Why Import to Amazon UK in 2023?

If you’re one of the many third party sellers enjoying success on Amazon US right now you’ve probably considered expanding your mini-empire internationally at some point. Considering how easy Amazon make it to showcase your products around the world it would be silly not to.

Amazon DE and UK make up two of Amazon’s three largest markets and together the whole of the EU is far greater than any other single marketplace. You can take advantage of the EFN which is the European Fulfilment Network which allows you to fulfill all your EU orders from a single location.

So import to the UK and let Amazon do the rest.

Importing into the EU isn’t all plain sailing however so here’s a few key points importers should keep in mind.

VAT

This is maybe the hardest part of the process for foreign sellers to understand although if you’re familiar with sales tax in the US then you may have a head-start in figuring it all out.

As a foreign seller you must register to pay VAT yourself as well as collect VAT from your customers on all sales. For the UK it’s a flat rate of 20% but it varies depending on the individual EU country. Once you register you’re responsible for filing VAT reports and issuing VAT receipts to customers.

At the point of entry into the EU you will pay Import VAT on the total value of your goods plus shipping.

You must also charge 20% VAT on any sales to customers in the UK which you will collect and pay to UK HMRC. This is added to the final sales price for example if you sell an item for £10 you will pay £2 of this to HMRC when you submit your taxes.

You will be able to claim back VAT paid in the UK, so for example, the 20% you paid upon arrival of your goods and the VAT you will be charged for Amazon’s services will be deducted from your total payment upon filing your VAT reports.

Click here for a free consultation from a UK based professional or find Amazon’s information here.

Customs Duty

This is payable on imports of most goods whose value including shipping is over £135. The rate will differ depending on the class of goods and you can calculate the exact amount with this handy duty calculator or look for more detailed information from HMRC (Her Majesty’s Revenue and Customs).

European Fulfillment Network (EFN)

Once you’ve registered for VAT and imported your goods to Amazon’s FBA fulfillment centres in the UK you can take advantage of the EFN which covers also Germany, France, Italy and Spain. Amazon will helpfully list your items on all the EU marketplaces and handle the European fulfillment for you allowing you to exponentially increase your sales.

Thankfully if you’re selling in the other EU countries you won’t have to go through the VAT process again in each individual country until your annual turnover exceeds the VAT Threshold for that country (eg: €100,000 for Germany). You simply charge the same rate for EU sales as you would for your UK ones. Once your turnover exceeds the threshold for the respective country then you will have to register in that country for VAT and charge the local rate.

Is it worth my while?

Whilst the potential rewards of selling across the EU with Amazon’s EFN are huge, you must look at the numbers carefully to ensure you can remain competitive after all your costs are taken into account. Check out the relevant FBA Profit Calculator to see your profit margins and remember the following considerations:

• Import shipping fees.
• Import duty which is usually around 2.5% or use the duty calculator for accuracy.
• Take 20% off the final selling price to account for VAT.
• Remember accounting fees if you’re going to use a specialist for your UK and EU VAT files.

You may decide to export your goods directly from the US to EU customers on Amazon however you must remember that your buyer will then become responsible for any duty and VAT. They may be unaware of this and so get a nasty shock when buying from you. Also the customer is going to have to pay an expensive premium so your volume is likely to be lower than if you fulfilled orders from the target country.

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Step by Step to get started Importing to Amazon UK and Europe

1. 1. Register with HMRC to pay VAT and obtain a VAT number. It’s important you do this before you try to open an amazon seller account in the UK as you’ll be asked for your number upon registration. If you are an International seller then this is a MUST from day one.
   2. Next go ahead and register for your seller central account in the UK or chosen marketplace. You’ll need your tax information, such as an EIN for sellers in the US and a bank account in an amazon supported country and currency.
   3. Apply for your EORI (Economic Operator Registration and Identification) number. You’ll need this on your import documents and to communicate with any EU customs officials.
   4. Now you’re ready to work with a freight forwarder to import your goods into Europe. Just be wary here that Amazon will not act as the consignee or importer of record for your goods. Any goods arriving with Amazon’s name on the declaration or with unpaid duty may be automatically returned to sender or held up in customs and incur heavy charges.
   5. Also remember to think through your returns policy as customers are not going to send goods back to the US or your home country. This can be taken care of by Amazon, however, then you have little control over what happens to your returned inventory.

We have partnered with a UK TAX ADVISOR who offers a FREE CONSULTATION to advise you of VAT and Tax requirements.

Click for a NO OBLIGATION CONSULTATION CALL.