Do you know how participation of the UK in the Amazon EFN program will affect your business?
The start of 2022 has seen the announcement by Amazon that they will be reintroducing the European Fulfilment Network (EFN) between the UK and the EU. This service will be returning from 1st March 2022.
The disruption to international trade caused by Brexit, has had a serious impact on many sellers. One of the biggest disappointments to sellers was the EFN program being limited to European countries only, despite previously including the UK.
To combat this barrier for sellers, Amazon is now reintroducing the EFN link between the UK and the EU – this will be welcome news for you as a seller given the obstacles put in place following the implementation of Brexit, regarding shipping logistics and compliance between the UK and the EU.
How can Amazon EFN benefit you when trading between the UK and the EU?
Firstly, EFN allows FBA sellers to store their stock in the UK for fulfilment to EU customers. Given the logistical challenges that have been in place since Brexit, utilising EFN makes trading between the UK and EU a more straightforward process. Furthermore, EFN also allows FBA sellers to store stock in the EU for fulfilment to UK customers; thus, creating an efficient and hassle-free solution to your business when trading between the UK and the EU.
The implications of Brexit saw the exclusion of the UK from EFN since 1st January, 2021. As a result, FBA sellers looking to sell in the UK and EU simultaneously were forced to hold stock in both territories separately.
From 1st March 2022, if you utilise PAN-EU FBA, your EU orders will be fulfilled from inventory held in UK warehouses if you have no stock remaining in European warehouse facilities. However, it is worth noting that the Amazon EFN fees are higher than domestic fulfilment fees. Therefore, it may still be more beneficial for you as a seller to hold stock in FBA warehouses locally (in each territory) rather than relying solely on EFN.
When it comes to EFN fees and retail pricing, you can use the Build International Listings (BIL) tool provided by Amazon. By doing so, your retail prices will be automatically adjusted to ensure that exchange rates do not have a negative impact on your listings. The BIL tool will also account for Amazon fees and VAT to ensure that these elements do not eat into your margins.
Admission to use EFN is not automatic and will require some adjustments to your settings and preferences within seller central. The AVASK team are on hand to answer any questions you may have with this process.
What are the VAT implications when operating between the UK and the EU using Amazon EFN?
AVASK have a dedicated team of advisors, who will support you to remain VAT complaint when selling on Amazon and beyond. To give a brief summary of the VAT implications when operating Amazon EFN between the UK and EU, B2C sales from EU-GB not exceeding GBP 135, as well as sales from GB-EU not exceeding EUR 150 fall under the tax collection responsibility of the marketplace.
For any sales that exceed the GBP 135/EUR 150 threshold, as well as all B2B sales, the end customer will be listed as the importer of record and will be liable to pay any import VAT and duty on the consignment. Amazon will make an estimate of the import tariffs, collect them from the customer at checkout and remit these amounts to the respective customs authority on the customer’s behalf.
Finally, to confirm, Amazon will be looking to phase in the EFN changes from March 2022 onwards. Please arrange to speak to a member of the AVASK team if you would like to discuss how this will affect your business in more detail.