What will sales to Amazon look like post-Brexit?
With all that in place, we had to decide what stock to send. Amazon had always made those decisions for us. Their analytics looked at our stock items. They had access to all the necessary data to move the required stock items to their other EU marketplaces. Amazon’s selling and storage fees are not cheap. Maintaining optimum stock levels in multiple countries is going to be challenging. One we are about to face.
With that done, we moved to the requirements of the shipping invoice. We quickly realised that sending stock from ‘yourself’ in the UK to ‘yourself’ in another EU country, was going to be different and slightly more complex because although it was going to Amazon, they are not the receiver or importer of the goods.
Bureaucratic challenges posed by Brexit
We asked our shipping company representative to look over the paperwork to ensure we had the correct EORI numbers and VAT numbers, and that the seller, shipper and receiver were correctly listed. Amazon takes no responsibility for the importation of the products, so this was vital. He then had to speak to a ‘Brexit expert’ as even for him; this was a first. He came back to me, and the conversation went along these lines:
“You need the address for the IOR” (importer of record), he informed us.
“We are both exporter and importer, so it is our address” was my reaction.
“No, you need a physical address in Germany.”
“But we have a legal tax representative in Germany, is that it?”
“No, your company needs a physical business address in Germany!”
Luckily, I have people I know in Germany. A friend pointed me in someone’s direction, and we manage to get an address. So today, after a week of back and forth, ensuring we had everything in place, our first shipment to Amazon EU left our premises. We now have to repeat the process for France, Italy, Spain.
Widespread difficulties for Amazon FBA seller
150,000 UK Amazon FBA sellers lost easy access to the European marketplace on 1 January 2021* and with that access to a potential 447 million EU customers. As you can tell by this article, it’s not impossible to sell your products FBA in the European marketplace after Brexit.
But as you can also tell, for the vast majority of sellers who used Amazon European Services pre-Brexit, the whole process becomes far too costly and complicated. We now have to consider more staff-hours, higher shipping costs, customs fees, and more accounting time due to more complex VAT submissions.
The sad reality is that all these additional costs will have to be passed on to the consumer, making products more expensive for the customer and the business less competitive.
Exporting to the EU, post-Brexit
I was not surprised by the Office for National Statistics report, that showed exports to the EU plunged by £5.6bn (40.7 percent) in January, with imports down 28.8 percent. It will take a significant amount of time and effort before we know whether replacing these sales will be cost-effective or even successful. I may even be counting my chickens before they have even hatched.
The stock hasn’t arrived in Germany yet, let alone been checked into Amazon’s distribution centre so there is still a lot that could go wrong. Let’s hope that isn’t ‘literally’ another story.
* There are 281,000 UK Amazon sellers in total – 57 percent of Amazon sellers are solely FBA sellers.