Brexit cancels Christmas for Amazon sellers
Post-Brexit, Amazon is booting sellers using UK warehouses out of its European services. But ParcelHero warns that Amazon could stop sending UK sellers’ products to EU centres early to avoid a red tape returns nightmare after Christmas.
This week, Amazon has officially acknowledged that all its sellers who only use a UK Fulfilment Centre will no longer have access to its EU marketplace from 1 January. UK sellers using Fulfilment by Amazon (FBA) will be forced to ship their goods to an EU-based Fulfilment Centre or lose all European sales.
The international courier services expert ParcelHero warns sellers who take no action or decide not to send stock to an EU centre could find Amazon stops shipping their items to the EU even before Christmas. This would avoid a build-up of stock that will have to be returned after 1 January. ParcelHero also fears the e-commerce giant may even start the process of returning stock to the sellers’ UK warehouse during December in anticipation of the end of Pan-European sales.
ParcelHero’s head of consumer research, David Jinks MILT, says:
‘On 1 January, the UK will leave the EU’s single market and customs union. There is time for the UK and EU to agree a decent deal, but that’s far from certain. Amazon has to plan its systems months ahead and has obviously opted for the worst-case scenario and decided EU and UK sales need to be kept entirely separate for now.
‘Amazon will be highly reluctant to see a build-up of UK sellers’ stock in Europe during December. That will present a red tape nightmare in January, when some stock is inevitably returned.
‘The e-commerce giant says crisply: ‘FBA offers using EFN will not be fulfilled across the UK-EU border.’ EFN is Amazon’s European Fulfilment Network; currently, it’s the Amazon easiest service for UK sellers to use in order to reach EU customers. EFN allows UK-based sellers to fulfil orders from any Amazon European marketplace using just one Fulfilment Centre, such as the UK. UK sellers can create listings on Amazon’s EU marketplaces but fulfil those orders using UK stock. Items are shipped directly from the seller’s UK warehouse. The fees for EFN sellers are quite steep, but the advantage is that it presents an easy way to sell into the EU without needing VAT numbers and minus the red tape in other countries.
‘Our worry is that the end of this service just six days after Christmas is bound to create a nightmare before Christmas, as Amazon starts to repatriate UK sellers’ stock.
‘The situation is equally complex for retailers using Amazon’s Pan-European FBA service. Pan-European UK sellers send their stock to a Fulfilment Centre in the UK and Amazon then distributes it for storage across Europe. That means sellers are only paying UK local fulfilment fees while using Prime same/next day delivery services throughout the EU. From 1 January, UK Pan-European sellers will have to send stock to an Amazon warehouse in Europe at their own cost. Once it has reached an EU Fulfilment Centre in, say, France or Germany, it would then be distributed by Amazon to other European warehouses as is currently the norm. For sellers, this means splitting stock and potentially increased transport and storage costs. It also means they are forced to deal with VAT in different EU countries. What happens to returns after 1 January is a looming problem.
‘ParcelHero lists thousands of courier services to the EU for Amazon retailers who decide to continue selling to the EU, so getting stock to a designated European warehouse is easy. We recommend France as the cheapest EU destination. By using couriers to reach Amazon EU centres, UK sellers could enjoy significant profits by sending lightweight, high-value items to European warehouses. Bulk shipping of less valuable items can also reduce costs considerably. Again, a wide range of pallet load services can be seen on ParcelHero’s website that are ideal for stocking EU warehouses.
‘For all those UK sellers not wanting to take a leap into the unknown, January marks the end of EU sales on Amazon. Adding to the problems, the e-commerce giant may start to get heavy-handed about large quantities of stock shipped to EU warehouses at the start of the Christmas season, just in case a backlog of forced returns starts to build. Sellers may want to consider getting stock to the EU well in advance of any service disruption for their final EU Christmas. We recommend Amazon retailers bring all their Christmas plans forward, even if it means increased storage costs. Otherwise, Amazon’s many UK sellers are facing a blue Christmas without Amazon EU.