Amazon sellers in the UK will no longer be able to access the EU marketplace using the platform’s UK fulfilment services from the end of the transition period on 31 December 2020.
The e-commerce giant currently allows UK sellers to send products to one of its fulfilment centres in the UK, where goods are then stored and distributed across Europe by Amazon, based on anticipated demand.
However, Amazon last week announced that it would be splitting its fulfilment networks between the UK and the EU.
Loss of market
Amazon said the UK would no longer be part of either its European Fulfilment Network (EFN) or able to access its Pan-European Fulfilment by Amazon (FBA) service.
Through the EFN, companies can currently keep stock in the UK and sell it across Europe, only picking up shipping costs when international sales are made.
Through the Pan-European FBA service, UK companies only pay local shipping costs. Amazon then moves the stock gathered in its UK fulfilment centres into Europe, making the final delivery to European customers quicker – including through Amazon Prime.
Dr Anna Jerzewska, a customs expert and adviser to the UN, explains on Twitter that the cessation of these services is due to the “introduction of customs formalities between the UK and the EU” and the removal of the “import VAT relief for low-value parcels”.
She said rather than absorb the extra documentary requirements themselves, Amazon has opted to pass this admin and cost onto the seller.
With both services no longer available for those using the UK Amazon platform, sellers will need to consider splitting stock between the UK and EU to continue selling into Europe.
Chris Dawson, the editor and founder of Tamebay, explains:
“The logistical impact will be a higher barrier to entry to selling on mainland Europe from the UK.
“If you want international sales from Europe then you will be forced to split your stock (which will probably mean higher inventory holding and additional costs) and send part of your stock to a warehouse in Europe (with the associated additional shipping costs compared to the UK).”
Dr Jerzewska agrees, tweeting:
“UK here is a tip - just do what they do in Geneva. Find yourself a French friend across the border and get your Amazon goodies delivered to them.”
Ashley Cooke, an Amazon specialist at Clickthrough Marketing, told the Daily Update (20 July) that UK sellers could split stock between UK and EU fulfilment centres to gain access to the Pan-European FBA service, but this would be an expensive process.
“You must be sure that you will have sufficient demand across the continent before you commit to sending a large amount of inventory over,” he said.
“The cost of doing so is going to be higher than it currently is in the UK. It will still be less than shipping FBA products to each country individually.
"But, to avoid long term storage fees, sellers will need to make sure that they know what their sales velocity looks like.”