We’re talking with John Cavendish of FBA Frontiers about accessing Amazon Europe.
For many of my American listeners, as well as some Brits, you might not be selling on Amazon Europe. There is a lot potential for sellers that are willing to put in the effort.
John started as an engineer doing independent contracting. It wasn’t the life he wanted. He was looking for more money and more freedom, so he sourced his first product at the end of 2014 and went live the following February. Now he lives in Vietnam.
Once he built his team and put more focus on Amazon Europe rather than just in the UK, his business took off. Amazon Europe is still rather untouched, so sellers can gain traction much more quickly than in more mature markets the US or UK. He looked at a case study where a seller was doing 30-40k a month and their product had about 13 reviews. Even products that you wouldn’t consider are still viable. Think garlic presses or silicone spatulas.
Always have your items listed in the other countries even if you’re not pushing it. An item that is really competitive in Germany may still get 5 sales a day in France or Italy with no reviews just because it’s there.
The first step is to get your VAT, which could take a couple months. This is the sales tax information which allows you to import good into the UK. You can get help at fbafrontiers.com/vat.
The second step is to do your research. It’s similar to what you would do in the US only you have to treat each marketplace as a separate market. If you have ASINs in the US or UK, you would just work backward. Get your main keywords and put them into the UK, Germany, France, Italy, Spain and rank them as an opportunity. Look at the top sellers and look at the number of reviews, feedback, or if they’re actually selling something.
The last step is to get listed. If you’re in the UK, get your translations done right away and get listed. If your product is in the US, pick your top one or two SKUs and get some stock into the UK. This might not be the best-selling SKUs, but the ones that you think will do best in Europe. If your best product is in a niche, there might not be enough volume to make it worth it.
VAT is part sales tax and part import tax. The UK government views imports as a sale and taxes it at 20%. So, if you are bringing in items from China and each unit costs $10, the UK gets $2. However, this is reclaimable against the final sale. Let’s say you’re selling it for $100. You would list it as $120 because you need to collect $20 for the tax, but you would only pay $18 since you paid the $2 on import.
It’s relatively simple once you get your head around it, but you’ll have a VAT agent to take care of it. You can get a good deal through at fbafrontiers.com/vat or you can pick any agent you want. They’ll do the paperwork for you. If you have an item, you can go to fbafrontiers.com/calculator to figure out what the cost will be.
If you want to know more, check out this article on Reviewing the best Amazon FBA Calculator.
Once you start selling in the UK, you’ll be pestered by Amazon to register for Pan European FBA. Pan European means that they can freely move bulk boxes of your inventory throughout the five main markets, Germany, Italy, France, Spain, and the UK. They can also store your inventory in Poland on the Czech Republic. So, you’ll need 7 VAT numbers; one for each country your product may be stored. This is something that your VAT agent can take care of. Just be sure to negotiate their fees.
Amazon charges you for this service. However, once you’re moving more than 400 or so items, it’s cheaper than moving them yourself.
If you are selling in the US, the keyword research would be the same for the UK. You should do some reverse ASIN searches on something like Keyword Inspector to ensure you don’t miss obvious translation like diaper to nappy. For the other marketplaces, the tools work the same. Even for PPC, it would be the same strategy. In France and Italy, you could probably just run broad campaigns and they’d do just as well because it is so non-competitive.
One of the biggest challenges will be the translation of the listings. That is something that will be covered in the next episode.
FBAFrontiers is a great course for Amazon sellers that know how to sell on Amazon and are looking into expanding into Europe. It’s five modules including template, determining if there’s a market, getting started in the EU, and much more. If you use my link, http://fbafrontiers.com/amazing, for a special discount as well as a free call with John.