In March 2022, fulfilment between the UK and EU is set to reopen via the European Fulfilment Network (EFN). The EFN enables brands that sell on Amazon Europe marketplaces to stock inventory in their local fulfilment centres to send to customers ordering on multiple Amazon EU stores. This means that supplies can be located nearer to customers and businesses can maximise control over their inventory.
The EFN enables sellers with an established Amazon EU account who are also already registered for Fulfilment by Amazon (FBA) to store inventory in one of Amazon’s local fulfilment centres. By doing so, sellers can fulfil orders from across Amazon’s EU marketplaces from a single inventory pool.
Using the EFN can streamline inventory management, keeping goods local and enabling you to have control over your stock. Amazon enables FBA inventory to be listed across all EU Amazon stores using just one account. Orders would then be fulfilled from this FBA inventory and using the European Fulfilment Network.
To use EFN, you must meet a few requirements:
Using Amazon FBA will automatically make EFN available to you in all of Amazon’s EU marketplaces, so a separate registration will not be necessary.
There are a few key details to be aware of first:
One of the key benefits of opting into EFN is that you can effectively sell your inventory across Europe from a single store. This can be useful for businesses that do not have space to hold stock at home and need to use a fulfilment warehouse but don’t want to ship their supplies cross-border. This also means that a single VAT registration would be needed, as you are storing stock in one EU member state.
As revenue generated in the ecommerce market within the EU is projected to reach 828.3 million this year and is expected to show an annual growth rate of 13.83%, EFN could be an excellent means of accessing new customers and boosting your budding brand’s exposure, while keeping the administrative burden low.
In 2021 Amazon introduced increased fees for their EFN service which has been viewed as a disadvantage for smaller businesses looking to expand throughout the EU. This, however, may not apply to you as EFN has no fixed fee. This will entirely depend on the storage location, type of product and the size and weight of your inventory.
If you have a medium to large-scale Amazon business, however, meaning more sales from customers scattered across Europe, you may want to consider Pan-EU FBA. Pan-EU FBA is Amazon’s largest scale fulfilment network, enabling sellers to list on 4 Amazon marketplaces and store inventory across the EU.
Amazon’s Pan-EU FBA service does make VAT registrations in each country where your stock is held compulsory, so this will be a requirement when using this service. At SimplyVAT, we understand that expanding across Amazon’s European network can be daunting, and adding multiple VAT registrations to the equation can be a challenge.
If you have any questions and Amazon EFN or FBA, don’t hesitate to get in touch with our team, and we can discuss your expansion plans and the compliance requirements that may apply to you.
Amazon have given the following guidance for EFN sellers:
For B2C sellers using EFN, any sales that do not exceed EUR 150 or £135 will be accounted for by the marketplace (Amazon) and will not require you to register for VAT. This fee will be collected by Amazon from the customer at checkout.
For B2C sales made above EUR 150 or £135, or all B2B sales, the customer will be expected to be the importer of record and will pay any import VAT and duties required. The customer will be able to see an estimate of this amount at checkout.
EFN VAT rules are highly changeable, dependent on your goods and their location at the point of sale. To ensure you’re staying compliant while using this service, get in touch with a member of our team who can discuss your VAT requirements.
