It’s the final week on the blog this year as Christmas is just around the corner! I’m sure many of you are already in the holiday mood and don’t want to spend much time on business. Despite this, sales right now are reaching new records every day as the last few weeks before Christmas is a real shopping bonanza on Amazon! I have personally achieved phenomenal sales in December, but more on that in the new year.
It has been a few months since I expanded my Amazon FBA business to Europe via the Pan-EU program. So far, I have covered my results for these markets:
The last one on the list is Spain! I must say that, surprisingly to me, Spain has performed the worst out of all four marketplaces. When I first started the process, I had high hopes for the Spanish market as I thought it would be a more active marketplace—especially knowing how many expats are living there, etc. As it turns out, that’s not the case. Well, at least not for my products because Spain hasn’t performed as well as expected.
Before we get into actual sales numbers, there’s one important thing I want to mention. When you register for VAT in European countries, Spain is the most difficult one. Why? Because it’s the only country that requires registration documents to be notarised AND Hague Apostilled.
When I started this process, I even didn’t know what the Hague Apostille was! Turns out, it’s a “stone-age-old” system where foreign documents are verified in a specific way by a notary. It’s mostly used for official/government documents, but Spain requires this verification for VAT registration documents.
This is the main reason why my VAT registrations were so delayed. While I got my German VAT certificate in the summer, I put off the Spanish registration to the last minute. In the end, it was not that bad or complicated, so I should have just done it earlier, but the fact remains the same: you will need to have your documents go through the Hague Apostille process for registration in Spain.
The mistake I made is that I used a local notary, which only complicated the whole process even more. I later found out that people are using this online service, which is much cheaper and quicker.
Basically, you can mail them your documents and receive them back within a few working days.
I highly recommend you use a service like this instead of going through your local notary office because it will be much faster and cheaper.
Now, there’s another interesting thing worth mentioning about the VAT registration process in Spain. Unlike other countries, when you get your VAT number issued, it’s not automatically put into the VIES system. Spain asks you to do backdated returns before that happens.
Now, as my application date was 1st January 2019, I have to do all the returns before my Spanish VAT number is published in the VIES system. I still haven’t finished this process. VATGlobal.com, the company that does my VAT accounting, promises that this will be handled any week now.
IMPORTANT!!! I have arranged a special deal with VAT Global for my blog readers. You will receive a special discount on the VAT registration and returns fees IF you mention this code when contacting them: ANDYVAT2020
Why is this important? Simply put, you can’t add VAT numbers in Amazon’s VAT invoicing system before they’re published in the VIES system. Well, you can do that, but Amazon won’t approve your number.
The problem is that until you can use the VAT invoice system on Amazon, you will have to create invoices on your own and send them out to customers who request them from you. In Spain, just like in Italy, I have found that many businesses are purchasing from me, so I’m frequently asked for a VAT invoice.
On average, I get at least one such request every day, and even though it’s not a huge task, it is an extra hassle. You know how it is. We’re used to complete automation on Amazon, where everything works seamlessly on autopilot, so when you have to manually create an invoice, it feels like such a hassle.
If you’re working with an accounting software on your own, you can use that to create those invoices. If not, here’s a good, free software you can use to create such invoices: Invoicely.com
I’m really looking forward to my VAT returns for 2019 being complete so I can switch to the Amazon invoicing system. But for now, I’m just manually creating the invoices when customers request them.
Ok, now let’s get back to the actual sales numbers.
My Amazon Spain €14,000
Just like with Italy, my first month of sales were extremely poor. In October, I only sold 11 (!!!) items, so I was already thinking it was a mistake to sell here in the first place:
FBA fees in Spain are not as high as in Italy, but my lower selling price of just €9.99 means that my profit per unit sold is just €3. This means that I have to sell at least 33 units each month just to cover the VAT accounting fees.
Luckily, in November, things turned for better! I sold 441 units, making €4,367.59 and a profit of roughly €1,323. I spent around €300 on PPC ads, which left me with a net profit of around €1,000 for the month:
While these are the worst sales number out of all five marketplaces I am now selling on, it still means that the profit I made in November will almost cover the VAT accounting fees for the whole year of 2020! Everything after that will be extra profit in my pocket.
Profit I would never have seen if I hadn’t registered for the Pan-EU program. Just to remind you, my minimal goal when I started this whole process was to at least cover the VAT accounting fees in each country so it’s not an extra expense to sell there.
And December has started off even better! So far, I have sold almost 1000 units, and even after the PPC costs, my profit stands at around €2500!
Again, this is all pure, extra profit that I would never have seen if I had not expanded internationally.
Remember, I didn’t come up with new products or new brands. These are the exact same products I have been selling in the UK. All I did was sign up for the Pan-EU program, sort out the VAT numbers, translate the listings, and that’s it! I even used the same images, so no extra work or expense there!
I don’t know yet how the month will finish. I’m running low on stock at the moment and Christmas is not too far away, but even if I only make €3000 in profit this month on Amazon Spain, it was still well worth the hassle!
The fact is, if you’re already successfully selling on Amazon UK and NOT expanding to the European marketplaces, you’re leaving real money on the table. It’s as simple as that.
If you think about it, the EU marketplaces combined are several times bigger than the UK! It’s a massive market that is not yet overflowing with sellers. So, what are you waiting for?
Yes, I understand that the VAT registration cost and the monthly returns cost is a risk. It was a risk for me, too. But I recommend that you look at it the same way I did. Simply calculate how many units of the product you need to sell each month to cover VAT accounting fees. I bet the number is not that high. My products are super cheap, so I have to sell 30+ units to cover the costs, but if you make a £10 profit per unit sold, all you need is 10 sales per MONTH in each marketplace to cover those fees. Everything above that is pure profit.
If you’re using Jungle Scout and see that the demand is there for your product and you know it converts well in the UK, the risk of it not selling on the EU marketplaces is very slim. Just do the research and if numbers are there, go for it!
Just look at my LAST 30 days of sales – almost 100 000 EUR!!!
Lastly, don’t forget that this is not a lifetime commitment! Even if you fail in the EU (very unlikely), you can always deregister from VAT, deregister from the Pan-EU program and continue selling just in the UK.
Or, it could be that you find new products/opportunities in the EU marketplaces and build a new brand/product just for sales in Germany or France, for example. This can actually work out great due to much lower competition in these countries, and I will talk more about this business model next year.
If you need help with your VAT registrations and monthly returns in Europe, I can recommend the company I’m working with: VATGlobal.com They have been very professional, fast and efficient in the work they do, as well as in their communication, which is a huge plus.
I have also arranged a special 15% discount for my blog readers! To qualify for this special offer, please mention this coupon code when contacting them: ANDYVAT2020
If you have any further questions about anything I have covered in this post, please leave your thoughts in the comments section below. I will personally answer all of them.
And if you haven’t started selling on Amazon FBA yet, now is the perfect time to do it! Start 2020 with a new Amazon business with the help of my Amazon Sharks video course. Now completely updated for 2020, Amazon Sharks is the most comprehensive UK FBA training course with 20+ hours of video lessons! As an added bonus, you get my personal support and FREE lifetime updates! So, make sure to check it out!
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Thanks for the article. Very useful info! Can I ask how much did you pay to get the Spanish POA notarized and apostilled? Did you have to request a certificate of goodstanding from companies house and have it apostilled as well?
Thanks a lot!
Good morning Andrew,
Great article as always.
I’m currently going through the headaches of arranging all of the correct documents to launch PAN EU. In regards to the SPANISH documents, did you have to get the VAT certificate sworn translated before sending off to get Hague Apostilled?
Also in regards to the Polish registration, we’ve been asked to supply ‘copy of your first available sales report from Amazon Seller Central which shows sales from the fulfilment centre in Poland’. I’m unsure of where to locate this as I was unaware we’d actually used their fulfilment centre’s!
Thanks for your comment.
At the time of my registration, Poland did not ask for that information so it must be something new… You should ask the company who does your VAT registrations on what is the best way to proceed there.
Yes, I did translate my VAT certificate for Spanish registration.
Just a quick update/query. I sent off the Spanish documents, the VAT which I had sworn translated, to the hague apostilled service you mentioned above. However they quickly responded and returned the documents due to them needing to be ‘NOTARIZED’ before they can complete the Apostille.
I now need to get these Notarized, from what I read I need a local bank or notary to witness and sign this for us? I assume this isn’t something you came across due to using a different service. But thought it may come in useful for others who will no doubt come up against the same issue.
Yes, they have to be notarized, that’s correct.
It’s all very complicated process, something taken from the stone age – NOT the way business should be done in 2020!!!
Brilliant info, Andrew, as always.
Congratulations, you’re really crushing it!
I’ve read every single post on your blog and every single comment and reply relating Amazon business, but I still have a few questions. Your answers will be very much appreciated.
1. I do business in the UK as an LTD (not VAT registered in the UK), I have not met my threshold, yet. I would like to expand my business to Germany at first or joining PAN-Europaen straightaway – my question is: To get a VAT number in Germany (+Poland and Czech Republic) do I need to have a VAT in the UK (even below threshold)? Every site that I have researched says you need to be VAT registered in your home country (UK in this case) to obtain a German VAT. Is that true?
2. I use TransferWise as well as you do. Have you connected XERO to it? If no, what accounting software do you use for corporate tax purposes in the UK? Can you recommend any good accountants for my local corporate taxes? (I am talking about annual return – or should I fill that forms by myself?)
3. (!) I received an offer from Amazon about PAN-European, too. BUT, what if I would like to de-register at the end of 2020 from VAT+PAN-European, could this cause any problems? (kinda wasting/experimenting) with Amazon money?
Thank you in advance, keep up the good work!
Thanks for your comment.
1) Unfortunately I don’t know the answer for this as I started the process when I already had a VAT number in the UK. But I can’t really see why you would have to have a VAT number in your residency country to get a VAT number in other EU country. Maybe you can contact VAT Global and ask them this question? They for sure will know the answer. It would be great if you share what they say with us too.
2) No, I personally don’t use Xero because my accountant uses custom built software. If you’re looking for good eCommerce UK accountants, check out the directory on this website:
3) As far as I know, you’re allowed to do – they couldn’t legally bind you to a contract that prohibits you from de-registering from VAT numbers, that wouldn’t be legal.
Hope this helps! 🙂
Well done Andrew. Did you start off by getting reviews from friends etc? I launched in France with no reviews and really struggled, spent lots on PPC and had zero sales, I think because of zero reviews. Germany is now starting to improve as I have reviews, but before then, I was also struggling.
UK market I’m doing about £70k a month at the moment, which is why I think reviews have a lot to do with it..
Thanks for your comment.
No, not at all – I didn’t have any reviews on these regional marketplaces and I didn’t do anything extra to get them in. I guess it depends on the competition, maybe in your niche the competition level is much higher. But while doing research on Amazon.de, Amazon.fr etc., I saw tons of listings/products that do good amount of sales with no reviews or very small number of reviews.
Congrats on the £70k a month revenue on the UK site, that’s a great turnover!
Brilliant figures Andrew, well done
Thank you Steve! 🙂
Are these foreign sales all for just your variations? Or another product?
I’m product researching at present. If I come across a niche with one excellent product listing, which I don’t think I could improve on, do I look elsewhere, or try to perhaps match theirs to steal some of their business and that from weaker listings? Virtually all ideas I’ve come across this far using JS have one or more GREAT listings on page 1.
Thanks for your comment.
Yes, most of these sales are from my Christmas variations.
As for the product research and competitors – one good listing should NOT scare you away from a good niche/product, no. Most niches will now have competition, that’s fine. You have to look at the overall picture, total monthly sales, how they distribute across all sellers etc. etc. And, of course, you would still try to beat that main competitor with something – even if it’s a more unique branding or packaging, the quantity or price. There’s always something you can use to differentiate from others.
Thanks for the update 🙂 I’ve been out the game for a while but getting back in soon, nice to know what that there is still space for me! How much is your course now?
But I’ve sold 35 000 euros in Spain, it, and fr combined, already before, and I never done n e thing with VAT in any countries. How come no1 has told me off…? Thanks for VATglobal, that is a weight off.
Thanks again 😀
Thanks for your comment.
Amazon Sharks course costs £990 and that includes free lifetime updates as well as my personal support. You can pay the whole fee up-front OR choose the weekly payment plan where you pay £99 a week, for ten weeks until same £990 is paid out.
As for VAT registration obligation – you probably did it few years ago? Back then Amazon didn’t actively police this and EU rules were also different. Now, if you store stock in a EU country, you have to register for VAT in that country. You can also sell to EU countries from UK stock only, then you don’t have to register for VAT in those EU countries. But that’s not PAN-EU program I’m talking about in these posts.
Hope this helps Lynden & good luck with the business! 🙂