It’s time to talk about Amazon’s Pan-European (Pan-EU) program. In last week’s blog post, I shared my initial results from expanding my Amazon UK FBA business to France. Since then, many blog readers have asked me to cover in detail how the Pan-EU program works, how much it costs, the enrolment process, etc. Today, we’ll do exactly that. I’ll cover all of these questions in detail and show you how you can double your Amazon UK FBA sales with the Pan-EU program.
Before we get started, I want to give you a quick update on my Amazon Germany sales. Since I enrolled in the Pan-EU program last week, my sales in Germany have already skyrocketed! On Tuesday, I made 16 sales.
Yesterday, I made 15 sales. Hopefully, that’s just the beginning! I will do a full blog post on my Amazon.de progress later on this year, but just so you know, the Pan-EU programs WORKS and you’re leaving tons of money on the table if you’re not using it.
Ok, without further ado, let’s get started!
What is the Pan-European program and how does it work?
If you’re new to selling on Amazon, I will quickly remind you how important it is to use the FBA program instead of handling all of your stock and orders on your own. With the use of the FBA program, you:
- Get better conversion rates because most customers prefer to buy Prime-enabled items.
- Get better rankings because Amazon prefers FBA listings over Merchant-fulfilled listings.
- Don’t have to worry much about account metrics because Amazon handles fulfilment, shipping and returns on your behalf.
- Free up your time for more important business tasks!
There are some specific cases where the use of an FBA program may not be suitable. For example, if you sell customised items, have a large inventory variety, etc., but in general, 99% of Amazon sellers should use the FBA program. Not only it does increase your sales, but it also makes it possible to run your business from anywhere in the world and not worry about daily order processing, trips to the post office and dealing with all other order-related issues.
Now, Amazon is offering a variety of FBA programs—and Pan-EU is one of them! To fully understand how it works, let’s quickly go over the various FBA programs Amazon offers. I will talk about these programs from a UK perspective (seller based in the UK), but the same principles apply to all other European Amazon marketplaces:
European Fulfilment Network
With this program, you send stock to Amazon UK, but you also list your items on other Amazon regional marketplaces of your choice: Germany, France, Italy and Spain.
Orders are fulfilled from the UK and you pay a premium fee (cross-border fee) on international orders and local fulfilment fees for orders from the UK.
This is the easiest way to get started with international sales on Amazon, but it does come with some negatives, such as higher fulfilment fees, no Prime status, generally longer delivery times for customers and lower conversion rates.
You send goods to one or more European Amazon warehouses and enjoy Prime benefits and local fulfilment fees in the countries you have stock in.
You pay additional cross-border fees for orders going out of those countries.
This is a great program if you want to expand your business to a specific European country but don’t want to enroll in the Pan-EU program.
This is the flagship program for international expansion as it allows you to sell in ALL five European marketplaces from one inventory pool.
You can also enjoy local fulfilment fees and Prime benefits for ALL of your listings in ALL five marketplaces. Amazon will even distribute your stock across Europe for you, for free, which means you only need to send stock to Amazon’s UK warehouse and it will be distributed automatically for you.
This is the program we’ll be talking about today. Keep in mind that while it does offer great benefits, it comes with some problems too, which we’ll cover later on in the post.
So far, so good, right? Good! Before we get into the details of how to activate the Pan-EU program, we first need to talk about one super important downside that you will face when joining the program, which is….
VAT Registration in Europe
I have talked about VAT registration for Amazon sellers in a separate blog post, but I do want to quickly go over the basics of it again, this time in the context of the Pan-EU program.
The sad reality is that European laws require us to register for VAT in every country we store our products in, which means that when we enable the Pan-EU program, it triggers VAT in all of these countries:
- Czech Republic
Why are Poland and the Czech Republic on the list when there are no Amazon marketplaces in those countries? Because Amazon’s German platform uses warehouses in Germany, Poland and the Czech Republic. As I said, we have to register for and complete VAT returns in every country that holds our stock, which includes Poland and the Czech Republic.
It doesn’t matter how much you’re currently doing in revenue or your projected sales in those countries, the law requires VAT registration from the very first sale.
So, even if you’re not yet VAT registered in the UK, you will still have to register for VAT in all six countries to use the Pan-EU program.
On the other hand, if you use the Multi-Country Inventory FBA program, you can select the individual country platforms you want to sell on.
For example, using Jungle Scout, you might see that there is great potential for your product in Spain, but other countries are not worth your time. In that case, you could simply use the Multi-Country Inventory program, register for VAT in Spain and expand your sales only to Amazon.es.
Or, if you see that Germany is the biggest marketplace for the product you sell, you could register for VAT in Germany, Poland and the Czech Republic and enjoy all the Prime and FBA benefits while selling only on Amazon.de.
But that’s for the Multi-Country Inventory program. If you want to use the Pan-EU program, you have to register for VAT in all six countries where Amazon holds your stock.
IMPORTANT! If you are based outside of Europe and start using the Pan-EU program, you also have to register for VAT in the United Kingdom. This is discussed in more detail in my VAT for Amazon Sellers guide, but to put it simply: if your business is not registered in the UK, then to use the Amazon FBA program in the UK, you also need to get a UK VAT number.
In the same way, a seller from Germany won’t have to register for VAT in Germany (if they’re under the threshold) but will have to register for VAT in the UK.
What is the best way to handle
VAT registration and returns?
One way to handle this issue is to do registrations and monthly returns on your own. Bad idea? You guessed right! I wouldn’t recommend doing this on your own as it’s a very complicated process and chances are you will waste a lot of time and money trying to figure this out on your own.
Maybe you could handle the VAT registration process somehow, but can you really manage all the VAT returns on your own for all these EU countries with their different laws, etc.? Most likely not, unless you’re a professional accountant.
The only viable option is to outsource this process. Luckily, there are multiple ways you can do this:
This is the cheapest option as it only costs €400 per year for each country and an additional €100 per year for extra channels, such as eBay or Shopify. This means that if you’re based in the UK and want to use the Pan-EU program, you will have to pay €2400 per year to cover all six countries (Germany, Poland, Czech Republic, France, Italy and Spain).
The VAT registration process is also included in this price, so there are no additional fees for that (apart from some specific fees you will have to pay to prepare legal documents, like notarised translations, etc.).
And it gets even better! For the last few years, right around autumn (which is now), Amazon runs special promotions for established Amazon sellers that offer ONE YEAR of this service for FREE! That means you don’t have to pay that €2400 for the first year, which is obviously great! I recently received this offer (again) even though I’m already using another service. Watch out for these emails from Amazon or contact them to ask if you qualify for this promotion or not.
In my opinion, this is a really good price for this service, but I still don’t use it. Why? Because I found mixed reviews about the service online, with some being very negative (late tax returns, wrong returns, slow communication with account manager, etc.). I simply didn’t want to take a risk with my business operations. Maybe things have changed recently, so if you do decide to go with this service, I recommend you do some online research in the seller forums to see if the service quality has improved.
2) Use third-party VAT service providers. There are many companies that can handle EU VAT registrations and returns, and this is the option I chose for my business. I didn’t want to take the risk of receiving poor service from Amazon, so I researched companies with the best reviews and settled on VATGlobal.com. They charge a much higher fee—€5000 for yearly VAT returns in six countries—but this fee also includes the initial registration process.
So far, I am very happy with the service I have received. The registration process was very smooth as they have a special customer website/portal where all the documents are uploaded, as well as clear instructions and an integrated message board.
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
Now that I have started doing VAT returns, I have an account manager who is always quick to reply to my inquiries. Overall, I can highly recommend VATGlobal.com for VAT registrations and returns. I am in no way affiliated with this company and don’t benefit from promoting them. I’m just sharing my good experience with them with my blog readers.
There was one thing that made my choice to find a third-party VAT service provider easier. Last year (2018), Amazon was running a promotion where they would cover the first year of fees for using such services. There was a list of approved companies (VATGlobal was one of them), and based on the reviews and pricing options, I selected the company that looked best to me.
This means that, so far, I haven’t paid a penny for this process. Amazon gave me €5000 to cover my first year’s registration and returns. With January just around the corner, I will soon start to pay these fees on my own, but as we’ll soon find out, my profits from expanding my business are much higher than these fees, so the risk was well worth it.
As I explained in my Amazon France update post, I was very lazy when it came to getting these registrations, preparing all the documents, etc., and that was the reason why it took so long for me to get all the VAT numbers. Just last week, when I finished writing the post, I received my last VAT number from Spain, completing all the requirements.
In general, if you act fast and get all the documents ready within a month or so, you can expect to receive all your VAT numbers within two to three months (if you’re lucky) or up to six months if there are delays.
The good news is that Amazon actually allows you to register for the Pan-EU program BEFORE you get all the VAT numbers sorted. This means you can start selling and making a profit much quicker.
When doing VAT registrations, you will specify the date from which your VAT registrations should become effective, and that can be a date in the past. For example, I set January 1st 2019 for all my registrations, so when I received my VAT numbers, one by one, VAT Global simply backdated my VAT returns and I paid VAT on my past sales in that period.
Ok, now that we have covered what the Pan-EU program is and how VAT works with it, let’s take a closer look at how to actually make your product listings available in these regional Amazon marketplaces.
Building your International
The process is actually very simple and straightforward. First, you have to make sure your account is enabled for European marketplaces. By default, all new accounts are enabled unless you specifically changed the checkbox for this in the account registration process. If you did, you can easily change/update your account via Settings > Account Info > Your Services > Manage.
This upgrade doesn’t trigger any VAT requirements or the Pan-EU program by default. It simply makes international selling tools available in your account. If you already see multiple countries listed under the “Sell on Amazon” page, you don’t have to do anything. Your account is already enabled for international expansion.
Next, go to Inventory > Sell Globally. This is the international sales dashboard where you can see sales data, orders, buyer messages and other information for all the marketplaces you’re selling on.
To make your products available on regional Amazon websites, you have to use the Build International Listings tool, which is available on the same page. There, you simply select which listings you want to transfer to other Amazon marketplaces. With just a few clicks, the process is done!
Now, the biggest additional task during this process will be translating your listings into the local languages. Amazon has a built-in feature that automatically translates your listings free of charge. These translations are very poor, though, so I would only use them as a temporary option.
Amazon also allows you to pay for manual translations, but I wouldn’t really recommend this option either, as the quality you get most likely won’t be of a very high standard. You also don’t want your listings to be direct translations. As each country is different, there can be nuances that won’t make sense when translated or you might want to include extra words, etc. Plus, you will also want to ensure you have back-end keyword translations done, as well as basic keyword research so you know which keywords to target in PPC and so on.
For this reason, I recommend using specialised services from people who know the Amazon drill and know how to write good sales copy, titles, bullet points, etc.
There are hundreds or thousands of such services now available, and you can find them on websites like:
- Jungle Market
- Standalone websites
I personally use Fiverr for translating my listings as it offers a great range of services and a variety of quality options to choose from. These range from $5 services for simple direct translations to $100 services that include proper market research, keyword research, writing back-end keywords, preparing A+ Content and more!
I also like the reviews system on Fiverr. It is usually a very accurate reflection of the quality of service to expect. Plus, the ordering system and clear timeframes for order completion are all built into the platform.
To find Amazon translation services, simply search for “Amazon + Language”, like this:
- Amazon French
- Amazon German
- Amazon Spanish
- Amazon Italian
You will find tons of gigs under these searches. Go through them and simply pick the one best suited to your budget and needs.
If you need a good service for French and German listings, I can highly recommend this seller.
Alban did an excellent job for me. He provided good listing translations, as well as quality A+ Content translations and keyword research for a very reasonable price and delivered the work in a timely manner! Contact him for any special requests and bulk quotes.
Now, your product images will also be automatically transferred to the regional Amazon marketplaces, so you don’t have to do anything extra there. But if you have English text on some of your images, I recommend you translate them.
You can also set your prices to whatever you want in each individual regional marketplace. Just like changing your images, title, description and everything else, you can easily change the price by selecting the marketplace from the dropdown menu and then adjusting that specific listing.
Changes made there will only apply to that selected marketplace, so if you want to, you can even have totally different product images in, for example, Spain and France. The same goes for prices, titles, descriptions, bullet points and keywords.
And that’s basically it! When you transfer your listings to regional marketplaces, your ASIN numbers and SKU numbers will stay the same, so Amazon will automatically know how to manage your stock for them.
The Brand Registry program also works across all European marketplaces, but it won’t be transferred during this process. This means you will have to build new A+ Content pages for your products in each regional marketplace in the local language. This is a topic I will most likely cover in a separate blog post in the near future.
Once you have created your international listings, you can enable the Pan-EU program from your account. Based on how many listings you have, they will become available “locally” within a few hours. Then, you can start promoting them to build up reviews, sales history and velocity for rankings, just like you would when you launch a new product in the UK.
As you can see, the whole process is very straightforward. You really don’t need to be super smart to do this. It won’t even cost you any money for the first year if you take advantage of Amazon’s promotion. What’s not to like about it? Let’s find out!
Is the Pan-EU Program
suitable for you?
Would I recommend the Pan-EU program to ALL Amazon sellers?
Yes, I would—with some exceptions.
If you’re just starting out and haven’t yet sold anything on Amazon, I would focus on just one Amazon marketplace—preferably your local marketplace so there are no VAT registration requirements. There’s no point in taking on all the additional work and risk if you don’t even know if your product will sell on Amazon or if you can make it all work as planned. Start out on your local Amazon website. When you see that your product is selling well and has good potential for international sales, then you can consider joining the Pan-EU program.
Another example would be if you’re selling something that is country/region-specific and there’s simply no demand in other countries for that product.
You can easily check sales data on all European Amazon websites by using Jungle Scout. If you see that there are similar products listed and they sell well, it’s a good sign that you will greatly benefit from such an expansion.
There could also be a situation where no one else is selling your type of product on other Amazon websites so you won’t get any sales data in Jungle Scout. This could mean that there’s no demand for that product OR it could simply mean that no one sells it there yet.
One easy way to test this out is to start with the European Fulfilment Network program. This way, you don’t have to register for VAT in other countries, but you can still test the demand. Yes, conversion rates will make the lower fees higher, but you should be able to see if it is worth taking the risk with VAT registrations. With this approach, you should still translate the listing (as discussed earlier in this post) to make the product as attractive as possible in regional marketplaces.
At the end of the day, it all comes down to maths—at least, that’s how I looked at it. I knew that it would cost me €5000 per year to cover the whole VAT aspect, which means roughly €100 in expenses per month, per marketplace. If I could make a €4 profit per unit sold, I would only need to sell 25 units per month in each marketplace to cover my VATGlobal fees. As I know now, the results are far better than that and I will be making a profit for sure, especially since I didn’t pay anything for my first year’s VAT registrations/returns.
Another way to look at it is: If Amazon covers your first year of trading, there’s really no risk! You can join the Pan-EU program, set it all up within six months, see how your sales are at the end of the first year, and if it didn’t work out, simply DE-REGISTER for VAT in those countries and disable the Pan-EU program. De-registration will cost you a few hundred pounds, so that’s ultimately the amount of money you’re risking.
Obviously, there are some product-specific factors can complicate the whole process for you. For example, if you sell supplements, you will have to translate your packaging into other languages and essentially create new SKUs for regional sites. There could also be various other country-specific rules on products like kid’s toys, medical devices, liquids, chemicals, etc. However, with most “normal” household products, this won’t be an issue.
Lastly, another popular strategy I recommend is looking at market-specific product opportunities. As the UK marketplace becomes more and more competitive, there’s HUGE potential with launching products in regional Amazon websites. This means you would start your product research specifically on Amazon.de or Amazon.fr using Jungle Scout and pick products based on sales/competition in those countries. This is not about the Pan-EU program as such, but it is a strategy that can be super effective if you put your time and energy into it.
Ok, let’s sum it all up. I will now give you my final thoughts on the whole Amazon Pan-European program!
I truly believe that Amazon’s Pan-EU program is an excellent way to increase your sales to Europe WITHOUT finding new products, suppliers, etc. I mean, you have done all the hard work on product research, branding, listing research, etc., so why not make your offer available to more people?
If there was no VAT involved, it would be a no-brainer—but even with that, it’s still a good business move to increase your sales and diversify your risk across all five Amazon platforms in Europe.
When you take into account Amazon’s offer to cover VAT registration and returns for your first year, the risk is actually very low. It’s all about you taking action, doing the extra work on translations and simply giving it a go!
When I initially considered the Pan-EU program, my expectations were quite low. This was mainly because I’m selling a product that has ENGLISH text as part of it. I thought that the demand for such products in Europe wouldn’t be that high. Boy, I was so wrong on that one! It’s very early days, but I can already see that within six months, when I establish good rankings, I can basically achieve the same level of sales as in the UK— possibly even more!
I cannot guarantee that it will work for you in the same way as it obviously depends on the product you sell, the competition and your execution, but it would be really stupid to not give it a go, don’t you think?
The only regret I have is that I didn’t start the process sooner—seriously! I could have done all of this in 2018 and have an established presence on all five Amazon platforms by now. But it is what it is. You learn as you go, and my job is to give you the best possible advice to avoid the mistakes I have made.
This is the BEST time to get started with this! If you already have an established Amazon FBA business in the UK, you should make EU expansion your TOP priority for 2020! Why? Because the EU is planning to change the whole VAT system in Europe in 2021 so we won’t have to register for VAT numbers in each country separately.
There will be a centralised system where VAT is managed for all EU countries and where all payments are done in one place. This means the barrier to entry will be much lower for Amazon sellers who want to get into the EU marketplaces.
That’s why you have to use the year 2020 to firmly establish your presence, rank your listings and gain reviews. When 2021 comes and competition levels inevitably increase, you’ll already be dominating your niche, which makes your competitor’s job much more difficult.
There’s no set date for when this will happen, but it is projected that it will be 2021. Maybe it will be 2022—who knows? But it will happen and we should be prepared for it.
That’s it for today! I really hope you found this guide valuable. If you have any questions, please leave them in the comments section below. I personally reply to all comments within 24 hours, Monday to Friday.
Lastly, if you want to learn more about building an Amazon FBA business, check out my Amazon Sharks program here. In 20+ hours of video lessons, I teach you exactly how to start a successful Amazon business from A to Z! As an added bonus, you also get my personal support and FREE lifetime updates.