Amazon, and especially its 3P selling platform, has proven to be a great incubator for new brands. As brands take off on Amazon.com, we frequently get the question, “What’s next?” Increasingly, the answer includes expansion to the European market, leveraging Amazon’s ecommerce tools as an accelerant. With 300M unique visitors per month to its European properties and estimated sales of about 25-30% of US revenues, expansion to Europe, if done right, is a very attractive option for new brands. The real question is, “how?”
Amazon global selling documentation will often lead prospective sellers and brands to believe a European expansion project is a relatively simple, pain-free process. But a closer examination of the various regulatory, legal, tax and product safety requirements, in addition to multi-faceted supply chain and logistical considerations, prove that launching EU operations on Amazon is inherently complex for clients to pursue on their own.
In response to these challenges, our team, in partnership with a licensed import/export consultant, piloted a new five-step, fully integrated approach to launch one of our fastest growing client brands in Europe in under 90 days. We’ve compiled our learnings below to illustrate some of the hurdles faced along the way and highlight some of the considerations brands should evaluate when deciding to expand internationally to the EU.
LEGAL, TAX, AND PRODUCT SAFETY COMPLIANCE REQUIREMENTS
- Every country in Europe has unique tax requirements for consumer product sales. You must ensure you comply with all local laws and regulations based on which EU marketplace you’re selling on.
- When importing goods to sell within Europe, you need to learn the nuances of Value Added Tax (VAT), a tax on consumer transactions. VAT is collected on business transactions, imports, and goods that move between EU countries. Depending on the Amazon marketplace and fulfillment method you plan to leverage, you may be required to register for VAT in more than one country. Additionally, there are requirements for accounting for and reporting on VAT. We advise clients to consider working with an accredited EU accounting service to ensure compliance. Obtaining a VAT number may take anywhere from a few weeks to several months from your initial request date.
- You will need to set up and register your business as a European company. If you don’t want to do this, you will need to appoint an authorized representative (AR) who is established in the EU to act on your behalf.
Keep in mind that certain product standards (such as voltage for electronic devices) can differ across Europe.
- Amazon also requires that listings and customer support are provided in a marketplace’s local language. Their international listing builder will automatically translate your listings, but we advise you hire a professional translator to avoid listing errors.
LABELING, MARKS AND PACKAGING CONSIDERATIONS
If not currently distributed throughout Europe, and depending on the types of product you sell, the EU may require separate/unique certifications for EU conformity denoted by specific marks and labels. One example is “Conformité Européenne” or CE marks, which indicate that the product complies with all EU standards. Also, as a result of BREXIT, the UK now has their own conformity requirements to consider.
Several countries across Europe have strict environmental standards, which translate into certain packaging requirements brands should be aware of. For example, Germany has a law that stipulates specific aspects of the packaging, including materials, size, and recyclability.
- EU member countries may also stipulate that the product’s function and list of ingredients/contents appear on the container or packaging – in addition, this information on the label must be provided in their national or official language(s). Developing one packaging solution that meets all EU language laws is highly recommended.
SUPPLY CHAIN, LOGISTICS AND FULFILLMENT OPTIONS
The off-Amazon considerations can be overwhelming for clients, but our fully integrated approach has been successful in speeding up the time to launch by a significant margin. In addition to managing all the off-Amazon logistics of importing products, we also assist clients with the localization of their listings, reviews and content, as well as providing on-going account management and support.