our step-by-step guide to expanding your amazon business into europe welcome!

Our Step-By-Step Guide To Expanding Your Amazon Business Into Europewww.marketplacesuperheroes.com

WELCOME!


How To Double Your Amazon Business By Selling Your Products In Europe


WHO ARE WE?


THE EUROPEAN OPPORTUNITY Over 200 million European Amazon customers

5 countries – Germany, France, Italy, Spain &

UK

Example: Amazon.de => over 24m uniques


THE EUROPEAN OPPORTUNITY Developing marketplace

Fewer sellers using FBA, fewer product

choices


DOES IT MAKE SENSE? Almost identical market size

No new products required*

One account to rule them all


DOES IT MAKE SENSE? One stock source to rule them all

One set of procedures to rule them all too


IMAGINE… No new products

No new suppliers

No new systems

…all from just one new account


Section 1: The European Expansion Roadmap A-Z


BEFORE WE START…LET’S BUST SOME AMAZON MYTHS


AMAZON MYTHS…BUSTED VAT?

Invoices needed for EVERYTHING?

Expensive?


AMAZON MYTHS…BUSTED Impossible Inventory?

Isn’t this just Global Export?

Lots of languages & currencies?


THE EUROPEAN EXPANSION PROCESSStart > Setup > Ship > Send > Sell > Save


THE EUROPEAN EXPANSION PROCESS

1. Set up a suitable business entity (Start)

2. Create EU Amazon account & EU listings

(Setup)

3. Ship products to a pre-Amazon location (Ship)


THE EUROPEAN EXPANSION PROCESS

4. Prepare & send FBA orders to Amazon (Send)

5. Products are sold across 5 countries (Sell)

6. Paid in the local marketplace currency (Save)


1. START Start a suitable business entity for Europe

Separate entity

Foundation for future growth

Tax structure

Business ready for scale


2. SETUP Create a Unified European Seller Account

Similar & simple

Sell across 5 countries at once

Single source inventory pool

One account to rule them all


3. SHIP Ship products from China / US (recommend: sea)

Send to pre-Amazon location

Customs / IOR (Importer of Record)

Inspect products (Unfulfillable)

Reduces ‘stranded’ units


4. SEND Units readied in pre-Amazon location

Prepare units based on created FBA orders

Ship to one Amazon marketplace

Use that stock to power all marketplaces


5. SELL Translate US listings into home marketplace

Localize dimensions & weight for each country

Recalculate sales prices

Monitor effect on profit

Scale to MCI in time


6. SAVE Paid in local marketplace currency

Currency may be converted

Potentially save on conversion with 3rd party

Multiple banks in multiple countries

Important if you plan to repatriate


THE EUROPEAN FULFILLMENT NETWORK


EFN (EUROPEAN FULFILLMENT NETWORK) The Unified European Account

5 layers – UK, DE, FR, IT, ES

5 separate seller accounts in one

Operate independently

One stock source


Think of it like this…


THE POWER OF ONE One business entity

One seller account

One inward shipment

One outbound stock source

One management approach


…And it’s all completely automated


IT’S EXTREMELY SIMILAR


It’s an ‘enhanced’ version of the FBA you know


Europe is an open playground right now


THE OPEN PLAYGROUND Ease of entry

Fewer sellers using FBA

Quality of listings & sellers – far lower

Entrenched sellers

Under developed markets


Multi Country Inventory


Section 2: Setting Up Your European Empire’s Structure


VAT – BASICS HMRC (UK Government body)

Differs to US style sales tax

Price shown to consumer – VAT included (if

applicable)© Johnson Kennedy DFK 2015


VAT – BASICS Value Added Tax – 20% in UK

VAT is generally higher than US style sales tax

© Johnson Kennedy DFK 2015


VAT PAYABLE EACH QUARTER = OUPUT VAT – INPUT VAT = VAT OWED



VAT – LLC VS LTD LLCs must register immediately with UK

Possible to save considerably on VAT threshold

How? Establish a UK business entity (LTD)

Can trade up to £81k in 12 months without reg.

requirement © Johnson Kennedy DFK 2015


VAT – LLC VS LTD LLCs must register in UK from the first sale

If using EFN – must register in every other country



EFN / MCI UK Limited company in place

Freedom of movement of goods within EU

Distance selling threshold(s) – UK to other EU states

Once breached > must register for VAT in each country



EFN / MCI VAT charged where goods are warehoused

(dispatched to customer)

LTD – use the EFN (distance selling thresholds)

LLC – must VAT register in each EU marketplace immediately

Once breached > must register for VAT in each country (MCI)© Johnson Kennedy DFK 2015


This is why an EU entity is VITAL



Section 3: European Currencies & How To Deal With Them


EUROPEAN CURRENCIES 2 main European currencies (£ & €)

UK > £ / DE, FR, IT & ES > €

Sales price, Amazon fees & settlements – local

currency

At settlement period – currency conversion can occur


AMAZON CURRENCY CONVERTER Converts local currency to bank account currency

On settlement period completion, performs

conversion

Sends converted amount to your bank account

automatically


AMAZON CURRENCY CONVERTER Conversion rate Amazon use – expensive

No control over the timing of the conversion


RECOMMENED ALTERNATIVE Third party – completely within Amazon TOS

Local bank account set up

Settlement is sent to local bank account (no

conversion)


CURRENCY CONVERSION WorldFirst - currency conversion provider

9 years experience

Specialize in cross border transfers


HOW IT WORKS Amazon charge 3.5% on the foreign exchange

Commerce Bank based in Germany

Barclays Bank UK

Unique & segregated accounts

WorldFirst add 1.5% to your bottom line profits


Section 4: Localizing Your Inventory For Europe


LOCALIZING INVENTORY1. Language

2. Product Packaging

3. Metric vs. Imperial System

4. Product pricing

5. Item specifics to avoid

6. Different fee structure


1. LANGUAGE US vs. UK differences

Professional translations are a must (www.translated.net)

Translation tool fine for customer services (if 100% FBA)

One off investment with insane ROI

Accounts can be managed in English

http://www.translated.net/


2. PRODUCT PACKAGING Language – not initially necessary

Short product title translated recommended

Aspire to a multi-language instruction manual

Country specific boxes not required

Tip: Dual faced packaging


3. METRIC VS IMPERIAL (SIZING) UK uses both – metric (cm, ml, kg) imperial (inch, fl oz, lbs)

EU uses metric only

Make sure that you localize both on your EU listings

Monitor sizing e.g. US shoe size vs. UK & EU shoe size /

Clothes sizes


4. PRODUCT PRICING Isn’t necessarily a direct conversion from US sales

price

Must be recalculated – origin surcharge*, fees & taxes

Monitor competition to check estimated sales price

Create new product price using our research tools


5. ITEM SPECIFICS TO AVOID Sizing (1m)

Multi box

Hazardous

Prohibited


5. ITEM SPECIFICS TO AVOID Over 30kgs (66lbs)

Electrical (plugs + lightbulbs)

Non compatible sizes (paper)

Cultural (cars)


6a. FEE STRUCTURES - DIFFERENCES Each country has a slightly different FBA fee

structure

Type of fees don’t change, it’s the values that do

Weight bands


6a. FEE STRUCTURES - DIFFERENCES Origin of goods may affect final sales price &

profit

EFN fee / MCI inward shipment fees


6b. FEE STRUCTURES - SIMILARITIES Amazon Seller Central account subscription fee

Sales referral fee

Pick & pack


6b. FEE STRUCTURES - SIMILARITIES Weight based fee

Handling fee

Storage costs


6b. FEE STRUCTURES - SIMILARITIES Standard size (imperial / metric)

Oversize fee (imperial / metric)

Returns policy

Reimbursement notifications


HOW TO MAKE SURE YOUR PRODUCT IS PROFITABLE IN EUROPE


PROFIT CHECKLIST1. Account for VAT regardless

2. Account for Amazon Referral fee

3. Account for Amazon FBA fees


PROFIT CHECKLIST

4. Account for shipping cost of goods from origin

to FC

5. Account for the product cost (FOB / ExWorks /

DDP)


LITTLE KNOWN COSTS TO MONITOR


POTENTIAL PROFIT KILLERS Not expanding into these markets

Launching with the wrong business entity

Not using EFN to build data


POTENTIAL PROFIT KILLERS Not knowing when to go MCI (VAT & Cost)

Using Amazon’s Currency Conversion


POTENTIAL PROFIT KILLERS Using poor, non-professional translations

(translation tools)

Not adhering to the product specifics to avoid

Not localizing your product’s sizing


POTENTIAL PROFIT KILLERS Directly converting US sales prices

Not incorporating the EU fees into your costs


POTENTIAL PROFIT KILLERS Overreliance on direct airfreight shipments

Not understanding & maximizing cbm

Avoiding the use of an EU freight hub


THIS LEADS US ON PERFECTLY TO DISCUSSING…LOGISTICS


Section 5: Shipping Your Products To Europe (The Right Way)


2 MAIN ROUTES:1. China to UK / EU2. USA to UK / EU


CHINA TO UK / EU LOGISTICS PROCESS1. Goods are consolidated in China

2. Shipped from dock to UK / EU

3. Documents required. Matched & married.


CHINA TO UK / EU LOGISTICS PROCESS4. Goods arrive at docks in UK / EU

5. Documents submitted to customs and excise

6. Release notes for taxes & duties


CHINA TO UK / EU LOGISTICS PROCESS7. Shipping line releases goods

8. Transported to UK depot

9. Inspected thoroughly


CHINA TO UK / EU LOGISTICS PROCESS

10. Labeled & prepared for Amazon

11. Delivery booked & completed for Amazon


A - OriginB – Destination

C – Hub / DepotD – Amazon

FROM FACTORY TO FULFILMENT

EVERY ASPECT OF THE ORDER COMPLETE


USA TO UK / EU1. Similar to previous process – some differences

2. Same documentation as before

3. Goods will travel from East Coast USA to UK

4. Arrival & delivery to Amazon process = same as

China to UK


Section 6: Managing Your International Amazon Business


WHAT TO MANAGE?1. Stock across multiple countries

2. Ordering for multiple countries

3. Inward & outward cash flow


WHAT TO MANAGE?4. Reporting on the business

5. Accounting for the business


1. STOCK ACROSS MULTIPLE COUNTRIES Start to build run rates for every product in every country

Need to know key product metrics

Origin

Production time (if applicable)

Transit time

Frequent stock monitoring


2. ORDERING FOR MULTIPLE COUNTRIES Order regularly in a controlled manner

Systemized approach & prioritize

Maximize cbm size while considering the run rate

Make sure to have correct documentation (2 x PIs)


3. INWARD & OUTWARD CASHFLOW Multiple flows of cash – monitor when & how much

Using RVF to predict the future company cash

position

Knowing when & if an order can be done


4. REPORTING ON THE BUSINESS Sales reports across each country

Sales > Volumes / Values / Profits => run rates =>

forecasting

Stock across the globe – quantities, costs & RVFs

OPCs – where have you missed out


5. ACCOUNTING FOR THE BUSINESS Liaise with our accounts team

You’ll need:

Sales & stock value reports / refunds reports

Purchase invoices / receipts

Bank statements

Any other relevant information


LET’S TAKE A LOOK AT HOW ALL THIS WORKS WITH OUR

RESEARCH TOOL

our step-by-step guide to expanding your amazon business into europe welcome!

Documents

amazon germany

current amazon business

figure business

european sellers

fewer sellers

amazon related figures

stepbystep guide

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