Brexit: Amazon FBA stops inventory transfers between the EU and the UK – Here’s what sellers can do!
The United Kingdom left the European Union on January 31, 2020. The effects are still limited. This is also because, although the UK has formally exited, it continues to apply EU rules. However, this transition period ends with the end of 2020. From January 1, 2021, the paths will separate definitively. In fact, there is supposed to be an agreement by then that regulates the future relations between the United Kingdom and the EU. However, whether a common ground can actually be found within a few months is doubtful. And the effects of Brexit are also being felt by Amazon FBA businesses that sell internationally – both British and those from the EU.
No inventory transfers after Brexit: Amazon FBA stops transfers
Effective January 1, 2021, Amazon will stop all inventory transfers within the Pan-EU program. This could mean that not only British sellers lose access to the European Amazon marketplaces, but also German and other European sellers may face potential issues selling their products across the new customs border to the UK and Northern Ireland.
So far, sellers could face Brexit relatively calmly thanks to the Amazon FBA and Pan-EU program. In this case, the seller sends their goods to any European logistics center of Amazon. Subsequently, the e-commerce giant takes care not only of shipping, customer service, and more, but also of the demand-based distribution of goods within the European Union.
However, after Brexit, Amazon is also stopping this service for FBA goods and will not transport the goods of British sellers to the EU or the items of European sellers to the United Kingdom. These changes have far-reaching consequences, as companies can no longer utilize the extensive logistics network of the online giant. This means:
Here’s what companies can do now
To minimize the impact of Brexit on their own Amazon FBA business, sellers should start preparing changes to their operations now. The simplest way to prevent the upcoming issues is certainly to shut down the Amazon UK marketplace. However, this is likely to be the worst solution for many sellers, especially if a certain percentage of revenue is generated on amazon.co.uk.
The e-commerce giant suggests two additional solutions to sell in both the Pan-EU and the UK after Brexit, without using the European Fulfillment Network:
Both solutions have in common that in the future, the marketplace seller will be responsible for transporting the goods across the new customs border and must also comply with all legal requirements. This may include, for example, a valid VAT identification number for the United Kingdom, EORI numbers, or certain licenses. The specific requirements that must be met also depend on whether there will be a trade agreement or not. Many issues, such as the regulations regarding VAT, remain unresolved so far.
Whether and when after Brexit the Amazon FBA or Pan-EU program will also be available for the UK is still completely uncertain and should be doubted at this point in time.
Image credits in the order of the images: © tanaonte – stock.adobe.com / © FrankBoston – stock.adobe.com
