Brexits Impact On Amazon

From the 1st of January, 2021, the UK is formally due to leave the EU’s Single Market and Customs Union. This means that there will be a customs border, calling to end the Pan-European FBA inventory transfers between the UK and the EU.

WHAT DOES THIS MEAN?

Pan-European FBA allows for faster delivery and inventory is visible to millions of customers across Europe. Bringing this to an end can cause sales opportunities to go from 446 million to 66 million Brits only. The UK centres will no longer be used in order to fulfill orders in Europe. Stock will need to be split so that there is FBA inventory in the UK as well as in another European country. Non-EU sellers that want to continue to sell to the UK will also need to split their stock. This will result in higher inventory holding costs as well as additional costs, such as shipping.

Although it is only meant to take effect from January 2021, there could already be an impact on existing stock. If you have stock in Pan-European FBA, it is possible that Amazon will retract it as well as stop sending more stock and sales will decline as a result of this.

TAKE A LOOK ON THE BRIGHT SIDE

Although it is all slightly unclear what the future will hold, new trade deals and commercial opportunities could arise. There may be less competition between sellers and, because Amazon operates in many international markets, to diversify your customer base could be rather easy. While some may back out, this could potentially tie the UK to New Zealand and Australia, bringing about new markets with greater stability. Luckily, there is more than enough time to prepare yourself for the final bombshell. It will be wise to split stock in the meantime so that when the 1st of January comes, your sales will not be hit as hard.