One of the key things that sets Amazon apart from competing marketplaces is its FBA, i.e. Fulfillment by Amazon, sales model. It relies on vendors shipping their inventory to Amazon’s […]Read in: 6 min
What are the advantages and disadvantages of the Pan-European FBA?
- Last update: 20.10.2022
- Published: 12.05.2020
- Read in: 5 min
Pan-European FBA is one of the options available to use the Fulfillment by Amazon.
Apart from the fact that Amazon takes over the whole process of storing and shipping goods, it also has the possibility of products between warehouses throughout the European Union.
What is the Pan-European FBA?
Shipment of goods
As in the “standard” FBA model, it is necessary for the seller to send goods to one of Amazon’s warehouses. From this point on, the logistics of the products rests with Amazon.
Location of goods
In this model, Amazon decides in which warehouses and countries the seller’s goods will be stored. Amazon optimizes the placement of products so that they are as close as possible to potential buyers. This reduces delivery time to buyers as much as possible.
Replenishment of stocks
In this model, Amazon monitors the quantities of products in individual warehouses. In the event that an item is missing in one place, Amazon completes the missing items by sending them from another distribution center.
Complaints and returns handling
Amazon will also take care of any complaints arising from shipping problems and returns. Returned goods are sent to Amazon’s warehouse, where employees are responsible for collecting them and taking them back to the warehouse.
Read more about how to sell your products all over Europe on Amazon.
What are the advantages of Pan-European FBA?
Shorter delivery times to customers
In the Pan-European FBA model, Amazon optimizes the distribution of products between warehouses so that delivery time to the customer is as short as possible. The estimated time of delivery is very important when making purchasing decisions.
Reaching out to Prime service customers
It is estimated that Amazon has more than 60 million Prime users who shop more and more often thanks to this service. Using the FBA model allows you to mark your products as Prime, which significantly increases the chances of the buyer choosing your products.
What are the disadvantages of the FBA Amazon model?
The obligation of VAT registration in Pan-EU
VAT registration, regular returns and payment of VAT is mandatory in the countries from which Amazon sends your goods. Due to the fact that in this model Amazon can freely transfer goods between its warehouses within the European Union, registration is required in all Pan-EU countries.
Due to reporting obligations in several countries, the vendor must carefully control the volume of sales and the costs incurred by them.