Reaching millions of new customers across Europe through Amazon can take your business to the next level. But shipping to Europe is quite different from shipping within Japan. This page will give you advice and show the steps involved. This will help you avoid unpleasant surprises, such as extra shipping costs and delayed delivery times, and having inventory held up by customs.
Difference with Japan
You might be asking: “If I am using the Fulfillment by Amazon program in Japan, what happens when shipping to Europe?”
Inventory from fulfillment centers in Japan cannot be used to fill order from Europe. To sell on Amazon Europe, you need to ship inventory to Europe yourself, whether you are self-fulfilling or using Fulfillment by Amazon.
The cost of shipping, in time and resources
In general, shipping to Europe from Japan, China, or other countries will take longer and be more expensive than shipping within Japan. Also, shipping costs and the time of delivery varies greatly depending on the shipping method (such as whether it is by air or by sea) and weight.
Given the complexity of international shipping, most sellers hire a freight forwarder to handle all the details, including door-to-door transportation, customs compliance, and insurance.
But don’t just hire anyone. To avoid future problems, you need to choose your overseas shipping partner carefully.
When shipping to Europe, it is essential to hire a shipping partner who is familiar with your specific needs and with Amazon requirements. Amazon Global Selling can introduce several service providers who are capable of handling international shipping for Japanese sellers. If you are not sure which carrier to use, you can also ask your Amazon Global Selling representative.
Understand your shipping considerations and options, including FBA vs. MFN
Note these key considerations and requirements:
Which countries you plan to sell in, and therefore ship to
How you plan to fulfill: Fulfillment by Amazon (FBA) vs. Merchant Fulfilled Network (MFN)
Taxes and duties. Taxes and duties, including Deliver Duty Paid (DDP) vs. Deliver Duty Unpaid (DDU)
Customer expectations about shipping and returns
As with shipping in Japan, you first need to decide whether to ship directly yourself, use FBA, or do both.
Benefits of FBA: FBA is ideal when you start selling in Europe. If you use FBA, Amazon will handle customer service as well as deliveries and returns in local languages, which can be especially difficult when starting cross-border EC, so that you can start selling at low costs without worrying about time differences, and you can expect a high level of satisfaction from customers.
There are some unique costs to consider if you decide to use FBA in Europe.
If you ship to Europe, items may be subject to Import Value Added Tax (VAT) upon arrival. For example, import VAT in the UK is currently 20%.
Check out European FBA options for international sellers, and learn more about European FBA fees.
Advantages of self-fulfillment: For some sellers, fulfilling European orders themselves may make sense, while some sellers use both FBA and the Merchant Fulfilled Network (MFN).
Some sellers use MFN so they can understand which products are selling well. This is a good option when delivery speed is not an issue.
Another advantage of sellers shipping directly to Europe is that they don't have to stock inventory in that country. In this case, there is no need to pay import VAT. (However, this can differ according the sales amount and conditions, so please consult an external tax advisor for details. Here is a list of service providers who can support VAT.)
When considering MFN, you also need to confirm the cost of international transport and the time it will take for delivery.
When considering MFN for shipment to Europe, you have to think about what local consumers expect. You need to provide accurate shipping times. You should also make sure to handle additional duties and taxes on your products in order to avoid exposing your customers to delays. This can impact your reviews and ratings.
Understand the requirements, including import and export regulations
Regardless of which fulfillment method you choose, shipping to Europe involves certain requirements. Two of the most important ones are providing an importer of record (IOR) and using delivery duty paid (DDP). This is mainly related to who pays import taxes.
You must use an IOR (importer of record) to sell in Europe. The IOR is the entity responsible for paying import duties and taxes, ensuring that your imports comply with local laws and regulations. You cannot specify Amazon or a fulfillment center as the IOR for FBA shipments.
Sellers who do not have a local address may accidentally set Amazon as the IOR. Any shipments arriving at an Amazon fulfillment center with customs duty charges due will be returned to sender. To avoid problems, make sure the IOR is entered correctly. Usually the seller is the IOR.
Why DDP is important: Another requirement related to tariffs is to use DDP and not DDU (Delivery Duty Unpaid). With DDP, the seller is basically responsible for duties, taxes, and other upfront charges, so customers do not need to pay any additional fees at the time of delivery.
Amazon requires that the amount indicated and the amount paid by the customer be the same. This means you cannot charge any additional fees to the customer. In other words, you cannot use DDU.
For FBA shipments, DDP must be used. Always make sure customers don’t have to pay any additional charges.
Shop for the best shipping rates
Depending on the business type, a shipping advantage can be a major factor in achieving success in the European market.
It takes years to build trust with carriers through many transactions in order to gain preferential rates. In most cases, you can send a batch of shipments to a shipping company with whom you already have a deal so that you can ship at a much cheaper rate.
The solution provider network is also a useful tool for comparing shipping companies. We’re often able to get discounts and promotional rates, so it’s worth checking regularly.
Common mistakes to avoid
Mistakes are often made related to the additional requirements for shipping to Europe.
Be sure to carefully check your first shipment to Europe. It’s a terrible experience for sellers and customers when you go to all the trouble of prepping and organizing your shipment, only for it to get held up at customs or to be considered undeliverable.
Not getting EORI and VAT registration started right away
As with other government forms, European shipping paperwork takes time. Importing to Europe requires an EORI (Economic Operators Registration and Identification) number and VAT registration.
When you first start planning your shipment to Europe, immediately apply for an EORI and VAT registration.
If your FBA inventory is shipped using DDU instead of DDP, Amazon will not accept your products.
All units shipped to Amazon fulfillment centers in Europe must use DDP.
With MFN, the cheaper DDU may be available, but you need to make sure that the customer is not charged tariffs. When self-fulfilling to Europe, talk to your shipping company and a VAT specialist about when DDU might be OK to use.
Ignoring or delaying your VAT registration
When shipping to a European fulfillment center, contact must be made in advance.
Plan your shipment ahead of time with your carrier to avoid refusal of your inbound shipment.
Make sure you’re allowed to ship the product to Europe
You may suddenly face restrictions on products you were planning to send to Europe.
Just because you are able to list your products in the Amazon European marketplace does not guarantee that you will be able to deliver your products to that region. Make sure you’re compliant with local regulations.
Shipping to Europe can seem daunting at first. But if you understand the requirements and available options, and are able to make a contract with a trusted shipping company at a good rate, you will be able to reach tens of millions of new customers across Europe.