Brexit: Amazon FBA Stops Inventory Transfers Between EU and UK – What Sellers Can Do!
The United Kingdom left the European Union on January 31, 2020. The effects have so far been limited. This is partly because, although the UK has formally exited, it continues to apply EU rules. However, this transition period will end with the close of 2020. From January 1, 2021, the paths will separate definitively. Ideally, there should be an agreement by then that regulates the future relationship between the United Kingdom and the EU. However, whether a common ground can actually be found within a few months is questionable. 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 stops all inventory transfers within the Pan-EU program. This means that not only British sellers could lose access to the European Amazon marketplaces, but German and other European sellers may also face potential issues selling their products across the new customs border to the UK and Northern Ireland.
Until now, sellers could face Brexit relatively calmly thanks to the Amazon FBA and Pan-EU program. In this setup, the seller sends their goods to any European logistics center of Amazon. Subsequently, the e-commerce giant takes care of shipping, customer service, and more, as well as 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 goods from British sellers to the EU or items from European sellers to the United Kingdom. These changes have far-reaching implications, as companies can no longer utilize the extensive logistics network of the online giant. This means:
What Companies Can Do Now
To minimize the impact of Brexit on their Amazon FBA business, sellers should start preparing changes to their operations now. The simplest way to prevent upcoming issues is certainly to deactivate the Amazon UK marketplace. However, this is likely 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 EU and the UK after Brexit without using the European Fulfillment Network:
Both solutions share the fact that in the future, the marketplace seller will be responsible for transporting the goods across the new customs border and must comply with all legal requirements. This may include 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 VAT regulations, remain unresolved.
Whether and when after Brexit the Amazon FBA or Pan EU program will be available for the UK is still completely uncertain and should be doubted at this time.
Image credits in the order of the images: © tanaonte – stock.adobe.com / © FrankBoston – stock.adobe.com
