The global eCommerce industry is in full swing with emerging new marketplaces as the main drivers of growth. Europe, in particular, is experiencing a boom as the number of new online businesses increases by the day. But nowhere is the growth more evident than in Germany—a region that contributed to 29% of global eCommerce growth in 2020.
Massive sales potential and the ability to easily sell in neighboring countries are factors that attract both new and veteran sellers to Amazon.de. However, some dive headfirst without understanding the challenges related to expanding into a foreign marketplace, wasting thousands of dollars in the process.
To ensure your business expansion to Amazon.de goes as smoothly as possible, here’s a guide on how to sell on Amazon Germany, the right way!
Amazon has 16 marketplaces across the world, so why prefer Germany over the rest? Aside from the tremendous growth the region is experiencing right now, these are a few other reasons Amazon.de is worth investing in:
Note: Some sellers get a bit carried away when expanding to Europe and list products across the big five EU marketplaces: UK, Germany, France, Italy, and Spain. Such a strategy is ill-advised—at least in the short run. Start with Amazon.de and then build your way up slowly otherwise you might bite off more than you can chew!
If you’re wondering how to sell on Amazon Germany, you either:
First, we’ll discuss the Amazon account creation process for new sellers and then move on to the more advanced aspects of international selling. If you fall into the (b) category, just skip the next section.
Creating an account on Amazon.de is easy and only takes a couple of minutes. But before you initiate the signup process, know that there are two main methods of selling on Amazon.
The first method is called reselling where sellers choose high-demand products that are already being sold on Amazon and resell it, competing with others on price.
The second—and more lucrative—method is called private label where you source or manufacture your own products under a unique brand name and offer them to customers through your Amazon store.
Visit the sign-up page and provide information on the following:
You’ll soon receive a confirmation email after which you can begin listing your products.
Just as US sellers have to pay sales tax, EU sellers are obligated to pay value-added tax (VAT) where applicable. But unlike the US, VAT must be paid on import i.e. the moment your goods are shipped to an EU country. Also, when selling on Amazon, VAT should be included in your list price. For example, if you’re selling a product for €50 and VAT is 10%, your list price should be €55.
VAT isn’t static—it varies depending on the country you’re selling in and can get pretty complicated when selling across multiple EU Amazon marketplaces. An advantage of selling in Germany (and also the UK) is that it’s easier to calculate VAT as opposed to other places.
Now that you understand the importance of VAT, how do you calculate it? Well, you shouldn’t. Calculating VAT is difficult and best left to the experts. According to Amazon’s Global Selling team, issues related to VAT are one of the leading causes of European Seller Central account suspensions.
In terms of handling VAT obligations, you can avail one of two options:
Note: It may be tempting to take the DIY-route with VAT to save up on costs. However, this approach carries the risk of running into trouble later on paying hefty fines. It’s best to go with one of the two options we just discussed.
Along with VAT, an EORI number is needed to import goods into the EU, even if you don’t have a business entity. EORI numbers are also needed for custom declarations and act as unique identifiers for both individuals and companies operating within the EU.
Selling without an EORI number results in delayed movement of goods as well as extra costs. It’s best to apply for VAT and EORI as soon as your seller central account gets approved.
Selling in the EU means having to adhere to rules and regulations aimed at not only protecting customers but the environment as well. Aside from VAT and EORI, things worth considering include:
Pro Tip: Before you begin, go through Amazon’s article on European Tax and Regulatory Considerations. Once operations pick up steam and you’re ready to sell products across various categories, it’s recommended to get in touch with a business lawyer to ensure compliance.
Fulfillment by Merchant (FBM) and Fulfillment by Amazon (FBA) are two ways you can ship inventory to customers from your warehouse in another country, from one European country to another, or within Germany. Each comes with its pros and cons. Let’s look at FBM or self-fulfillment first.
Cross-country or transcontinental FBM is really complicated and mostly done by sellers/brands with an already established logistics network. Shipping via FBM is expensive and time-consuming. You should be well-versed with the taxes, custom duties, and all clearance procedures to avoid delays. Even then, it’s difficult to compete with local sellers as far as delivery times are concerned.
Intra-EU FBM is still viable for new sellers so long as they partner up with reliable third-party distributors. All in all, the cons outweigh the pros for the vast majority of sellers who would fare far better with FBA.
When selling in Germany or any other EU Amazon marketplace, there are three different fulfillment programs you can leverage, each with its own unique advantages. These are the Pan-European FBA, the Multi-Country Inventory (MCI), and the European Fulfillment Network (EFN).
Under the Pan-European FBA program, you ship your inventory for storage to a central fulfillment center. From then onwards, any order you get from any EU marketplace will be shipped to the customer without incurring a per-unit cross-border fulfillment fee. Aside from enabling Pan-Europe FBA within seller central, you should have an active offer in each Amazon EU marketplace.
Keep in mind that you must also register for VAT in each marketplace/country you wish to sell in. Also, the FBA fees may differ in each country. Pan-EU FBA is advantageous if:
Even if your sole focus is to sell on Amazon Germany, your seller central account is inclusive of all other EU marketplaces, so it’s worth knowing about this fulfillment method.
Multi-Country Inventory and Pan-European FBA are similar insofar as your ability to dictate where your inventory is located. MCI is best suited for scenarios where your sales are evenly distributed amongst two or three EU marketplaces.
For example, if Germany and France are where most of your orders are coming from, MCI lets you transport and distribute a set percentage in both countries, thus having the competitive advantage when it comes to shipping times. Like the previous method, you don’t have to worry about cross-border fulfillment fees.
The most convenient fulfillment method (from a seller’s perspective) is the European Fulfillment Network. All you have to do is ship your inventory to one place and any orders you get will be shipped from that location. Products can easily be managed from the seller central dashboard and there’s also the opportunity to become Prime eligible.
EFN is the fulfillment method of choice if you want to easily manage inventory across multiple marketplaces, get seller central pages in English for all EU markets, and view information via a single dashboard. The downside, however, is that you’ll have to pay cross-border fulfillment fees and endure longer shipping times.
The final chapter on how to sell on Amazon Germany involves creating product listings and overcoming language barriers. Your product listings need to be accurately translated into the German language taking into account all nuances involved. Regardless of how advanced a translator tool or AI may be, there is no replacement for human effort (at least for now).
German buyers pay close attention to customer reviews, average ratings, and are least likely to get influenced by fancy marketing gimmicks. A sub-par product listing won’t only reflect negatively on your brand but also dissuade potential buyers. Hire a translator with prior experience of creating product detail page content and knows how to properly incorporate keywords.
Amazon also requires that you provide customer support services in the local language which means hiring a native German speaker or outsourcing it to a local customer support agency. The problem gets worse if you plan on selling in other EU countries as well!
Selling via FBA solves this problem; however, you will still need to get your listings translated, irrespective of the fulfillment method.
Note: There are numerous spelling differences in US and UK English. So if you plan to sell on Amazon.co.uk, it pays to have your listing content crafted according to the local audience.
This sums up pretty much everything there is to know about selling on Amazon Germany, but the learning doesn’t stop here. Amazon, as an eCommerce platform, keeps evolving which reflects in the constant change in seller policies. To succeed on Amazon.de (or any other Amazon marketplace for that matter), it requires sellers to remain up-to-date on all things Amazon.
To ensure that you remain at the top of your game, Zonguru offers 16 unique seller tools designed to make selling on Amazon Germany as easy as possible. These tools assist sellers from the product research stage all the way to maintaining top ranks in your product niche. There’s also a wide range of free content (that gets updated every week) including blogs, podcasts, newsletters, and more!
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