Question on difference between PAN EU FBA & MCI
I just have a query about these 2 services.
As I understand it, you HAVE to register for VAT in the 6 countries for PAN EU FBA before you do anything at all. This is fine.
However, for MCI, where, for example, you would send an FBA from the UK to a FC in one of the the EU countries, would it be correct to assume you would need to register for VAT in those countries anyway? (like for PAN EU FBA). It seems like this might be the case to me, because Amazon might fulfill a DE order with an FR fulfillment-center stock. Do you see what I am saying? Or have I misunderstood this?
Is it because your stock for PAN EU FBA can be moved around the whole of EU as needed, and that’s where the VAT thing comes in, whereas the MCI stock just ONLY sits in the country you choose, never moving, but could still fulfill another EU country’s order, so for example an order would go from the France stock, rather than the UK stock (and theoretically be a bit cheaper) for say Spain.
Can anyone clarify please. Thank you in advance.
3 replies
Seller_kRWVqByTBbuvs
Hello,
I believe that you may be confused with what MCI (Multi Country Inventory) is. MCI allows you to store inventory in an EU country, by directly sending that inventory to the Marketplace for storage. This inventory if stored in FR, will be charged local FR fees when fulfilling orders to FR addresses. As you would be storing the inventory in FR, you would be required to register VAT for that country.
MCI would allow you to choose which countries you would store your inventory in, and therefore which countries you would be required to register VAT in. PAN EU requires you to register in all marketplaces as Amazon would take responsibility to move your inventory around all marketplaces, meaning that no matter where your inventory is, you will only be charged to local fulfillment fees.
I suggest that you read about the European Fulfilment Network, as this touches on your question, which is in relation to orders being made in one marketplace, but being fulfiled using the inventory from another country. The EFN would be the service used here and as it has higher fulfilment fees, should be considered when pricing your listings.
Each of these options has its own benefits, costs and requirements, so I suggest reviewing them all before considering which one best matches your business plan, and above all understanding the individual costs when pricing your inventory.
I have provided useful links to our help page content in previous threads, such as this one here below:
I hope this helps,
Alex
