You want to start selling online on Amazon or expand existing business on Amazon. It goes without saying that selling on Amazon brings benefits. Access to huge buyers and logistics outsourcing (Fulfilment by Amazon) are just a few benefits that selling on Amazon has. There is also the question of which marketplace you are going to sell on. For most British entrepreneurs, sales on Amazon Germany are obvious as it is the biggest market European market next to the UK. Because of this, it is useful to know what to expect as soon as you start in this country!
E-commerce in Germany: the figures
With more than 83 million inhabitants, the country has about 17 million more inhabitants than in the UK. A very interesting sales market. In addition, figures of The Future Shopper show that 44% of purchases were made on Amazon in 2020. Other major players include the Otto and Zalando, founded in Germany. Amazon.de is also frequently visited by surrounding countries such as Austria, Switzerland, Belgium and the Netherlands.
From the customer’s point of view, it makes sense to shop on Amazon. Amazon is an online store where you can buy anything without leaving the domain. You can pay in multiple ways, choose from a variety of shipping options, and you have plenty of options to return your purchases. That way, Amazon ensures that the customer is always right. In addition, Amazon in Germany is used over Google to inspire purchases.
For sellers, sales on Amazon are lucrative. Germany’s e-commerce market grew 14.6% in 2020 with a total revenue of €83,3 billion (!). Looking at the percentage of purchases made on Amazon, that provides enough perspective for starting sellers on Amazon in Germany.
Most customers in Germany like to shop in games and computers, electronics and technology categories. If you do not have a plan on what type of products you are going to sell, this could be an option. More information can also be found here.
AMAZON SELLER CENTRAL ACCOUNT REGISTRATION, HOW TO GET STARTED?
In order to sell through Amazon Germany, you must sign up to Amazon.de as a seller. You can do this on the Amazon Seller Central registration page. At least make sure you have the following at hand:
- Email address
- Business and contact information, including your Chamber of Commerce number and VAT number
- Personal information, including a copy of your passport or driver’s license
- Mobile number
- A valid credit card (direct debit from your bank account, iDeal, Paypal etc. are not accepted).
It may be relevant to read some Amazon verification dramas articles carefully, to make sure you don not make the same mistakes.
Once you are registered, you can start selling on Amazon Germany!
To sell on Amazon, you will need to add your products to your Seller Central account. You can upload products manually or in bulk. Once you start selling a product that has been around for a long time, for example, when reselling products, chances are you can already find a listing on Amazon. You will then have the option to sell your products on the already existing listing. The advantage of this is that you do not have to write German product texts and you can ride along with the accrued ranking of the product.
Of course, as an Amazon seller, you can also add your own products to sell. This often involves private label products, which are not sold by other sellers, and protected by trademark registration. The advantage of this is that you are in control of the product photos, texts and other optimization needed to make the listing attractive.
TRANSLATE INTO GERMAN TEXTS
Just like British customers, Germans like to read correctly spelled product listings. In addition, it is important not only to wrap up your text with keywords, but also make it readable as a whole. This creates trust and you can explain to your customers why they should buy from you. Texts that are full of errors in combination with poorly translated sentences from English to German are easier to create, but it does arise suspicion. Therefore, if you do not speak (fluent) German, it is definitely advisable to use a professional translator for this. It may be a small upfront investment, but if it increases your conversion rate by just 1%, you will earn it back in no time.
There are multiple translation agencies specifically created for Amazon translations. One of the major players in this area is Translated, but through Fiverr or through the well-known search engines, there are plenty of translation agencies to help you with this.
EMAIL MARKETING VIA AMAZON GERMANY
Next to translating your listings, it is wise to think about how to get reviews on those listings. One way to achieve that is to set up an email campaign through Amazon. You can do this with FeedbackWhiz or Jumpsend. If being well set up, this is an effective way to make sure you get reviews. This improves the reliability of your product and increases your conversion rate. Please note that your emails are translated correctly to German.
WHICH FULFILMENT OPTION SHOULD YOU CHOOSE?
Before the first German customers place their orders, you want to make sure you have thought about logistics. Are you going to ship the products to Germany (Fulfilled by Merchant) yourself? Or do you leave this to Amazon with the Fulfilment by Amazon (FBA) program?
Fulfilled by Merchant
If you choose to ship products to Germany yourself and you are already working with a logistics party, make sure you keep an eye on the distance threshold. As of January 1, 2021, the distance threshold has been reduced from €100,000 to 0,00 for UK sellers. Therefore you will have to pay VAT in Germany, no matter the amount of sales you have. Want to know how it works with distance sales exactly? Read the VAT page in Germany, where we elaborate on this topic.
Fulfilment by Amazon
For a large part of the sellers, it’s absolutely interesting to consider Fulfilment by Amazon (FBA). The entire order logistics can be outsourced to Amazon, generally at a very competitive rate. You only need to make sure your products end up in one of Amazon’s fulfilment centres, from there Amazon takes over.
What you need to consider is that you are sending your inventory to Germany in this case. This will automatically make you VAT liable in Germany, regardless of the amount of your sales. You can read how this exactly works on the VAT page in Germany.
European Fulfilment Network
If you choose for Amazon FBA, you will need to specify how Amazon should handle your products. This is particularly relevant for sales outside of Germany (for example, if someone from France buys your product on Amazon.de). One feature is the European Fufilment Network. Your stock will be in Germany. When selling in France, your product will be shipped to France from Germany. The advantage is that you still have to pay your VAT in Germany (until you reach €10.000,- in sales to France and other EU countries), the downside is that you are dealing with cross border fees, which makes selling costs higher than desired. This can only be about a few euros per product. You can also turn off the export feature, we definitely recommend doing so if your margin gets too minimal. Especially because multiple countries means more complex administration. Only start with this when you are ready for it.
Pan European Fulfilment
Amazon also has the Pan European Fulfilment (PAN) program. The advantage is that all you have to do is send your products to Germany and Amazon spreads your products across other countries in Europe. If you sell outside Germany, you do not pay cross border fees because your stock will already be lying in other countries. This implies that you will be liable to VAT in other countries outside of Germany. Often this entails a considerable administrative burden and it is not advisable to start as a start-up immediately. You cannot use the OSS for this because your stock will be stored in other countries, these are no cross border sales.
EXPORTING PRODUCTS TO GERMANY
When you export products to German customers, most of the time you have to pay their 19% VAT rate, not the English 20%. The import of a larger batch to an FBA fulfillment center means two things:
1. You have to clear your shipment at customs. You can do this yourself or have a Freight Forwarder do this on you behalf as Importer of Record.
2. You will have to pay 19% VAT at customs for importing the goods. You can retreive this amount when you file your monthly VAT. More information about VAT can be found here.
German Package Act
Entrepreneurs who are going to sell in Germany should take into account the fact that Germany has got environmental legislation that focuses on packaging. Also known as the VerpackG. The VerpackG was introduced to make sure that the company that sells packaged products for the first time on the German market must ensure that the packaging will eventually be retreived and recycled in the prescribed manner. However, for many entrepreneurs, it is (obviously) an unbeatable job to retreive the packaging from every customer. For that reason, you can register in the national register “Stiftung Zentrale Stelle Verpackungsregister” and with a recycling/waste manager to take this process out of your hands. You pay a fee per type and quantity of packaging to get this done properly. Read here how this works en how we can help.
It is important to know that your registration is visible to every entrepreneur in Germany. If you are not in this registry, competitors can report you to Amazon and your account will be blocked until you can proof you are registered. And yes, this actually happens…
Setting up your own webshop alongside sales on Amazon Germany
For most entrepreneurs, it is interesting to set up their own webshop in Germany, possibly in addition to selling on Amazon. Although setting up our own webshop is not the main goal of Amazonsellers.co.uk, we have come across quite a few things that are interesting and relevant to mention.
Registering a German domain name
Once you want to start doing business in Germany through your own webshop, you have to register a domain with country code .de. The simple reason: the .de extension creates trust with German customers in the same way a British customer likes webshop with the co.uk extension more than .de webshops.
You can easily register a .de-extension at companies like Webhosting.
As in the United Kingdom, privacy is an important topic in Germany. However, German legislation on privacy, Impressum (Imprint), copywriting, data protection and data storage is quite strict. Perhaps the most important part of this is the Imprint. The Imprint is legally required for written media, including websites and webshops. The Imprint indicates who owns and has copyright. If you do not have this information, just like the VerpackG, agencies or competitors are actively checking it and them reporting you will require you to take care of it (for high fees or fines of up to €50,000). Next to the Imprint you need to have a Datenschutzerklärung, which explains how you deal with personal data.
Payment processing works slightly differently in Germany than in the UK. Where British customers are used to paying with Credit Card or PayPal, Germans prefer some other payment methods. Germans love to pay by Klarna and pay via PayPal, credit card or SOFORT-banking. The latter is nothing more than a bank transfer and gives the German confidence in your webshop. In any case, it is important that you use at least one free payment method in your webshop.
Integrating multiple payment methods into your webshop does not have to be complicated nowadays. With platforms like Stripe, this is often easy to set up.
Bereit? Viel Glück!
Hopefully, the above article has given more insight in challenges and oppurtunities coming with selling in Germany. It may seem rather overwhelming beforehand, but ultimately selling on Amazon is worth it! If you have any questions about selling on Amazon, feel free to join the Amazonsellers Community. A free community full of experienced sellers. The answer to your question is definitely included!