Brexit and Amazon UK: FBA stops inventory transfers between EU and the UK – What sellers can do!
The United Kingdom left the European Union on January 31, 2020. The overall impact of this decision is still minimal. This is partly because the UK has already formally left, but continues to apply EU regulations. However, this transitional phase will end at the end of 2020, and on January 1, 2021, both sides will take their separate ways. In fact, there should be an agreement by then that will determine the future relations between the United Kingdom and the EU. But it is doubtful whether a common denominator can actually be found within a few months. And Brexit's consequences are also being felt by Amazon FBA companies selling internationally - both British and EU companies.
No more stock will be transfered after the Brexit: Amazon FBA stops all transfers
As of January 01, 2021, Amazon stops all stock transfers within the Pan EU programme. Not only could British sellers lose access to the European Amazon marketplaces, but German, French, Spanish, and other European sellers could also face potential problems selling their products across the new customs border to Great Britain and Northern Ireland.
Until now, sellers have been able to take a relatively relaxed position towards Brexit thanks to Amazon FBA and Pan EU programmes. In this programme, sellers send their merchandise to any of Amazon's European logistics centres. Afterwards, the e-commerce giant not only takes care of packaging, shipping, and customer service, but also the demand-oriented distribution of the products within the European Union.
But following the exit of the UK from the EU, Amazon will also stop the service for FBA products and will no longer transport the merchandise of British sellers to the EU or, vice versa, the items of European sellers to the UK. These changes have far-reaching consequences, as companies will no longer use the online giant's extensive logistics network. This means:
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What companies can do now
In order to minimise the impact of the Brexit on their Amazon FBA business, sellers should start preparing changes in their operations now. The easiest way to avoid future problems is certainly to shut down the Amazon UK marketplace. However, for many sellers this is probably only the worst solution, especially if a certain amount of sales is generated on amazon.co.uk.
The e-commerce giant is proposing two further solutions to be able to sell through Pan EU program as well as in the UK after the Brexit without the need of using the European shipping network:
- 1The shipment of products by the seller directly to an Amazon logistics centre within the United Kingdom. However, this also means that sellers have to split their stock. Items that are stored in the EU or in the UK will no longer be available for orders from the other location.
- 2The own dispatch of orders by an external distribution service provider via FBM. With this approach, the question arises, particularly in the case of merchandise, to what extent the loss of FBA status and the Prime logo influence the chances of winning the Buy Box.
How will Brexit affect Amazon FBA sellers?
It is uncertain to what extent Brexit will affect Amazon UK sellers. Both solutions have in common that in the future of the UK marketplace the seller will be responsible for bringing the merchandise across the new customs border and must therefore also comply with all legal requirements. This may include, for example, a valid VAT identification number for the United Kingdom, EORI numbers or certain licences. The specific requirements that need to be fulfilled also depend on whether or not there will be a trade agreement. Many things, such as the regulations on value added tax, have not yet been clarified.
The question of whether and when the Amazon FBA or Pan EU programme will also be available for the UK after Brexit is still completely uncertain and may be called into doubt at this point in time.