Currently, Amazon allows UK-based sellers to ship to the EU from Britain’s fulfilment centres. But Amazon has created more complications for shipping to the EU, as it will force British sellers to send goods to EU-based fulfilment centres after Britain leaves the trading bloc on December 31. If UK sellers using Amazon’s fulfilment programme refuse to ship to the EU centres, they could lose all European sales.
Amazon has explained that the UK snub is because Britain will no longer be part of it’s European Fulfilment Network, and unable to access it’s Pan-European Fulfilment by Amazon service.
The EFN allows stock to be held in British Amazon centres and sold across Europe without international shipping costs.
The Pan-European FBA also means that UK companies only pay local shipping costs, with Amazon the handling extra costs and logistics for the stock’s transport across Europe.
Removal of the EFN and Pan-European FBA means British Amazon retailers have their potential customers slashed from 446 million EU consumers to just 66 million Britons.
Amazon will snub Brexit Britain from using it’s EU fulfilment centres
The new rules have created huge headaches for British retailers, who now effectively need to split stock between EU and UK fulfilment centres.
Ashley Cooke, an Amazon specialist at Clickthrough Marketing, told the Daily Update that this would be an expensive process as sellers would need to make sure there is “sufficient demand across the continent before you commit to sending a large amount of inventory over”.
He added: “The cost of doing so is going to be higher than it currently is in the UK. It will still be less than shipping FBA products to each country individually.
“But, to avoid long term storage fees, sellers will need to make sure that they know what their sales velocity looks like.”
In another blow to British retailers, courier service ParcelHero has said that Amazon may stop UK shipments to EU centres before the Christmas holidays.
ParcelHero has said that this would be to minimise a build-up of stock that would need to be returned by the new year.
David Jinks, ParcelHero’s Head of Consumer Research, said that while a trade deal between the EU and UK might help avoid “a nightmare before Christmas”, Amazon needs to prepare for it’s “worst-case scenario” of separate EU and UK sales.
He said to trade site Post and Parcel: “The fees for EFN sellers are quite steep, but the advantage is that it presents an easy way to sell into the EU without needing VAT numbers and minus the red tape in other countries.
“Our worry is that the end of this service just six days after Christmas is bound to create a nightmare before Christmas, as Amazon starts to repatriate UK sellers’ stock.”
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Mr Jinks added that the Pan-European FBA service situation is “equally complex”, with minimised costs of shipping at risk of disappearing.
He said: “From January 1, UK Pan-European sellers will have to send stock to an Amazon warehouse in Europe at their own cost.
“Once it has reached an EU Fulfilment Centre in, say, France or Germany, it would then be distributed by Amazon to other European warehouses as is currently the norm.
For sellers, this means splitting stock and potentially increased transport and storage costs.
“It also means they are forced to deal with VAT in different EU countries.
“What happens to returns after January 1 is a looming problem.”