August 14, 2020

The Impact of Brexit on Amazon FBA: Preparing as the Deadline Approaches

The deadline is quickly approaching for the end of existing arrangements between the European Union (EU) and the United Kingdom’s utilization of the European Fulfillment Network (EFN) for Fulfillment by Amazon (FBA) orders. It is not exactly clear what will happen when the customs border forms between the United Kingdom and the EU. Negotiations are ongoing between both parties, who are working to decide what tariffs, if any, will be imposed by the customs border. Those utilizing international shipping will be required to add-in the additional tariffs if any are imposed.

Amazon UK released an announcement regarding Brexit, and the impact it would have for the Amazon Selling Partners effective January 1, 2021. Significant changes are coming in terms of using Amazon and how orders will be fulfilled by distribution centers across the UK and the EU.

  • Offers that are considered FBA using the EFN will not be fulfilled across the UK and EU border
  • The Pan-European economic union will stop the FBA inventory transfers between the UK and the EU. The transfers within the EU will continue to support the sales for Germany, France, Italy, and Spain sales sites.
  • For FBA business owners: Consider splitting inventories and sending to fulfillment centers in both the UK and the EU to mitigate the impact. Having sufficient stock in both border sites will help facilitate sales to both areas.
  • Products that require shipment across the new border may require additional information as part of the customs declaration.

For the current EU sellers and those outside of Europe, their inventories will be handled similarly. Sellers will need to split their inventories between EU sites and Amazon’s warehouses in the UK if they plan to continue selling to UK customers.

Navigating the EFN and Pan-European FBA

The EFN allows for sellers to fulfill their orders from any of Amazon’s European marketplaces while shipping goods to a fulfillment center within one country. When the deadline happens, orders currently in the Amazon UK warehouses will no longer be used to fulfill the EU orders. Sales opportunities for Amazon UK is dropping from 446 million consumers in the EU to 66 million in the UK.

With the Pan-European FBA, products are sent to fulfillment centers within the UK, where Amazon then distributes them for storage across the European continent. These products are Prime eligible, making them visible to millions of customers. Prime eligibility provides faster delivery to customers, but businesses only pay the fulfillment fees for the UK.

Unfortunately, Brexit means the end of the Pan-European FBA and the EFN for those merchants in the UK. The only way to efficiently sell their inventories will be to split them between the UK market and the EU market. As a freight forwarder, plans will have to be made in advance where products are to go.

Even though Amazon FBA has released the effective date of January 1, 2021, for the changes, they will likely begin effecting some well before this date. For the sellers in the UK, Amazon will likely stop sending the stock to the European markets earlier than January 1. It is possible that by Christmas, maybe sooner, the European sales numbers will start to decline.

ExFreight is aware of the potential shipping problems that may result from the changes to the FBA process in Europe and the UK. As more information develops, ExFreight will convey the news to shippers as soon as it is available, offering resources and freight shipping alternatives.

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