We’re hearing a lot at the moment about the opportunity of cross border trade (CBT) and how it can be a great growth opportunity for ecommerce SMEs. So it’s good to see how the marketplace channels are responding by developing new services and products to help grease the CBT wheels. And the latest news to catch my eyes is the Amazon’s Multi-Country Inventory (MCI) scheme.
It the latest global trading initiative to come out of Amazon and ChannelAdvisor have examined it and other useful services on their Amazon Strategies blog. For people already trading on Amazon, especially using FBA, will want to take a closer look.
As the post says: “MCI will help you reduce your fulfillment costs and increase conversion rates for products sold outside your home market. With MCI, which is based on Amazon FBA, you can now designate and locate your products in the FBA facility closest to your customers.”
Is anyone already using the service with success? Or indeed not? :o)
9 Responses
Hi Dan,
Mixed results with EFN, the thing is that one needs to be really careful with the amounts being paid.
See the pricing here https://services.amazon.co.uk/services/fulfilment-by-amazon/pricing.html and expand the “Selling internationally: European Fulfilment Network (EFN)” section.
If you consider that you’re most likely to receive a sale from Amazon.de and if you’re fulfilling from the UK, that’s 2,10€ out of your margins.
On the 60€ camera example that’s about 3%, on a camera case, you’ll have wiped out all the profit.
Fab service to see what will sell, but generally far better off fulfilling locally for the more popular products.
Matt
People need to be careful with FBA overseas- remember that there are no threshold levels for overseas VAT if you store the stock overseas- – meaning if Amazon store your stock in France or Germany for example you are liable to register for their VAT from the word go… This is something I learn from one of the Amazon sessions -but not widely advertised
Sellers need to be very wary about this unless you still have tasty margins to play with.
The other issue that needs to be carefully priced in as well are the costs of dealing with returns and support for faulty items.
Cultural differences between the UK and Germany can make for some interesting differences in expectations and that will probably get reflected in your feedback as well.
Tread carefully and try a limited experiment if your products are suitable (and many are not).
We reckon France & Spain are more attractive than Germany but it is seller specific.
Amazon fba show you the costs in your inventory screen, but these are not the true costs and beleive this is false advertising. They don’t include the cross border trade fee which they somehow seem to leave of all their fees statements. You only see it if you go into a european amazon site, click into a specific order and view the breakdown of charges for that item. It’s around an extra 2 euros on top of all the other fees. There are so many UK sellers selling at a loss on EFN just because have not calculated all fees, and exchange rates correctly.
Similar experiences to other replies re hidden costs. The advice to take small steps is good. Overall, some good and some bad experiences.
When an Amazon customer reserves (add to basket) and FBA item, the inventory level is decreased in Seller Central but the Amazon API does not make this data available to your channel software. To avoid penal cross border fulfillment fees, I have to check inventory levels in both local and non-local marketplaces once a week (xsheet exercise) and over-stock. Or if I can’t replenish non-local stock in time I have to change the non-local price to cover the cross border fulfillment fee – again manual. Products must be linked (as you’d expect) but individual marketplace inventory levels are not available (without daily inv history report) – even with different SKUs the inventory levels are merged by ASIN. The alternative is to create new unlinked products (requiring 15c Amazon labels) which will never be used to fulfill cross border orders – which defeats the purpose.
After making lost of mistakes, great way to learn fast :), my plan is to send only best sellers abroad. I don’t begrudge Amazon charging for shipping from one country to another to fulfill an order (and make a sale I would not have made otherwise) but the fees are penal and do not reflect costs. If I make a sale, they should be happy with the commission and fair costs.
I do want to develop the international business but will do it outside FBA for most products if I can. I believe the principle of success of all our business, esp international business, is to sell a little (% of marketplace punters) to a lot (number of marketplaces and their punters). I therefore cannot tie up my full range in multiple Amazon warehouses – this duplicates stock, overhead, mgmt, fees – at least not while I’m paying at levels that contribute to only one new profit centre (my partner’s, not mine).
I have another gripe and maybe Tamebay readers can help me here. I want to sell my FBA products to all countries where Amazon will ship. However, I have products that are FBM (where Amazon fees are too high, eg oversize) – I cannot pick and choose delivery countries or charges by product differentiating for FBA and FBM products and reflecting my FBM delivery costs. So what do I do? Do I raise product prices and offer free local shipping – the increased product price may cover export dlvy costs? Do I create duplicate listings as separate products (eg give a different EAN – I believe not allowed) and list on various non-local various Amazon marketplaces and fulfill to all countries where Amazon ships? Don’t know if I can!
At the end of the day, outside some best sellers, EFN and International selling on Amazon is mainly for very high margin products. That said, our customers shop around so why not fulfill it yourself through another channel and keep your margin?