Amazon.com. Buyers can choose to view the site in 5 different languages, namely German, English, Dutch, Polish and Turkish. This means that there is a huge number of potential customers from the neighboring countries.
People from other German speaking countries (Switzerland and Austria) also frequently buy on Amazon.de.
The other European Amazon Countries are the UK (population 65 million), France (population 64 million), Italy (population 59 million), Spain (population 46 million).
Create Brand awareness
This is something you must focus on if you are selling your own private label products.
Brand recognition is crucial as the final goal for some private labelers is to be accepted to sell wholesale to large supermarket chains all over the word.
In the EU marketplaces there is (still) less competition then in the US. This is a huge advantage for sellers as they can usually charge higher prices for the same products they are selling in the US.
As there is less competition, it is easier to rank for keywords as well.
“5 times the work” in the EU
Each marketplace will have its own listing in its own language. This means reviews, seller feedback, keyword ranking, follow up emails and customer service in different languages as well.
Loosing on the conversion rates
If not done correctly, there might be a huge loss in conversion rates. Sellers have the possibility to have only one bank account to which they receive the payment from the UK and also from the other EU countries. This way, there will be a loss of 4% as Amazon charges to convert either the GBP from the UK to EUR or to convert the EUR from Germany, France, Italy and Spain to GBP.
Therefore, it is recommended to have a business bank account in the UK in GBP currency and an EUR account in one of the Eurozone countries mentioned above.
Since Chinese suppliers mostly ask to be paid in USD, there is a loss during the conversion from EUR or GBP. However, some suppliers, which work for big factories, are willing to accept payments in Euro or even GBP. It is also recommended to ask for the price in RMB (Chinese Yuan) in case the currency’s value drops too much.