Selling on Amazon Europe – Is It Worth It?
You’re probably reading this article because you’re wondering if selling on Amazon Europe is (still) worth it:
Spoiler alert: Yes, it is.
In fact, there are countless good reasons to sell on Amazon Europe marketplaces.
Recently, the growth of the US marketplace has been slowing down and many fear it may have reached its peak, whereas the European marketplace is still growing steadily, with an average yearly growth of around 14%.
Additionally, Europe has a population three times the size of the US – 750 million compared to 320 million potential customers.
On top of that, Amazon is aggressively expanding into Europe and investing millions of dollars into setting up new FBA locations and buying local logistic companies, couriers, etc. to streamline the whole process for sellers.
So, whether you are a new Amazon seller or an established seller from outside the EU, you should consider starting to sell on Amazon Europe.
As you can see in the table below, four of the top ten Amazon sellers in the world are Amazon FBA EU sellers – two from the UK and two from Germany – compared to only ONE from the USA.
One Market – Six Marketplaces
When you sell on Amazon Europe, you get access to 6 different marketplaces: Germany, UK, France, Italy, Spain, and the recently launched Dutch marketplace.
Germany is by far the largest marketplace of the six, with $13.9 Billion in sales and almost 500 million monthly site visits. Amazon.de accounts for roughly 41% of Amazon’s total revenue in Europe.
The second-largest marketplace in Europe is Amazon UK, which accounts for 32% of the overall revenue for Amazon in Europe ($10.8 Billion) and over 400 million visits.
Next is France with 11% of the revenue ($3.8 Billion) and traffic of over 150 million visits.
After France, Spain comes next with 8% of the overall revenue in Europe ($2.8 Billion) and more than 150 million visits each month.
Italy is slightly smaller with also roughly 8% of the total revenue ($2.6 Billion). The traffic numbers are similar to Spain as well, with over 150 million page visits.
Lastly, the Dutch marketplace is the newest and was only fully opened in March 2020. Previously, Amazon.nl was only available for buying books and accessing Amazon.de. Therefore, there are no real stats so far, but since it’s very new, the growth potential is enormous.
Just like in Germany.
Even though Amazon.de has been around for a while now, it’s still growing strong. From 2017 to 2018, net sales still grew by almost 10%. Prime memberships are skyrocketing as well, making it such a strong market that it would be almost negligent not to consider expanding into the German marketplace.
Currently, the five European marketplaces are bringing in 85 million monthly unique visitors compared to 100 million monthly unique visitors to Amazon.com. Taking into account the size of the European market compared to the USA, it shows huge potential. The biggest advantage? You only need to open one account to sell on Amazon Europe. Seller Central integrates all the marketplaces and allows you to access and manage them from one single dashboard.
If you are an established US seller and you want to sell on Amazon Europe, the obvious market to start doing so would be the UK marketplace. Since it’s the second-largest EU marketplace and there’s basically no language barrier, it’s a great way to start your Amazon Europe journey. Once you’ve successfully entered the UK market, you can expand to the other marketplaces as soon as you are more established.
They are three main methods to sell on Amazon Europe, each with their own advantages and disadvantages:
Pan-European Amazon FBA
With a Pan European Amazon account, Amazon will automatically send inventory to the Amazon FBA EU locations where they think you need to restock – all from your central source.
However, this also means that you will need to register for a VAT and an EORI number in those countries.
Multi-Country Inventory or MCI
This is identical to the Pan-European Amazon program except that you can decide which Amazon FBA EU marketplaces you want to send inventory to and have a physical presence in.
So, for example, if you are using Amazon UK as your main European marketplace, but 30% of your European sales are made in Germany, it may be worthwhile to send stock to a local German FBA location.
Also, after March 1st, 2020, all European Amazon sellers will be required to apply for a German VAT license, in which case you might as well have inventory there (previously, this was one of the main reasons not to).
Having stock in Germany also has another incredible advantage: your products will be eligible for Amazon Prime on the German marketplace in addition to your primary marketplace.
European Fulfilment Network or EFN
This is probably the best solution to begin with, as you can use one Amazon FBA EU source for selling in all the marketplaces.
This means you will only need to register for a VAT and EORI number in one single marketplace. However, as mentioned above, now all Amazon Europe sellers will be required to apply for a German VAT number if they plan on selling in Germany.
With an EFN account, you can gradually expand into each of the marketplaces as needed rather than trying to have a presence in all 6 from the outset.
What are the Advantages of selling on Amazon Europe?
There are many advantages to creating a Europe Seller Central account and start selling on the European Amazon marketplaces – especially if you are already an established seller looking for new opportunities and markets.
One Unified Account
As mentioned above, you can now access all the European marketplaces with Europe Seller Central.
You will have one unified account with all your product listings, sales, etc. on one easily managed dashboard.
Obviously, with a population that’s more than twice as large as the US population, there are many more customers to reach.
It has been estimated that by selling on the Amazon Europe marketplaces, you could potentially increase sales by 30-60%.
The fastest-growing marketplace in Europe is Germany with 25% annual growth, followed by the UK (14.1% growth).
What’s so interesting about expanding to Amazon Europe is that there are far fewer sellers in these marketplaces than on Amazon.com. So you should be asking yourself when you will start to sell on Amazon Europe, not if.
What are the Hurdles to start Selling in the European Marketplace?
Despite the enormous growth potential, many sellers are afraid of selling internationally.
The reason is that most sellers feel intimidated by selling internationally due to language and legal barriers.
Many feel that it is too complicated and expensive to expand to Europe and only a suitable strategy for big sellers or international companies.
These fears are completely unfounded.
Nevertheless, there are some things that need to be considered:
- All product listings, packaging, and customer service should be in the native language of the marketplace
- You may need to rebrand your product according to local preferences
- You will have to deal with different currencies
In conclusion, there are some huge upsides to selling on Amazon Europe.
Amazon is investing aggressively in its European infrastructure and keeps on showing a massive increase in sales and traffic year by year.
Currently, there are no signs of Amazon’s path to success slowing down, but instead, it looks like Amazon Europe will keep on growing.
So, yes – Selling on Amazon Europe is definitely worth it.
If you missed out on the massive growth of the US marketplace, now’s the time to catch the European wave before it is too late.
Even the fear of other languages, cultures, and laws is unfounded.
There are many great European Amazon agencies, expansion experts, translation agencies, lawyers and etc. to help you with the localization of your brand and products.
Many of them will give you a preliminary assessment of your sales potential and free initial advice on how to successfully enter the marketplace(s) of your choice.
Kristina is Head of Business Development at Sermondo, the largest global intermediary platform for Amazon services. It’s her mission to help Amazon sellers grow their business internationally by connecting them with the right service providers from all around the world. Her passion is creating content that educates sellers on how to successfully establish B2B relationships and interviewing different Amazon experts for the Sermondo Talks podcast.