Navigating VAT Regulations for Amazon Sellers Expanding into Europe

Join us on this episode, as we sit down with Jerome de Guigne, a seasoned expert in international business and Amazon marketplace strategies. We take a trip across Jerome's impressive business career, which stretches from France to Luxembourg, and uncover the crucial steps he took to carve a niche in the world of Amazon. Listen in as Jerome lays out the intricate process of aiding brands in scaling their operations and mastering the art of value creation on this global platform.

This conversation also welcomes Jacob McQuoid from Avask and throws light on the hurdles U.S. companies face when stretching their commercial footprint to European shores, such as VAT intricacies, regulatory hoops, and the ever-present language barriers. But it's not a one-way street; European entities eyeing the U.S. market have their fair share of VAT tax complexity to navigate. We bring in perspectives from professionals at firms like Avask and explore tools like Pacvue and Helium 10, providing a lot of insights for Amazon brands planning to cross these transatlantic bridges.

Finally, we touch upon the wisdom of starting small and testing the waters when it comes to international expansion. This approach allows businesses to minimize risks and optimize for market receptivity, a strategy underscored by the shared knowledge from this episode. So whether you're an experienced Amazon seller or new to this realm, this episode is packed with invaluable advice and strategies for taking your Amazon business to new international heights.

 

In episode 543 of the Serious Sellers Podcast, Bradley, Jerome, and Jacob discuss:

• 00:01 - Expanding Amazon Sales With European Experts
• 02:49 - Value Creation Through Amazon Specialization
• 06:45 - International Expansion Strategies for Amazon Sellers
• 09:25 - IRS and European Tax Authority Comparison
• 16:51 - Navigating International Business and Online Presence
• 20:10 - Navigating VAT and E-Commerce Expansion
• 22:38 - Understanding VAT for American Sellers
• 29:39 - US Sellers' VAT Number in Europe
• 31:08 - Comparing Import Tariffs
• 35:24 - Starting Small for Market Testing

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Transcript

Bradley Sutton:

Are you a North American seller interested to expand to Amazon Europe, or maybe vice versa? Are you interested in advanced Amazon advertising strategies? Well, today, I went to Germany to interview in person two experts on these topics. How cool is that? Pretty cool, I think.

Bradley Sutton:

Want to keep up to date with trending topics in the e-commerce world? Make sure to subscribe to our blog. We regularly release articles that talk about things such as shipping and logistics, e-commerce in other countries, the latest changes to Amazon Seller Central, how to get set up on new platforms like New Egg, how to write and publish a book on Amazon KDP and much, much more. Check these articles out at h10.me/blog.

Bradley Sutton:

Hello everybody and welcome to another episode of the Serious Sellers Podcast by Helium 10. I'm Bradley Sutton and this is the show that's completely BS-free, unscripted and unrehearsed organic conversation about serious strategies for serious sellers of any level in the e-commerce world. Another episode here coming from the opposite side of the world. I'm in Frankfurt, Germany and was able to interview a lot of different people. For the first time on the show, we've got Jerome here. Jerome, welcome.

Jerome:

Thank you very much. I'm super happy to be here and it's nice to see you on this part of the world.

Bradley Sutton:

Excellent. So you know, like I do with first time guests, we need to find out about you. And this is important too, because, like I don't know much about your back stories. What country in Europe are you from? Germany, France, so I have.

Jerome:

I'm all about going international, so my background is international also. I was born and raised in France but my mom is British. My dad is French. I lived in France but I also lived in Turkey. I lived a bit in Germany, in the UK and now I'm office design Luxembourg. So a lot of different experiences all over the world.

Bradley Sutton:

Okay, excellent, excellent. Now, what did you? Where did you go to university? In what country?

Jerome:

So I went to university mainly in France, so first in the nice city of Grenoble, which is not too far from Lyon. It's in the Alps Mountains, really nice to do like business and management. And then afterwards I did an MBA in a school in Basin Paris but had campuses in Germany and in the UK and also in the States. I did a week in Texas, for example. It was really interesting. So like multinational is really my thing.

Bradley Sutton:

Okay, excellent. Now, upon graduation, did you enter right into the business world and what you had studied, or what did you do?

Jerome:

So I went to work two years into the chemical business at that time it was called Atofina Archema. Now, it's like I was helping the head of the subsidiary there. So doing a lot of things, helping on IT topics, on business topics for two years. And then I came back and I worked for 10 years for a Chinese group and that's where I started to work in Luxembourg. And then afterwards, I was looking for a job and couldn't find one. So I said I'll start my own company.

Bradley Sutton:

Okay, and what was that company?

Jerome:

So at the beginning my idea was say, okay, I want to bring value, because when I did my MBA it was all about okay, how do you create value for your ecosystem? Because value has a price and you know, and then you can sell. So my first idea was to help people expand and grow in terms of sales. But I had been doing a lot of Amazon business in my previous company and like, step by step, I found out that a big pain point for people in Europe at that time so 10 years ago was not understanding Amazon and I said, oh people, it's simple, let me explain to you. So I went into step by step into the Amazon business and that's where we become specialized in Amazon.

Bradley Sutton:

Amazon is not a typical segue from somebody just coming from the business world. How did you first, just you know, think about that as a good aspect, you know, like Google or friends?

Jerome:

So my background was really distribution, since I was head of Europe and EMEA for this Chinese brand and we were expanding into countries having subsidiaries, having distributors, and so it's about selling right and then I started to work with companies and helping them expand and actually even 10 years ago, the or even more 10 years ago, the fastest way to expand was Amazon and it actually really started when a German brand I knew from before told me okay, take care of the international distribution of our brand, which was binoculars, and I said, okay, well, you know, the best way is really Amazon and that's where we really started to go there. So we mostly started from vendor background because bigger brands were working on vendor and now we have probably 70% seller, 30% vendor in terms of people we help.

Bradley Sutton:

So what about you? During this time, were you selling on Amazon yourself as well?

Jerome:

So I never sold on Amazon myself. I was always selling in the name of a company and, like I said, I started as a vendor, so selling to Amazon rather than selling on Amazon, and I've been helping a lot of sellers but never sold myself. Help friends. But, yeah, never went into it. It's a bit of a dream at some point to do that.

Bradley Sutton:

For your agency for the last few years, are you focused on any particular aspect of Amazon or like PPC, for example, or it's A to Z? What is your focus on? What you help sellers with?

Jerome:

It's very much A to Z we focus. We've got three main topics we focus on. One is global expansion, so it's helping anyone to go from Europe to the US, from US to Europe to US to Japan, to anywhere in the world, and it's really whatever they need. That's the first thing we focus on. The second thing is retail media. It's one of the big topics we do is like how do we help them expand better thanks to retail media. So advertising, PPC, DSP, AMC, whatever there is. And the last thing is technology.

Jerome:

So we're not a SaaS company but we use a lot of tools. So Helium 10 is one, Pacvue is another one. We also partner with SalSify, for example, on the PIM side, and we have built our own dashboard. So those three topics Global Expansion, Retail Media, technology are three topics we're very focused on and we try to help people through those different things. So it's really, for me, it's A to Z especially in those aspects. So anybody, for example, we've started to sell on our own accounts for brands who can't sell. So for me, it's like an additional. We're not really a distributor, but if a brand can't sell themselves, it's okay. We'll set up a seller account and we have one in the US. We have a seller account in Europe and we have one in India also, for example. So anyone who wants to expand in any way, we are here to help them.

Bradley Sutton:

Let's talk about the first thing you mentioned about the international expansion. I mean, there's probably 35 different combinations you can have. You know, Japanese person selling on America, European person selling in Japan, a person from Dubai selling in Mexico, you know, etc. etc. Let's talk about some of the more common ones. Probably the most common for our listeners would be I'm a US-based company doing pretty well. Now I want to get started in Europe because that's the second and third biggest marketplaces, UK and Germany. The thing the elephant in the room for a lot of people is like oh my goodness, VAT and things like that. So what are some of the main obstacles and maybe difficult things to navigate for an American company who wants to get started in Europe?

Jerome:

Great question. For me, the three things. The first thing is regulations and taxes. Regulations. So the thing is like am I allowed to sell those products in Europe? We're talking with a supplements brand, for example, in the States, and it's like okay, the way you talk probiotics, for example, or can you have that keyword on your listing all of that? So that's a first hurdle. We today were speaking with AVASK and AVASK is a great partner. We partner with to deliver, like VAT services and also help on regulation.

Jerome:

The second thing is languages. Obviously, you need to have a great service and you need to have great content for the local people and that's something we are partnering also with a company, YLT Yanak Krekic, who's delivering great service, for example. So typically, we create a hub of people we work with. And the third part is logistics, supply chain. It's like, okay, how do we? Will you get your products to Europe? Like, will you have a warehouse in Holland? Will you go directly to FBA? Who will be your importer of record? That also we work with AVASK and some logistics company. So, even before going into advertising, content and everything, you've got those three things as regulation, translations, in a sense and supply chain.

Bradley Sutton:

What are some of the steps that somebody needs to take as far as the basics that everybody needs to do? Like you know, there are some things that are kind of like nice to have. There's some things that are need to have. For example, let's talk, you know, let's talk about the need to have for getting started in Europe. I don't need to form a company in Europe. I can use my US company, but I need to. What something that everybody has to do? Is it the VAT register for VAT?

Jerome:

Yeah. So one thing you can't. Well, same way as in the US you can't play around with IRS, right, and in Europe you can't play around with the tax authority. So VAT is a must and my recommendation is that, typically, Amazon tends to underplay and when they sell the service of expansion, they tend sometimes to be a bit optimistic about the simplicity of VAT. It's not that simple, it's not over complicated, but you need to speak with people who know this stuff. AVASK is a great example of people who really know this stuff. So that's the one thing you need to be set up in at least one country. I don't know, we want to go in all the details, but you need at least one country. Best is to be listed in or having VAT in every countries in Europe but you need at least one to be legal and compliant.

Bradley Sutton:

Let's do the opposite. I'm a European based company. I want to sell in the biggest marketplace in the world Amazon, USA. You know, I know like way in the old days and now on Walmart, you know, actually still for in some situations you do have to have like a US corporation, but nowadays I can. You know, I'm registered in Germany. I can go ahead and register as an individual or as a person. What are some things that I, absolutely, have to do that are in obstacle to some Europeans for selling in USA?

Jerome:

So our assumption as Europeans that everything is simple in the US and generally doing business in the US is much easier than in Europe. Like you have much less regulations, there's less hurdles. Now on the tax side, it's still quite complicated and as a European, I had to learn okay to navigate that. Because you can have a company in the States, in one state who's like, its addresses one state but if most of your sales is in another state, the other state where you're doing the sales might say no, no, I want you to pay your taxes where you're doing your turnover. Or if you have employees, it will start say no, then there's a fight between the different states.

Jerome:

For us in within one country, that doesn't happen. Like if I'm living France, you won't have the south of France trying to fight for you to pay your taxes and south of France doesn't make sense. Yes, so this you have to learn. So here again, you need to speak to the professionals, because taxes, you can't play around with and it's once you've understood, you've understood it or you have someone doing it for you it really goes smoothly. It's also that in some states in the US the tax accuration is automated between Amazon and the states, but in other states it's not. So it's like navigating that and understanding that is a bit complicated and if you're not an accountant, you'd rather work with someone who's a specialist and we work a lot with, like AVASK, for example, or specialists who will help you navigate that. So for me, it's focus on what you're good at and try to outsource what you're less good at to make sure you don't make mistakes.

Bradley Sutton:

What are you using Pacvue for? For your clients and maybe you know, some people out there might be wondering what kind of amazon seller or large corporate or large company might have use for Pacvue as opposed to Helium 10. So what are you using now Pacvue for?

Jerome:

So I think, we probably started to work with Pacvue and Helium 10 both the same time, a long time ago. So I think we started in 2019. I think, the first agency in Europe using Pacvue. Basically, we were looking for a tool and what I did is I asked the teams. I said I don't want to take the decision. I wanted the really the users to audit the different tools and decide which one they wanted to work with. And they decided to work with, at that time, to with Pacvue.

Jerome:

What we did is there's a lot of rules on a lot of features sorry on Pacvue, for example, rules to like improve your campaigns and as an agency, you've got you know 50, 70, 100 brands you work with. So you have a lot of campaigns and you have to have rules which help you optimize. You can't be checking every campaigns all the time. So you have rules really helping you optimize things. So we've been using Helium 10 from day one also to understand the market, make research, and we've used Pacvue really to optimize campaigns and do a better job in terms of advertising for our customers.

Bradley Sutton:

Are you using Pacvue for non-Amazon platforms at all?

Jerome:

Yeah, so we've started to go on Walmart, for example, in the US. So we are using Pacvue on Walmart on the platforms in Europe. Not all of them are linked on Pacvue because some of them are smaller. So it really depends. But on the major, we try to use Pacvue, as much as possible, because it's our sort of system of record today in the company.

Bradley Sutton:

And Helium 10, what is your team using Helium 10 like? What particular tools or what kind of strategies are you guys using?

Jerome:

So they are using it every day, I would say. So they are checking on the consulting side. Our consultants are checking, like the Market Tracker, for example, or the keyword researchers, like, example, when you were saying, okay, should we go into a new market? Okay, let's see what. You know how many researchers are done on the brand or on the type of product. Then the teams are also working when they're doing their SEO, like checking, you know, keywords and backing keywords and also campaign keywords. They checking all of the tools.

Jerome:

For me, Helium 10 is amazing because each time I go, it's like, wow, there's so many tools and I feel like there's a new one each time. So I have a hard time keeping track of all of them but I know they're using it daily to really on one or the other bit to improve things altogether. And because we have a content team, we have an advertising team, we have a consulting team, an analytics team, they check different things, each of them for different purposes and Helium 10 has always been amazing to me, like the amount of wealth and value they provide on so many things and that's as a day, as I said, a day to day tool we use.

Bradley Sutton:

Okay, excellent. Now what kind of, you know, strategy help that can you give to our users? We usually ask our guests like, hey, give us a tip or a strategy. You know it could be about international expansion, could be about PPC, could be about health, could be about which French football team to follow. Anything that you want to talk about. What some strategies you can give our listeners?

Jerome:

So, yeah, I'm not a big soccer man so I won't go there because I might embarrass myself. No, the thing I typically say when you talk about global expansion is there's a lot of potential but there's a lot of hurdles. So probably you want to start small or start focused. So if you're in the US and you want to go into Europe, maybe you start in Germany and or in the UK because language is easier. Just make a proof of concept, go there, be successful and then start to expand. Because if you start to go in six, five, six, seven countries, then you have five, six, seven campaigns to build, translations to do. There's a lot of work.

Jerome:

So probably do one, show that you can be successful in one of the European countries and then expand. Same in the US, you probably don't want to maybe take all of your catalog and take a smaller part of the catalog, make sure you're successful and then expand. So for me it's like start small and grow from there. Learn, try to learn. Because international we're talking about earlier with other people today is like, you know, we say they're saying culture eats strategy at breakfast is like cultural things are very strange, like what happens how customer behaviors are different. So get used to it and to start with something and build on it.

Bradley Sutton:

Love it, alright. Now, one way I know people can find and reach out to your company is if you go to hub.helium10.com type in E-C-O-M-A-S. Is that right? What are other ways that people can find you, your company, on the interwebs out there?

Jerome:

So we're very vocal on LinkedIn and the team produces a lot of content on retail media on the street topics like retail media, technology and global expansion, so we do try to share as much as possible with everyone. I was honored to be named one of the Amazon Retail Media Advertising Ambassadors, so one of our job is really to share as much content as possible on advertising specifically and one of the advice I gave it was about globalization. If I talk about retail media is like AMC. Amazon marketing cloud is one thing which today is open. Really, if you're doing DSP and PPC, hopefully tomorrow it will open to PPC also only. I would really recommend people to look into it. This is giving you advice, like learnings, which will get you to the next level in terms of advertising.

Bradley Sutton:

What is the first thing that somebody just getting into DSP or AMC? What is the first thing they should maybe if they're just getting their feet wet?

Jerome:

So one feature, for example, which is already in Pacvue, which is day parting with AMC you will get even more granular information, a bit like with Facebook. You will know we've run some studies for some of our brands where you get information on the persona, like who is buying your products, like is it you know male, what age, what location, and then you can tailor your messaging, your content, everything you're doing, to really focus on that target customer you have. So that's one example and there's many others you can bring on AMC. We're just starting and people are just starting to get like insights from it. So for me, it's like get first, get into it, and it's not super easy so there's a bit of a barrier to entry. So, once again, either you can, you have got enough knowledge to go in yourself or ask for people for support, and there's a lot of great people. We can help. But there's a lot of great people on AMC which can really help you. Pacvue, for example, has got embedded some AMC features already. So I really look into it because that will be a game changer and for me, like they will probably be a change of like a crossroads people getting into it and who will win? And the others lagging behind.

Bradley Sutton:

Okay, all right. Well, thank you so much for coming on and hopefully, see you on my side of the pond next time.

Jerome:

Indeed, thank you very much.

Bradley Sutton:

All right. So our next guest is one of the hosts for today from AVASK. We're in AVASK, Frankfurt office. This is not your main office. I believe the main office is in London.

Jacob:

Southampton, so it's about an hour south of London.

Bradley Sutton:

We're here in Frankfurt, Germany. And this is Jacob, who I met originally in Korea, spoke at an event that I did over there. And what is your title here?

Jacob:

So I'm the head of business development and commercial services, so responsible for client acquisition. You know have a team based here in Germany, in UK, in Spain and in Italy. So we're supporting, consulting clients, helping them expand.

Bradley Sutton:

Okay. Now, how did you get into the e-commerce world? Like, what's your backstory? What did you? Where did you go to university? What did you study? And then your entry into the job world.

Jacob:

Okay. So in terms of studying, I actually did Creative Media in college and then just directly went into working straight from there. So I started as an Account Manager for a finance company and then transitioned to AVASK. I've been here for five years. So that's the kind of a short background but yeah, been at the company for a good amount of time now.

Bradley Sutton:

Okay. Now, last time we had somebody from AVASK was Melanie, was on maybe, probably almost three years now ago. There's some people who might not know about you guys. So you know elevator pitch with an amazon seller and elevator. How do you tell them what you guys do?

Jacob:

Yeah, so we help people expand cross-border, so getting to different markets and try and make it as frictionless as possible. Kind of the biggest area for us and kind of the one we've been working in the longest is Europe. So supporting US sellers, you know, Chinese sellers, European sellers, sell all around Europe but that's not it. But like kind of in a nutshell, that's our main service, but essentially we help people get into different markets and make it as frictionless as possible.

Bradley Sutton:

Okay, so now you know, we just had Jerome on a couple minutes before you. He talked about some of the you know things that people need to be concerned about going from US to Europe, vice versa, maybe going to another marketplace. And he mentioned you guys too. So let's talk a little bit more in the weeds. About some of the you know, like this is what I call the unsexy side of e-commerce. You know the sexy side is PPC and Keyword Research and finding new products and developing your brand. The unsexy side is stuff that actually is arguably even more important, you know, getting your taxes in order and your business entity. So we touched a little bit with Jerome about the VAT and things like that.

Bradley Sutton:

But let's, let's dig into it because, like me, it just I've never sold. I've never done VAT here myself in Europe, and it's for a lot of, you know, US base sellers, like it's kind of like this monster of a thing that we have to worry about. Like, do I need to get it in every country? Do I have to report to every single country? Is it only if I am at a certain level of sale? So you are very familiar with what American sellers probably need to be educated on as far as this goes. So just take it away and let us know what we need to know about VAT in Europe to start, I would say, there's a bit of a, especially in the us.

Jacob:

I've been at the company for five years. Especially now over the last few years, has been a lot more regulation introduced in Europe. So when I first started at the company, there was a lot more US sellers who were interested in expanding because there was less regulation and people weren't as advised. But governments have caught up a little bit. There was a lot of that fraud so people weren't actually paying VAT. And that's not just you know American sellers, that, sellers from all over the world. But now marketplaces are Amazon a lot more regular, regulated, so they have to enforce it. So it stops people from wanting to expand. You know a lot of Americans they say, okay, VAT, how do I do of that? Okay, they don't worry about it, and I think that's quite a lot of the story in America.

Jacob:

For a lot of clients that I've spoken to, essentially VAT, like the system that we have in Europe, and in lots of other places as well, is completely different to the US system. Obviously, the US system, you have tax added on at checkout so you only have to worry about pricing your product and then in the majority of places, i.e. Amazon, and they're going to add the tax on, whereas here in Europe, you are responsible for adding the tax. So when you're listing your product, so you know, if you create a new listing and you need to make sure you include VAT. So I've had lots of customers who want to expand into Europe. They've gone for it. They didn't consider that the VAT would be part of the price that they actually put on the listing. And then you know, a month later, two months later, they've got the VAT bill and they have to pay that and they hadn't actually priced it into the product.

Bradley Sutton:

So like you're saying, like the buy box price should indicate it or it needs to be, it's separate?

Jacob:

No, it's just inclusive. So like, if you list your product for 24 pounds, for example in the UK, that 24 pounds is inclusive of the VAT. That's not going to add any VAT at the end.

Bradley Sutton:

What is the approximate VAT?

Jacob:

So for the UK, it’s 20%.

Bradley Sutton:

So that means if I've got a product that I'm selling for the equivalent of 25 dollars, let's just say, I need to make that at least like 30, 31, 32 dollars, to include that VAT, because that's what I'm going to end up paying the government.

Jacob:

Yeah, exactly. So you have to look at the net price. So 25 dollars add to the 20 percent, so add another five dollars to get it to 30. And then out of that 30 dollar sale, once it's converted, the portion which was the five dollars would be paid to the government and the rates are there or there about. So like we're here in Germany right now, the rate here in Germany is 19% so slightly different, but there are there abouts.

Bradley Sutton:

Now in America, you know, after three years ago or so, we have the Marketplace Facilitator Rax. You know, like that was a huge headache before, where people didn't know in America. Like, all right, I live in California, I know I got to pay California Sales Tax, but you know, do I have a Nexus or whatever we call it in all the different states. And then Amazon's like or actually all online marketplaces were like there's some law passed or something where it's like, all right, you guys are the ones who have to collect it. Now we as Amazon sellers, hopefully we don't have to. That's what I've been doing. We don't have to worry anything about it. We don't add it to our price or anything. The customer is paying for it but Amazon collects it. They remit it. Now in Europe, what it sounds like number one, we do have to add it to the price, as you just said. And also, Amazon is not remitting that. I've got to hold on to that money.

Jacob:

And then so previously that would have been correct. But as of a couple of years ago, Amazon and now and marketplaces are responsible for collecting and remitting VAT for non-European and non-EU sellers in the EU. You still need to price it so, like in that example we had, that was $30. That $5 would actually be deducted from you and be paid to the government on your behalf. However, you still need to report all of those sales via VAT returns in different countries where you've got different liability, like similar to Nexus. Nexus means you've got a liability, basically. You'll have to get a VAT number when you have a liability and you can create different liabilities and free different kinds of means, but the actual money will be deducted and paid by Amazon but you still have to report it.

Bradley Sutton:

So that's at least one burden off. And then now is Amazon withholding that from your disbursement? Then each two weeks?

Jacob:

Yeah. So that would get completely withheld. So Amazon should be withholding it and then paying it on your behalf.

Bradley Sutton:

Okay. Scenario A, I plan to open in all European marketplaces plus UK. So UK, Germany, France, Netherlands, Spain, Italy, et cetera, et cetera. How many VATs am I needing to register for?

Jacob:

Depends. So you've got options. So with Amazon, you've got options for how you can actually use the FBA system. So, like obviously, in US, you send to a single FBA center. You have no control over where they're good to go. Amazon can transfer them to different warehouses. It's one country. It's lots of different states, lots of different tax laws, but it is one country, whereas with Europe you've got many different countries. So UK, we separated from the European Union the free flow of moving goods essentially. So whenever good to travel from UK to EU, they need to go through official borders. So customs checks, there needs to be paperwork, there needs to be declarations, et cetera. A lot of sellers now treat the UK separately and they just have their own separate supply chain directly into the UK. You need a VAT number there as a US seller so you can store your products there and sell your products, whereas in Europe, for FBA purposes, you've got options.

Jacob:

Amazon have their main fulfillment centers in Germany, France, Italy, Spain, Poland and the Czech Republic. You can select which ones you want to have your goods in. Whichever country you decide, you allow Amazon to store. You've got an Enable Infantry Replacement on a Seller Central so you can disable and enable. If it's enabled, you have to have a VAT number because Amazon store your products there and that's creating a Nexus. Essentially, you create a liability. You've got to have a VAT number there.

Jacob:

So you could just start with one for the EU and you can list your products. So you could say right, I'm going to store my products in Germany, I'm going to list them in Italy, I'm going to list them in France, I'm going to list them in Spain, but they will all be fulfilled from Germany. Now the pitfall to doing that is Amazon charges you a significantly larger fee for fulfillment. So whenever I speak to sellers as long as they understand that because I've got people who you know they only want to get the one VAT number, because getting six or seven or however many you need to get is complicated and it means a lot of paperwork et cetera to get set up but at the same time, they don't quite realize the Amazon fees that you get charged. And I've come across cases where, yeah, it was an extra three or 4,000 pounds to get the VAT numbers but they ended up spending extra 40,000 pounds in fulfillment fees. So, like understanding, that's quite clear, but you can start off with not too many, which makes it easier for sellers.

Bradley Sutton:

A lot of American sellers are very familiar with rough costs of like tariffs and importing custom duties from China to the United States. Some have more. That's why you know maybe some people are moving their factory to India or other places. How does it compare, though, because most I would say 90% of Amazon sellers are probably manufacturing their products in China or India? How does the custom duties and tariffs compare on a percentage wise importing to the US as opposed to importing to Europe? Are there differences between like UK and EU?

Jacob:

Yeah. Depending on the products, the UK and EU used to have the same tariffs because of the UK separation. We've got the UK Global Trade Tariff and EU's got what's called the TARIC system. The rates for those two systems I would say probably 99% of the same and that will change over the course of time, but it wasn't going to all change immediately. There is some differences but you might find certain products have much higher rates in Europe. So you also get anti-dumping duty.

Jacob:

I'm not too sure if there is anti-dumping duty in the US, but this can be products that might be damaging to the environment or harmful to the environment so they put the rates up really high. But understanding it before you actually start shipping the products is easy to do. As long as you've got the right people to do it. You can understand the rates, understand if there's a difference between the rate. One thing you do need to be careful of, especially as a US-based business, not just US as a non-EU-based business, the particular country we're in right now, Germany the way that they look at imports for non-EU-based companies is sometimes different to an EU-based company. So I've had a lot of clients who they've imported stock directly from their supplier in China or in India into Germany, and the German customs office have revalued that stock. So instead of using the transactional value, so the cost of your products, the insurance and the freight, say €10,000, they've looked at it and they've taken the retail price and then minus Amazon fees, minus VAT, so to say 60% of retail, which then that 10,000 does end up getting to 50,000, and then they've been charged 5% on the 50,000 instead of 10,000, so suddenly you've got five extra costs. So that's something to look out for and be aware of, because I've seen it happen quite a few times.

Bradley Sutton:

Okay. Now, before we get into your last strategy of the day, just as a reminder, if this is all overwhelming to you, it's not something that you just can't ignore and pretend that it's not there. It's stuff that you have to take care of if you're doing cross-border or getting into new marketplaces. If you guys want to reach out to AVASK, the easiest way to remember to contact them just go to hub.helium10.com and then just type in AVASK, A-V-A-S-K right there inside there you can have the portal. There might be some specials depending on your level of Helium 10 membership that you might have available to you. Other ways that people can find you guys on the interwebs out there.

Jacob:

Yeah, so all the general means like LinkedIn, Instagram or just avaskgroup.com, so A-V-A-S-K group.com, and yeah, you can contact us directly for those means.

Bradley Sutton:

Okay, all right. Now what's your last, you know, something I like to ask some guests is like a 30 or 60 second tip or strategy, that it could be about any topic you've talked about today.

Jacob:

Yeah, okay. So I would say, first of all, do consider Europe, but maybe take it slow, because there's a lot of red tape and there's a lot of history with American sellers in Europe and people getting stung by governments because of certain situations that happened in the past. Things are different now, so there's a lot more regulation that makes it easier for sellers to make sure they're doing the right thing, but it also puts more barriers to entry. You can start small. Like I said, you don't have to go for all of the countries. Start small with one.

Start looking at the other countries, so like if you wanted to start in Germany, what are the biggest markets? Open your listings in the other markets and see if you start getting sales trickle in and then kind of make targeted decisions based on where you start to see growth. And that's what I think is good because we get a lot of people that are like right, I need to go for everything, I need to go for it straight away. Some cases really good, some cases they don't get the sales they expect and then they have to attract. So, depending on your position, obviously, would depend on what you decided to do, but if you're just considering it, you're not sure. Try that way because you're limiting your exposure in terms of compliance. You can start off small, your costs are lower and you can just see how the market goes.

Bradley Sutton:

Alright. Well, thank you very much for sharing your knowledge and thank you for hosting us here for our first onsite podcast here in Germany and our AVASK and Helium 10 Elite event, and maybe we'll be seeing you at a future conference again.

Jacob:

Thanks, Bradley.