Brexit, a topic that seems to be on everyone’s mind right now, sure is causing a lot of headaches. If you sell on Amazon and are based anywhere in Europe, I’ll bet you have questions and not many information sources to provide answers. In this post, I will try to answer some of the biggest questions surrounding Brexit for both Sellers and Vendors and talk about how you should adapt your strategy going forward to maximise efficiency in a post-Brexit world. 

How Will Brexit Affect Your Amazon Business

The first thing you need to understand is the actual effect Brexit will have on your business. It goes without saying that if you are shipping across the border, into or out of the UK, you will incur some new import/export charges. This means it will be greatly beneficial to warehouse a portion of your stock across the border so that you only incur import duties from your factory one time. Let’s look at this example below.

Let’s say you ordinarily warehouse your stock in the UK, sourced from the Far East. You have 1000 units in this location and will be shipping 400 to customers in the EU. Under the new Brexit rules, you will incur duties on the 1000 units as they enter the UK and then additional duties on the 400 units shipped into the EU. In total, you will be paying duties on 1400 units of stock. 

If you adjusted this strategy to instead have 600 units shipped into the UK and 400 into a warehouse in the EU, you only pay duties on 1000 units of stock. In the case of Amazon, it would be hugely beneficial to take advantage of FOB, or Free on Board, if you haven’t already. By doing so, you cut out any additional warehousing fees you may incur too.

Seller Central

If you are a Seller on Amazon, it may be time to consider if moving to a Vendor Central account will be better for your cross-border business. Especially given the favourable FOB operation Amazon is running, which will only become ever more important as a tool for dealing with Brexit. 

Understandably, becoming a Vendor isn’t for everyone, nor is it possible. With the UK removed from the Pan EU selling programme, you may have found yourself severely limited in your potential market. 

First things first; enable Multi-Country Inventory. Click here for more details on that. This will allow you to keep FBA stock in Fulfilment Centres across the border. By having this enabled, you will win the buy box more, and your goods will be Prime eligible. On top of that, your products should organically rank much higher in Amazon search results across Europe. 

Be aware of your VAT obligations, as you may need to be VAT registered in each of the countries you plan on selling in. Each jurisdiction will have its own rules regarding taxes.

Shipping into the FC will be the same as any other cross border shipping. You will need to work with your courier on this. Usually, when booking the shipment, they will request further details such as a description of the goods, their value, and country of origin.  

Vendor Central

If your quantities are high enough to take advantage of FOB, now is the time to do so. It makes a lot of sense if you have to ship your goods across a border anyway. 

The alternative to FOB is a dedicated warehouse to receive goods from their origin country and forward them to your local clients. The upside of this approach is that it services all of your customers in the region, something to consider if Amazon is not your only customer affected by Brexit. The main drawbacks of this model are cost and availability. Warehouse space doesn’t often come cheap, and your forecasting had better be spot on to avoid going completely out of stock. Or worse, getting lumbered with excess inventory. 

Unsure if FOB is right for you? Email me at billy@etopiaconsultancy.co.uk, and we can schedule a call to talk over the benefits, potential drawbacks, and strategy behind getting started with FOB.

What You Need To Ship Across The Border

To ship across the border to Amazon, you will need to supply the following details:

• EORI Number
• VAT Registration In Destination Country
• Commodity Codes
• Country Of Origin Information
• Business Registration Details

All of these will be requested by your Courier before shipment. Once they have the goods in their possession, they will take care of the paperwork once it reaches the border. 

For more information on any of these requirements, check out the help section in Vendor Central. Under the Brexit topic, they have several useful videos available to assist in cross border shipping. 

Don’t Be Put Off By These New Challenges

Working across the Brexit border will be very different from before but you shouldn’t let this hold you back. As we have discussed in this post, there are a few ways you can adapt to the challenge of Brexit and as time goes on the processes will become more refined. 

If you still need help or advice regarding your e-Commerce business in a post-Brexit world, reach out to us at Etopia Consultancy. We are your strategic partner in e-Commerce.