Important Things To Know About Brexit’s Impact on Amazon Business

Important Things To Know About Brexit’s Impact on Amazon Business

Apart from the global health crisis that brought about the COVID-19 pandemic, Amazon sellers, particularly those active in the European marketplace, have another undertaking to face. With Brexit already in effect as of January 1, 2021, Amazon sellers are now met with updated marketplace rules and guidelines to follow.             

To give you a better understanding of Brexit and how it affects eCommerce, especially the Amazon industry, here are some key points to remember. 

 

a photo of brexit, amazon uk

Image by Reimund Bertrams from Pixabay

 

Changes After January 1, 2021

With the exit of The United Kingdom from the European Union, significant changes will be observed by both parties. These changes center mainly around how the aforementioned parties will have to trade, work, and live together. 

In the context of the trade relationship and upon the effect of Brexit, the UK-EU trade agreement will be implemented. This includes the reduction or elimination of taxes for trading goods across borders. 

Additionally, limitations for a number of goods that can be traded between the UK and EU have no limit. This shared trade rule aims to avoid the price increase of goods between two parties. 

The Impact of Brexit on European Amazon Marketplace 

Like any other company, Amazon has likewise prepared counter-measures while anticipating Brexit. Here are some of the changes highlighted by Amazon prior to January 1, 2021:

  • Amazon has stopped the inventory removal orders for cross border inventory. It was implemented by Amazon last November 14, 2020. 
  • Pan-European FBA inventory transfers have also been halted by Amazon since December 18, 2020
  • Cross Border Fulfilment via European Fulfilment Network (EFN) started to wind down last December 21, 2020, and fully stopped last December 28, 2020

Now that the UK has formally left the EU’s Single Market and Customs Union, Amazon has laid down its implication for its Amazon Selling Partners which took effect last January 1, 2021. An Amazon News detailed that:

  • FBA offers using EFN will not be fulfilled across the UK-EU border.
  • Pan-European FBA inventory transfers will stop between the UK and EU (however, Pan-European FBA will continue to transfer inventory within the EU region, supporting your sales on Germany, France, Italy, and Spain sites)
  • To mitigate the impact of these changes, you should consider splitting your inventory and sending it to a fulfillment center in the UK and the EU, so that you have sufficient stock on either side of the new customs border
  • This may require you to ship your products across the new UK-EU customs border and provide additional information as part of a customs declaration

Additionally, Amazon sellers who are categorized under Merchant Fulfilled Network (MFN) may still fulfill orders using third-party carriers. However, MFN Selling Partners are obliged by Amazon to provide additional information, including the following:

  • Economic Operator Registration and Identification Number/s
  • The commodity codes along with the info about the valuation and type of goods being shipped. 
  • Details of the recipient of the said goods

Protecting Amazon Sales Amidst Brexit 

In order to mitigate the impact of Brexit on your Amazon sales, Amazon has recommended that FBA sellers split their inventory between the UK and the EU. This simply means that FBA sellers should send inventory items to the Amazon UK warehouses, as well as the Amazon warehouses within the EU regions. 

By splitting the inventory, sellers will have sufficient stock for both the UK or EU marketplaces. Amazon emphasized that sellers can protect their European sales by “inbounding to both the EU and UK FC networks through the Multi-Country Inventory.” 

Since your stock or inventory items will potentially be located close to your customers, hopefully,  sales will be maximized even after Brexit. 

Pan-European Amazon Business Preparation Tips

With the UK leaving the European Union, sellers should prepare accordingly to avoid any debilitating issues or concerns. Here are some tips on how Amazon sellers could prepare their business amidst Brexit. 

  • For both newbie and experienced sellers, deciding on which seller program to utilize will be helpful. Amazon sellers can choose from FBA, FBM, SFP, or even all fulfillment programs. 
  • Amazon sellers should also take note of their VAT registration. Sellers should complete VAT registration for all inventory items for all countries within the EU region.
  • Whenever required, Amazon sellers should obtain certifications, licenses, and/or permissions from IP rights owners. 
  • Amazon sellers should also prepare for customs declarations by onboarding with a customs broker.
  • Amazon sellers should register for both a UK and EU Economic Operators Registration and Identification number.
  • Compliance with the commodity codes should be observed while ensuring that listing information is accurate. 
  • Since you will be operating in various marketplaces, make sure you stay competitive in both the listing and repricing approach. Make sure to use a reliable Amazon repricer for your repricing strategy. 
  • Most importantly, Amazon sellers should see to it that Multi-Country Inventory Settings in Seller Central have been enabled. 

To be properly guided with your Amazon business amidst Brexit, you may CLICK HERE for more details. 


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