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What are the advantages and disadvantages of the Pan-European FBA?

Publication date: 12.05.2020

Pan-European FBA jest jedną z opcji dostępnych w ramach korzystania modelu Fulfillment by Amazon. Oprócz tego, że Amazon przejmuje cały proces związany z magazynowaniem i wysyłką towarów, to dodatkowo ma możliwość produktów pomiędzy magazynami w całej Unii Europejskiej.

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.

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.

Adam Grabiński