The Amazon FBA Brexit bombshell has dropped which will significantly impact your Amazon business from the 1st of January 2021. Amazon’s UK FBA operations will be split from the EU with no more EFN (European Fufilment Network) and an end to Pan-European FBA inventory transfers between the UK and EU.
Amazon FBA Brexit Bombshell 1 – EFN
EFN allows you to fulfil orders from any Amazon European marketplace, while you ship your goods to Amazon’s fulfilment centres in just one country such as the UK.
From the 1st of January 2020 goods in Amazon’s UK fulfilment centres will no longer be used to fulfil orders in Europe. Effectively your sales opportunity from selling on Amazon UK dropped from 446 million EU consumers to 66 million brits.
Amazon FBA Brexit Bombshell 2 – Pan-European FBA
Currently, with Pan-European FBA, when you send your products to fulfilment centres in the UK, Amazon distribute them for storage across Europe. Your products become Prime eligible and visible to millions of customers, with faster delivery while you pay only UK local fulfilment fees.
This will end for stock in Amazon UK warehouses on the 1st of January 2021. However if you send stock to an Amazon warehouse in Europe then it will still be distributed to other European warehouse, with the exception that it won’t be sent back to the UK.
The difference between EFN and Pan-European FBA
EFN is effectively keeping your stock in the UK and picking up the shipping cost when you get an international sale. Pan-European FBA means only paying local shipping charges but Amazon can move your stock out of the UK into Europe so that it is closer to the end customer and can be fulfilled quicker.
EFN is an easy way into international selling whereas Pan-European FBA will generally involve having higher levels of inventory. Ending both of these programs for UK merchants means if you want to sell into Europe you will have to split your stock, send some to FBA in the UK and some to FBA in at least one other European country.
Whilst Amazon say that the changes will apply from the 1st of January 2021, in reality you might find impacts of the Amazon FBA Brexit bombshell start to impact you earlier. For instance, if you already have stock in Pan-European FBA it is feasible that Amazon will repatriate your stock before the end of the year and certainly are likely to stop sending your stock to Europe at an earlier date. This means that certainly around Christmas, perhaps sooner, your European sales will start to decline.
Definitely, from the 1st of January 2021, if you do nothing then the full impact of the Amazon FBA Brexit bombshell will be a complete cessation of your European sales.
The logistical impact will be a higher barrier to entry to selling on mainland Europe from the UK. If you want international sales from Europe then you will be forced to split your stock (which will probably mean higher inventory holding and additional costs) and send part of your stock to a warehouse in Europe (with the associated additional shipping costs compared to the UK).
Note for German, French, other EU sellers and for sellers outside Europe
A heads up for merchants based on mainland Europe, your stock will be treated similarly and if you want to continue to sell to UK customers after the 1st of January, you too will have to split your stock and hold some in Amazon’s UK warehouses.
If you are a seller from outside Europe, perhaps selling into Europe from the US or China, you will also need to split your stock into European mainland stock and UK stock and send to at least two Amazon FBA warehouse – one in the UK for selling to UK customers and another on the continent for selling to mainland Europe.
Full Amazon FBA announcement
“On January 31, 2020, the UK left the EU and entered a transition period where existing arrangements are being kept in place until December 31, 2020. The UK is due to formally leave the EU’s Single Market and Customs Union from January 1, 2021.
While UK-EU negotiations are ongoing (including determining what tariffs, if any, will apply), from January 1, 2021 there will be a customs border between the UK and EU which will have an impact on businesses working across this border.
This will have the following impact for Amazon Selling Partners from January 1, 2021:
- FBA offers using EFN will not be fulfilled across the UK-EU border.
- Pan-European FBA inventory transfers will stop between the UK and EU (however, Pan-European FBA will continue to transfer inventory within the EU region, supporting your sales on Germany, France, Italy and Spain sites)
- To mitigate the impact of these changes, you should consider splitting your inventory and sending it to a fulfilment centre in the UK and the EU, so that you have sufficient stock either side of the new customs border
- This may require you to ship your products across the new UK-EU customs border and provide additional information as part of a customs declaration
Your Amazon business will continue to operate as usual until January 1, 2021. However, there are actions you can start taking now to prepare your business for the new customs borders. For information about how you can prepare for these changes, and for all of the latest information about Brexit, please see our BREXIT guidance help pages and the UK government website.
Thank you for selling on Amazon. We remain committed to supporting your business selling in the UK and in the EU as we make this transition, and we will continue to provide the latest information to support you and help your business thrive in the future.”