The volatility in markets, here and around the world, have actually encouraged businesses to take action and work to protect their economy and revenue streams. This initiation of backup plans is even encouraging the move, for some businesses, into the European ecommerce market. There's tremendous selling opportunity on Amazon in Europe, but that opportunity is plagued with difficult problems for US sellers who are expanding. Whether we're talking about the complexity of EU tax law, the unknowns of Brexit, the evolution of Amazon marketplaces, the different fulfillment programs to choose from, five different languages and two different currencies to support- and these challenges are constantly changing- sellers are often blindsided. 

For Amazon Selling Strategist Karen Codd, these challenges are just another day in the marketplace, and her expertise on both the challenges and solutions couldn't be more timely. Codd pointed out that sometimes, it can take up to a year to un-sort and unpack a very complex and time-consuming process,which leaves sellers spending a lot of time and money trying to understand what their next steps should be... before they even begin to sell. It became immediately obvious to Codd that if a seller could avoid all of the legal structuring, accounting, fulfillment and technology; they could double, triple or even quadruple their business from the start, creating a tremendous competitive advantage, by removing barriers for entrepreneurs expanding their Amazon business into Europe. The proper research coupled with market proof and a strategy putting tasks in the right order is necessary.

How To: Proper Research

There are certain products that either don't meet selling guidelines, don't really have a market in the UK and Europe, or are called something entirely different- and awareness of this right from the start is make or break. 

  1. Familiarize yourself with similarities and differences. Go the marketplace you are researching and look at new arrivals, featured brands, and bestsellers. Take note of how and where this aligns with the US market and your experience selling thus far. Take note of differences that may affect your sales. 

  2. Let the reviews work for you. From a product development standpoint, the negative and positive buyer feedback is one of the largest, and often most overlooked, sources of information available to you. 

  3. Dig into cultural differences. The color, the name, the marketing, the packaging, the materials, all of these details need attention when you enter a new marketplace. Culturally and socially, being aware of how your product is perceived is very important. 

  4. Ask the right questions. Get to know the country, the buyers, the trends, the economy, and the market shifts. Take time to understand what you are stepping into. 

It's important to understand that just because a product or SKU is performing well in one market, does not mean it will perform well in another. Success can bring a false sense of hope to sellers, when in reality, based on their lack of research or understanding, they are in for hardship. 

Let's Talk About Taxes

One of the big differences we see in the European market is how prices, taxes and VAT are structured and even displayed. In the US, sales tax is displayed after- in addition to the list price, whereas in the European Amazon marketplace, the list price includes the tax element. While this sounds like no big deal, when configuring listings and understanding price points and costs, this matters tremendously.

Transport and Inventory

Transport also directly affects your taxes, timelines, and overall success. Where are you storing your inventory? Will it go to one central location, so it clears customs and waits for buyers? Plenty of sellers right now have moved into the European market through the UK, and are storing inventory in the UK with Amazon or other warehousing partners. For this process to happen, you must pay an import tax. As that inventory leaves the UK, there are different programs available within Seller Central, which opens a seller up to a whole other world of potential pitfalls. Not to mention Brexit (but we have to mention Brexit)... which could potentially change when, where, and how product moves across borders with current processes. All of the sudden, what worked yesterday might not work tomorrow, and then we're talking pitfalls, paperwork, port delays, and ultimately costly time and resources directly on the sellers shoulders. 

Going All In

Codd's agency has witnessed the underbelly of this US to EU transition, they've answered the questions, and they've remained sellers in this marketplace we are discussing. Whether you're looking at VAT implications, inventory, selling across the five European Amazon marketplaces, volume of sales, sales categories and marketing, there is so much to learn and understand. Knowing the right questions to ask, understanding the differences between the EU and US markets, and doing the proper research is the only way to solidify your success as you expand your product sales into foreign markets. Many of my clients have experienced three to five times growth by expanding into the EU, proof that there is plenty of success to be had, if you can make your moves in the right order.

Published on: Nov 1, 2019
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.