Zalando is one of the largest online fashion marketplaces in Europe, selling to over 45 million customers in as many as 23 EU (European Union) countries. Starting as an online shoe store in 2008, Zalando has transformed into a marketplace that offers both big and small brand names selling sportswear, accessories and cosmetics products, among others. If you have a fashion business and want to reach new customers, Zalando may be perfect for you.
Why sell with Zalando?
At the beginning of 2022, Zalando recorded a total of 1 million customers who subscribed to the Zalando Plus membership program, which is a sure sign of their customer bases’ loyalty. Statistics have also shown that their members visit the site twice as often and purchase 3x more compared to other marketplaces; Zalando’s ambitious plans and demonstrable popularity mean they are well able to offer your business the boost you’re looking for.
The German group is expecting 2022 to be an unpredictable year, but they still aim to reach double-digit revenue growth. David Schneider the co-CEO of Zalando has stated “Despite our exceptional growth trajectory, our total market share is now 3 per cent”. Now aiming to reach 10 percent of the EU market, the marketplace is setting impressive, yet seemingly manageable goals for the future.
Zalando’s model rivals that of other marketplaces, placing importance on brands offering desirable products at prices that aren’t set to compete with similar sellers. Unlike other marketplaces that sell anything and everything, Zalando only sells fashion products. This means their customers are much more likely to convert as it’s likely they’re looking for a specific product type within the industry.
How to sign up with Zalando
Interested in selling with Zalando? Here’s some more information about how to get set up –
There are three types of business model you can use to sell with Zalando:
- Wholesale: Zalando buys your stock to sell on the platform.
- Connected Retail: you integrate your stock to Zalando to sell through the platform.
- Partner Program: Zalando’s Partner Program follows a curated marketplace model, which allows you to directly apply your stock to Zalando and benefit from added fulfilment logistics and customer service features.
To join the Partner Program there are a few steps to follow:
2. Your application will be reviewed
3. You will be contacted to discuss requirements/what markets you intend on selling in
4. Then you can review the contract and sign
5. You will be walked through technical integration
VAT and Zalando
Like any business operating within the EU, the July 2021 VAT changes impacted Zalando, as well as the partners selling on their marketplace. These changes occurred in three principal areas which are useful to consider if you’re looking to integrate with Zalando.
Holding stock within the EU
If you hold stock within the EU and sell via Zalando to customer throughout Europe, you will trigger a VAT obligation in the country where your inventory is located. You will need to have a VAT registration at this location from first sale, as well as a VAT registration in each country where your customers are based unless you are established outside the EU. The OSS (One Stop Shop) Scheme can elevate the added administrative and financial burden this may cause, but we’ll discuss OSS in more detail below.
Deemed supplier and VAT returns
For Zalando partners based outside the EU, selling to EU customers, from stock held within the EU (warehouse/inventory store), Zalando will be considered the deemed supplier for cross-border EU sales and will handle collecting and charging VAT on your behalf. Note: This will only apply if your consignment value does not exceed EUR 150.
Shipping from EU and non-EU warehouses
Zalando has released that their business model does not support partners selling from non-EU warehouses to EU customers currently but is pointing sellers affected by this to their Platform Rules webpage.
Zalando does act as logistics partner to businesses using their platform, meaning you can store stock within their EU warehouses and sell to customers from there. This also offers brands a more sustainable means of selling cross-border, as Zalando can house inventory from several businesses in a single store, removing inefficiencies across the market.
The One Stop Shop (OSS) and Zalando
Businesses selling through Zalando’s Partner Program can reduce the amount of VAT registrations they need across the EU by using The One Stop Shop. Since July 2021, sellers must charge VAT based on where their customers are based, regardless of turnover. This is in addition to VAT registration in the location where their stock is held.
Although OSS is an optional scheme, it can streamline your VAT processes, as you will only have to register in a single EU Member State and report all your cross-border sales through their online OSS portal. For more guidance on OSS and your potential VAT requirements, get in touch with a member of our VAT team who can help – Arrange a call today.
Get your Zalando store VAT compliant today
At SimplyVAT.com we’re always here to support sellers as they expand. Zalando is an excellent marketplace that offers ecommerce businesses ample opportunities to reach new customers and bolster their international brand. If you have any questions about staying VAT compliant whilst selling with Zalando, get in touch with our team who are always happy to help.
At SimplyVAT.com our international experts are always happy to help you navigate international VAT and are always at hand to answer your questions. If you’re unsure of your international VAT obligations, or would like to get VAT registered, fill out the form below and a member of the team will be in touch.
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