Amazon updated us on 14th July about Brexit. We got to know that UK’s Amazon FBA activities won’t be a part of the EU. That means if you are a seller in the EU marketplaces of Amazon and the UK, then you need to be prepared for some significant changes coming your way! The EU and the UK are making some arrangements until the UK officially leaves the EU on 1st January 2021. So if you are a seller who thinks he needs to get ready for Brexit and its aftermath, then this blog is for you!
Some Background of Brexit?
It has been a decision in the making since 2016. After a lot of political turmoil, the UK will be withdrawing from the 47-year union. The Conservative Party won the general election of the UK back on December 12th, 2019. Consequently, the deal of Boris Johnson with the European Union was reviewed and then later approved by the Parliament. The Prime Minister announced publicly that the United Kingdom had to cut off its ties with the EU by January 31st, 2020. UK and EU have reached a Free Trade Agreement that takes effect on January 1, 2021. The changes will affect airports or seaports the most.
Will the upcoming Brexit Affect My Business?
Let’s start with the good news! If you are a UK FBA seller, you won’t have to make any changes to your business or listings. Generally, products coming from outside of Europe to the Amazon fulfillment centers won’t face any significant interruptions or delays.
What happens if I sell on the EFN?
If you are a seller on EFN, the European Fulfilment Network, then you may need to go through some changes.
Amazon has notified its third-party sellers of the following changes:
- Amazon’s UK FBA operations will be split from the EU with no more EFN (European Fulfilment Network).
- Amazon will not use the UK fulfillment centers for European orders.
- Pan-European FBA inventory transfers between the UK and the EU will no longer take place.
- Sellers will not be able to have their products sent for storage in Europe via the fulfillment centers in the UK.
- Third-party sellers’ products will be available to customers throughout Europe but will not be Prime-eligible.
- Beneficial delivery speeds and fulfillment costs that sellers enjoyed before Brexit will not be available anymore.
- The stock that you send to an Amazon warehouse in Europe can be distributed to other European warehouses only. But it will not be returned to the UK.
How should you manage the EU and UK inventory after the announcement?
For Brexit, We want to suggest you split your shipments if you are selling in each of the associated five countries. They have advised dispatching some of the inventory into the EU and some of it to the UK. That can help you ensure that you have enough items and merchandise on both sides when the UK formally ends terms with the EU.
You don’t need to worry just yet. The sellers are getting a notice of 6 months before the UK will apply the changes. You can develop solutions as you have got enough time to figure out how you want to take this forward. It might be best if you take out time and learn about the official announcement from Amazon through your seller central account. As always, Amazon is making an effort to keep its sellers updated and issued guidance to help them get over these changes.
What is the Future of Selling on Amazon under such Circumstances?
Well, it’s not that bad! The UK is now free to set its deals for trade and can lead up to lower taxes to pay for import and export with the countries that are not a part of the European Union. The UK government has also announced that they want to make fair deals with China, the US, and Commonwealth- so it may bring advantages for the UK sellers.
Some things to consider:
Tariffs will be imposed on items being sold between UK and other European countries. Send your inventory to fulfillment centers both in UK and Europe to avoid tariffs.
If selling from the UK to Europe, you will need an Importer of Record in the EU in order to send stock to EU warehouses in the future.
Probably the standardization of products will change and other regulations will be placed. You will need to stay informed.
Different VAT registrations will be needed for the UK and EU to be able to do business in the two marketplaces.
It might sound confusing and scary if you are a new seller or somebody who wasn’t ready for Brexit. However, you have got plenty of time and more opportunities waiting for you at your door! Buckle up, and don’t let Brexit get the best of you!
We have given you all the updates on Brexit, and we hope you found this article useful! For more relevant blogs regarding sellers, check out our blog page!
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