Table of content
👉 Why it can be a hassle
👉 5 general tips for European expansion
👉 Best practice
👉 Additional benefits with SPACEGOATS
Why it can be a hassle
Expanding your Amazon business to the European marketplaces comes with a couple of hurdles. There are a few things that need to be taken into account. Certifications, different legal situations, responsible address, language barriers and much more. Today, I would like to share three of the biggest hurdles sellers face when expanding within Europe or into Europe's marketplaces.
👉 Tax processing
Even though the EU is unifying Europe more and more, it is still an enormous effort to handle taxes properly for the different marketplaces. The fact that the UK has left the EU does not make things any easier.
👉 Marketplace quantity and diversity
Amazon has nine different marketplaces within Europe. Each of these marketplaces is in a different language. Therefore, the additional effort that arises from diversity should not be underestimated. This includes, for example, listing translations or end customer support in the respective national language.
👉 Compliance guidelines
The amount of different Amazon marketplaces within Europe also increases the amount of compliance guidelines. Different country, different customs, different rules. Every product has to go through a compliance check for every marketplace.
5 tips for European expansion
In your own market, the competitive situation is usually already consolidated. Due to the large selection of countries, you will find very different competitive situations in other EU countries, which makes entry into potential markets easier. Conveniently, the ratings acquired in the home market can also be taken to other European countries.
For a meteoric start, we recommend paying special attention to the following topics:
Product compliance
The EU single market already simplifies international trade a lot, although not all laws are synchronized between the participating countries. A product that is marketable in one country/marketplace does not necessarily have to be marketable in other EU countries. Possible stumbling blocks include compliance with product labelling obligations, trademark registration (EUIPO) or the topic of EPR (Extended Product Responsibility), which has been present since 2022. First check, then sell!
Tax compliance
Storage in Germany (EFN) or directly abroad (PAN EU or MCI)? No matter which you choose, there will be VAT homework to do. EFN has the advantage that you "only" have to register for the OSS system and can report your foreign sales via a central office. However, you pay the transnational shipping costs with higher shipping times. Due to local storage, you also have to register for VAT in each country of storage, but this gives you the advantage of significantly lower shipping costs and shorter delivery times. Think about this before you start selling internationally.
Content
You should not save on content in the wrong place. We recommend translations optimized for Amazon SEO for the launch so that the right course is set for the algorithm right from the start. In the meantime, translated images can also be displayed. For the launch, you should definitely check the indexation of your foreign listings, as technical problems often occur here. Adding a search path sometimes helps.
Small and Light PAN EU
For small and light items, the Small and Light program can also be combined with PAN EU. In this way, you can save additional costs that would be incurred with pure PAN EU use. However, registration does not happen automatically, but must be actively initiated.
Rule of thumb for diversification
From a revenue share of 30% on other channels, your business is considered diversified. This has a positive effect on your multiple and thus on the value of your company. If you are planning to sell your business, you should consider this point or even optimize it.
Best Practice
The fastest way to sell throughout Europe, which also involves the least administrative effort, is SPACEGOATS.
Two things in advance:
- No tax registration necessary
- No bank account in Europe necessary
… but more about the advantages later. The following four steps describe how SPACEGOATS quickly and successfully brings their customers' products to the European market.
Step 1 - Market potential analysis
In the first step, SPACEGOATS takes a closer look at your products and analyses their potential for the different marketplaces. A product with a high potential on the UK marketplace doesn’t have to be lucrative on the German marketplace. At SPACEGOATS you also have the possibility to get analysed which certifications, warnings and other legal requirements are necessary for the sale of the products in the different countries.
Step 2 - Financial planning and an expansion roadmap
In the second step, SPACEGOATS creates a roadmap for the expansion across Europe. This includes things like production quantities, cost planning, service descriptions, all the necessary certifications and the steps to be taken. Experience and maths show that long delivery times, as well as low margins, extremely influence the time at which you have your invested capital completely back. The buzzword here is 'cash conversion cycle'. Here’s an example:
Imagine you have a product with €5 CoGs. The following table shows how the delivery time and margin affect your cash conversion cycle. Most interesting is the big effect that the delivery time has.
Your supply chain infrastructure, as well as focusing on the high-margin products, is therefore advisable.
Step 3 - Roadmap implementation
The best plan is useless if it is not implemented. For this reason, you move into implementation in this step. Obtaining certifications, transmitting product data, clarifying logistics, and onboarding to the Galaxy software that SPACEGOATS offers. Since you sell your products through the SPACEGOATS Amazon account, you only need an account here, and you get a control center for your sales on Amazon in Europe.
Step 4 - Growth phase with optional help of consulting and tools
The fourth step is to monitor your products on the respective marketplaces and optimize them on the go. At SPACEGOATS, you can make regular appointments with one of the Customer Success people to get the best possible support and achieve the best results for your business. In addition, it becomes relevant here to address other issues identified during steps 1 and 2. These could be the additional own-brand Shopify shop or sales in offline retail shops.
Additional benefits with SPACEGOATS
As I mentioned before - and this is especially interesting for all non-European companies - you do not need any tax registration or bank account in Europe when selling your products through SPACEGOATS. But there's more! Let me list a few basic benefits you get by selling on Amazon through SPACEGOATS:
👉 PPC Automation
PPC automation with BidX. SPACEGOATS is perfectly linked to BidX and gives you as much control over your PPC as you want. Analyse the most important numbers for your PPC campaigns directly in the Galaxy. Work directly in BidX to manage your campaigns.
👉 Proactive Service Level
The SPACEGOATS Customer Success Team will take care of your needs. Strategic alignment, recommendations and many other services will help you achieve the best results.
👉 Strategic Account Services
As SPACEGOATS is part of the Strategic Account Services program that Amazon offers, you benefit too. You get access to exclusive beta programs, premium support and troubleshooting for complex problems.
👉 Extended Product Responsibility
Amazon regularly sets new requirements for product compliance. SPACEGOATS takes care of the packaging registration (outside Germany) and WEEE for you.
👉 Shipment Automation
Long shipping times can be a huge issue when entering new markets or even continents. With SPACEGOATS’ pre-FBA inventory solution, you ship as many products as you like to their 3PL partner and the FBA inventory will be refilled automatically.
👉 EU Representative
SPACEGOATS offers to act as your EU representative for your merchandise, products and so on and as the first point of contact for the Market Surveillance Authority.
👉 Responsible Persons Address
SPACEGOATS offers you to be the distributor of your goods in the EU and to act as the responsible person.
