Introduction
Taking your Amazon business to Europe is a smart move for U.S.-based sellers.
With over 500 million potential customers, a rapidly growing e-commerce market, and Amazon’s robust infrastructure, Europe offers US sellers an unparalleled opportunity to grow.
In this article, we’ll explore why expanding to Europe is a game-changer and provide insights on how to get your Amazon Europe business up and running. Let’s get started!
Why Expand to Europe?
Expanding to Amazon Europe gives U.S-based sellers access to a vast market with less competition compared to the U.S.
With fewer sellers, you’ll have greater visibility, better opportunities for differentiation, and reduced price wars.
Plus, Europe’s e-commerce market is not only substantial but also growing rapidly. In 2023 alone, Amazon EU generated over €201 billion in revenue, highlighting the region’s immense potential for sellers.
Additionally, entering multiple European marketplaces—such as the UK, Germany, France, Italy, and Spain—enables sellers to diversify their revenue streams. This reduces reliance on the US market and helps mitigate risks tied to economic shifts or market fluctuations in a single region.
However, before embarking on your EU expansion plan, it‘s important to assess demand, which brings us to our next section: evaluating demand.
Evaluating Demand
Without a clear understanding of product demand across European marketplaces, sellers risk entering markets that aren’t as lucrative as expected.
That’s why evaluating demand is key since it helps sellers determine if the market’s potential is worth their time and money.
You can evaluate demand by using a third-party tool like Helium 10 X-ray.
Helium 10 X-ray
To assess potential demand, you can use the Helium 10 X-ray tool to determine your competitors’ sales performance over the last 30 days. Let’s find out how it works!
Step 1: Let’s say you want to evaluate demand in the German marketplace.
First, head to Amazon.de and enter a keyword relevant to your product (e.g., “blower”).
Step 2: Identify several key competitors to analyze their sales performance. Look at both top-sellers and lower-performing products to get a balanced view of the sales volume in your category.
Step 3: Go to one of your competitor’s product detail pages and click on the X-ray Chrome Extension to access detailed sales data.
Step 4: Head to the “ASIN Sales” column to find an estimate of the monthly sales volume for each ASIN.
Step 5: Analyze the data to see whether or not products in this category show a pattern of solid sales volume. If the sales figures are consistently low, this might not be a viable niche to get into.
Also, keep an eye on customer reviews of competing products. They often highlight pain points you can address to set your product apart and ensure it will be what customers want to buy.
Selling on Amazon Europe
After choosing your target European country and evaluating the demand there, it’s time to set up your seller account and ensure you comply with the necessary regulations.
Here’s how to get started:
Step 1: Go to “Inventory” on your “Seller Central” account, then choose “Sell Globally”.
Step 2: Once you reach the “Sell Globally” page, select Europe as your marketplace. Then, head to “Click here” to link your existing US account.
This will direct you to a page where you’ll sign in again using the email and password associated with the region where you’re already selling.
Complete the registration with any required details. The new countries will then be automatically added to your account.
Step 3: Choose a fulfillment method. There are three different fulfillment methods to start selling on Amazon Europe. Let’s break down each one of them:
European Fulfillment Network (EFN)
With EFN (European Fulfillment Network), your products are stored in a single Amazon fulfillment center and distributed across Europe.
Ship your products to a single country’s fulfillment center, where orders are packed and sent to customers across all European marketplaces.
Multi-Country-Inventory (MCI)
If you prefer to store your products in multiple distribution centers across Europe, the Multi-Country Inventory (MCI) program is your go-to.
With MCI, you can send your FBA stock to Amazon’s fulfillment centers in several countries of your choice. This approach offers key advantages:
- Orders are shipped from the nearest warehouse, ensuring faster delivery times for customers.
- You save on transportation costs by shipping stock in bulk to local fulfillment centers instead of fulfilling individual cross-border orders.
Pan-European FBA
Pan-European FBA lets you ship products to two Amazon fulfillment centers, and Amazon distributes them across the EU based on demand.
With Pan-European FBA, your products qualify for Prime across all EU marketplaces, ensuring faster delivery and increasing sales potential.
Plus, there are no additional costs for orders placed from a country different from where the item is stored.
It’s important to note that if you choose the Pan-European FBA program, you’re required to be VAT-registered in every country where your inventory is stored.
Since this choice directly impacts your tax obligations, it’s essential to understand the fundamentals of VAT, why it’s important, and how to ensure compliance.
What is VAT?
As a US-based seller, you might be unfamiliar with the VAT system.
VAT (Value Added Tax) is a multi-stage tax applied at every step of the supply chain—from production to the final sale to the consumer.
Why is VAT Important?
VAT registration is mandatory before you can start selling in Europe. It ensures compliance with European tax laws and is required if:
- You store inventory in a European country (e.g., through Pan-European FBA).
- You sell products to European customers.
How to register for VAT?
- Register with the tax authorities in the country where you need VAT (e.g., Finanzamt in Germany).
- You’ll probably need help from a tax advisor or service, as VAT registration requires specific documentation, including proof of business registration, shipping details, and potentially a local fiscal representative.
You can use Amazon VAT Services to guide you through the registration and filing process.
After receiving your VAT number from the tax authorities in your target country, you can easily add it to your account by following these steps:
Step 1: Log in to your “Seller Central” dashboard. Click the gear icon in the top corner. Then choose “Tax Settings”.
Step 2: Once you land on the “Tax Settings” page, click “Add VAT numbers”.
Step 3: Choose “Add a VAT/GST registration number” to complete the required information. After that, just wait for Amazon to verify your VAT number, and that’s it!
Labels and Markings
When selling products in the EU, you might require specific labels and markings to comply with local regulations.
Ensuring proper labeling is crucial to avoid fines, delays at customs, or restrictions on selling in the EU market.
Depending on the product category, you may need to include CE marking, EU Ecolabel, and energy labels. Let’s find out more about each!
CE Marking
CE stands for “Conformité Européenne,” which translates to “European Conformity.”
This marking signifies compliance with EU standards, confirming the manufacturer has ensured the product meets safety, health, and environmental regulations.
Product with “CE” label
EU Ecolabel
This label certifies that products meet high environmental standards throughout their entire production and lifecycle and are recognized across all European countries.
If your product has strong ecological features, it could qualify for the EU Ecolabel. Given the growing emphasis on sustainability among consumers—making it a powerful selling point—it’s worth checking if your product is eligible for this certification.
Product with the “Ecolabel”
Energy Labels
Energy labels, often mandatory for electrical appliances, help buyers make informed purchasing decisions by providing key efficiency information.
Products are rated for energy efficiency using a scale from A to G, where A represents the most energy-efficient and G is the least efficient.
If your electronic product impacts energy consumption, directly or indirectly, you may need to display an energy label.
Link U.S. Listings using the Amazon’s BIL tool
You’re almost ready to launch your business in Amazon Europe, so it’s time to use Amazon’s Build International Listings (BIL) tool to link your U.S. listings to European marketplaces. Let’s see how it works:
Step 1: To access the BIL tool, hover over “Inventory” and then go to the “Sell Globally” page. Click on the “Build International Listings” link, located near the top of the page.
Then, click on “Get started”.This should take you to the page where you select your source marketplace.
Step 2: Select the SKU you want to replicate in the target marketplace, then provide the required details, such as the fulfillment method and product condition.
Step 3: Set your price rules.
Step 4: Review your selected offers to ensure everything is accurate before finalizing and connecting your listing.
And that’s it! Your U.S. listing will be transferred to your target marketplace in about 4 hours.
Listing Localization
Connecting your U.S. listing through Amazon’s BIL tool is just the first step. While BIL automatically translates your title, bullet points, and description, the translations may not always hit the mark.
To truly resonate with European customers, you need to localize your listings—adjusting them for language, cultural nuances, and local preferences.
For accuracy and relevance, you might need to hire a translator to ensure your listings truly connect with the target market.
As soon as your listings are translated, simply add them to your account.
Driving Traffic in the EU
To gain visibility in the EU, you’ll have to show up in the search results for keywords relevant to your product. To do this, you can use SEO and ads.
But before we discuss strategies for driving traffic, let’s figure out how to find the right keywords to show up for.
Keyword Research Strategies for the EU
There are three strategies we prefer to use when it comes to finding keywords in the EU. Let’s break them down for you!
- Helium 10 Cerebro
This is a reverse ASIN research tool that allows you to find the keywords your competitors are ranking for as well as their search volume. Let’s find out how it works!
Step 1: Go to your target marketplace (e.g., Amazon.de) and select several competitors’ ASINs in your category.
Step 2: Take these ASINs and drop them into Cerebro. Click on “Get Keywords”.
Step 3: Sort the keywords by search volume from highest to lowest, then select the most relevant high-volume keywords for your products.
- Keyword Harvesting
Another strategy to use is letting Amazon find the search terms for you by running auto, broad, and phrase campaigns.
After running these campaigns for a while, you’ll have thousands of search terms that Amazon found to be relevant to your local market.
You can take these search terms and use them as keywords in your other campaigns. Here’s how to extract and use those search terms:
Step 1: Go to “Campaign Manager” then head to “Measurement & Reporting”. Click on “Sponsored ads reports” and then “Create report”.
Step 2: Create a sponsored products search term summary for the last 30 days. Once it’s ready, download and open it in Excel or Google Sheets.
It should look something like this:
Step 3: Apply a filter to the whole sheet, then go to the 7-Day Advertised SKU Sales column, then add a > $0 filter. This will show you all the search terms that produced sales for your product in the last 30 days.
Step 4: You can take these search terms and use them as keywords in your campaigns since they have proven they can produce sales for your product.
- Search Query Performance Report
The SQPR is a report given to you by Amazon that shows you the most relevant search terms for your product in any given marketplace once you’ve listed your product there.
All you have to do is head to “Seller Central” and then choose “Brand Analytics” to find this report.
Next, hover over “Search Analytics” to choose “Search Query Performance”.
Choose your target marketplace to get a list of the potential keywords that you can use in this market.
Now that you have your keywords list, let’s find out how to drive traffic.
Running Ads on Your Keywords
With your keyword list ready, it’s time to put them to work in your ad campaigns.
You can incorporate those keywords in Sponsored Products campaigns while setting up broad, phrase, and exact match-type campaigns separately.
Alongside these manual campaigns, you should keep running the auto campaigns that we mentioned earlier to continuously generate new search terms and keywords for your product.
When launching your campaigns, start by selecting Amazon’s suggested bids to ensure you get enough traffic and visibility since you might not be familiar with the regular bid levels of this new market you just entered.
Leveraging Keywords for SEO
As for SEO, all you need to do is incorporate those keywords into your title, description, and bullet points as well as backend keywords.
You can also target those keywords with higher bids in your campaigns to drive extra traffic which helps them rank faster at the beginning.
Wrapping Up
Now that you know about demand evaluation, fulfillment planning, VAT registration, label compliance, SEO optimization, and running strategic ads, it’s time to confidently enter the European market and tap into its untapped potential.
