FBA GERMANY / USA. Worth the hassle?
Good morning sellers and I hope you are doing great.
I’ve been doing FBA from the start but only sell in UK. We sell footwear. However, I’m currently looking to expand into USA and Germany hoping to double our turnover, but is it worth it? Maybe it’s just a pipe dream? who knows?
I’d like to seek others’ opinions from their experiences because jumping in blindly could be a case of ‘If you F around, you’ll find out’
Has anyone done this and succeeded/regretted. Do you have to rent storage facilities in these countries to get your returns sent to?
I know there are tons of paperwork, taxes to deal etc
I’d like to hear from sellers who are/were selling in USA and/or Germany alongside UK
I’m LTD and VAT registered. Registered in all amazon EU marketplaces too but not USA
Thanks for your time.
P.S
Please try to refrain from political talking points if possible, It just derails things I think.
34 replies
Seller_7VbclcPFFRTnc
Definitely speak with your accountant re tax implications in US and VAT reg in EU
You’ll need an importer of record and fiscal representation in Germany too
As well as registering for EPR
Vat registration in Germany is for a minimum period of 2 years
There are a couple of sellers that have great advice on Germany @JR_Wristbands is one
Their advice most likely though it forget sending stock to Germany - go via France instead
There are also a couple of threads on US including the insurance required for storing stock in US FBA
I’ll try and dig it out
Seller_bVMO2D5wfURBb
If you are going to sell in Germany (sorry USA never appealed to us), and use FBA or store your products in Germany or have your own warehouse in the country you need to register for VAT in Germany and also an EPR number (packing disposal fees paid yearly) and if it is Electrical you will also need a waste disposal number for Electrical goods (I think this is also paid yearly).
In the end we pulled out of Europe and are in the process of deregistering our VAT numbers as the expense out weighed profit.
You will also have to take into consideration fees for an accountant to do your VAT returns for each country your in (this can be done via Amazon).
There is a lot of expense setting up to sell in different countries and also a lot of ongoing expenses you need to be sure that you can really make a go of it otherwise you may find that expanding is eating into your profit in the UK.
Seller_ae51e0CJoHqCX
Don’t worry about that, your question is not specifically related to politics in any way. You quite rightly need to focus on the technicalities of doing it. Also whether it will be worth it is only really a question that you can answer but I will attempt to help you on the EU.
I have looked into selling in USA and have experience of selling in Japan. I wouldn’t get involved in either of these jurisdictions when it comes to fba but it maybe worth your while sending stock directly as you still need representations and importer of records and so many more hoops to jump through as well as the physical costs.
My big thing for Europe is that you need to make a choice of whether you want to target a single Country or multiple Countries. If you wish to target multiple Countries then the obvious way to do this is through PAN-EU.
This would make a huge thread to answer the hows and the whys but I will tackle your initial query and see if you then have an appetite to go down that road.
You are registered already in all Amazon EU Countries, is there a reason for this and are you and your company registered in the UK?
There is a possible new scheme that has not been announced yet that will make this thing really easy for you. Trying to do this outside of Amazon for yourself will cause a lot of heartache and virtually impossible. You may want to hang around a bit to see if Amazon invite you to do something with them. It will normally trigger something as long as you have signed up to VAT services through Amazon.
My biggest advice would be to look to Euorpe before USA… I haven’t tackled the USA as once you get involved in Europe you won’t have the time or the appetite to do it. If you try and do both the chances are you won’t do either very well.
There isn’t tons of paperwork to deal with as most of this is automated and done by your tax advisors, registration in some jurisdictions like Spain is a pain but if you are already registered then most of your problems are taken care of anyway. The issues come when you try and do this outside of Amazon or use external services as Amazon are not particularly helpful when it comes to external companies as they will tend to pass the buck onto whoever is helping externally. Therefore stick to partner carrier programs, use Amazon recommended services etc as that way your issues will need to be dealt with internally rather than externally which is an even bigger nightmare.
Cannot tell anyone if it is worthwhile, in hindsight with where I am now and considering I started this journey well before Brexit, I would have given it a big swerve. The problem is that once you are priced in with time and legislation it is difficult to turn your back on it. If you just want to give it a whirl and have no idea of your objectives or sales potential, I would urge you not to carry on as not only is it not cost effective but you also have to be mentally strong. Amazon Europe has come close to breaking my spirit on many occasions in the past but again Brexit related.
Many on here struggle with just the UK marketplace and compliance etc. Whatever issues you come across in the UK, multiply those issues by around 5 if you are dealing with Europe.
If you do nothing and have around £3k a year to chuck around, you will keep your head above water. If you manage to get some traction, you will be looking to spend a couple of grand more on top, then any profits over this will then be comparable with what you do on other marketplaces.
It is equally punitive as it is rewarding if you manage to get to actually trading in Europe on FBA. You can’t do it half hardhearted.
Seller_uZmYgk2Q734Ed
We sell in both US and DE via FBA, as well as UK FBA.
Currently, both US and DE FBA each generates way more sales for us as compared to UK FBA. So for us it is a no brainer.
You will need a US return address if you start selling in US, regardless of FBA or not. Amazon recently release a list of US return address service provider. We use American eBox, and I think it is among the list given by Amazon.
To sell FBA US, you will need to open a company in the US for tax compliance purposes. You will need to do this via an accountant or tax adviser based in the US, as you will need to give them PoA for them to act on your behalf. Speak to AVAST. They are US based and they are familiar with US tax matters. They will also discuss with you the tax treaties between US and UK and your tax liabilities.
You will also need to think of what you plan to do with returns in FBA warehouses, as I imagine footware will have high return rate.
To sell in FBA DE, you will need fiscal representation to import goods into FBA warehouses in Germany. And of course you will need VAT registration in Germany too.
We use tax advisers for both US and DE (AVAST and Avalara). There will be fees involved. And you will need to be vigilant too as these “tax advisers” will slip up occasionally, and forgot to file a document with the tax office on time. You will need to be fully aware of what documents your company need to submit, and by which deadline, and you need to check their work to make sure that the documents were submitted on time. It sucks, but I don’t think there is a better service provider than AVAST and Avalara (unless you go with boutique tax advisers). It is your company after all, and the due diligence will still fall on the director at the end of the day.
But for the sales that US and DE FBA have generated for us, it is well worth it 
Seller_uZmYgk2Q734Ed
One more thing to consider.
If you start selling on US marketplace, regardless of FBA or not, you can kiss goodbye to cheap liability insurance.
Once you declare that you are selling to the US, only bigger insurance company will be willing to offer you product liability insurance, and their insurance products are priced higher than normal. Amazon US will require you to have a statement in your liability insurance schedule, stating clearly that the product liability insurance cover the US jurisdiction for a few millions dollars (I can’t remember the exact amount, but it is the usual coverage amount that most liability insurance package will offer). You will need to upload this schedule to the US portal for verification, or your US account may be suspended temporarily.
Seller_sOtzJezftTMrB
Is selling in Sweden (scaling up for a UK seller) any different from the rest of the EU? Any ideas/experiences?
Thanks.
Seller_vIpv9uvBH6CFY
I can’t comment on the States, but the EU has been great.
One thing worth considering is that if you want to sell to the whole EU instead of just Germany, then FBA will require VAT reg in all your EU countries. However, if you use an alternative fullfillment centre, you can use 1 single VAT registration for all of the EU (and dispatch to the whole EU from that one country), by signing up for the OSS system. You can file everything for the whole EU from 1 single VAT registration that way.
Obviously alternative fulfillment has it’s downsides, but so does the compliance burden due to FBA using multiple countries for storage. I have a property in Poland so I dispatch my own EU orders, but in the UK I use huboo fulfillment, and I know they have a new warehouse in Germany. Their UK location has been great. Not sure about German pricing, but you’d have to compare that to compliance costs with FBA. There are quite a few EU Fulfillment houses to get quotes from.
My biggest channel is Germany followed closely by France. UK is third. I do beauty products. Spain and Italy can be a bit dodgy. But I highly recommend FR and DE, and the smaller EU sites are also decent.
Germans like to return a lot and they really like the ‘pay by invoice’ feature, FYI, but they’re also high turnover so it’s worth it.
You’ll also need german EPR, and an EU trademark is like 800ish Euro.
Seller_aovSrGTvHBnnz
Thank you all for your contribution and insight. I have more decisions to make now, but in the meantime it’s just great to have such incredibly helpful people on this forum. Amazing.
It’s a shame I’ll probably no longer be able to use this forum once the new format kicks in.
Thanks again. I appreciate you all.
Cheers
