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How Will Brexit Impact Brands and Sellers on Amazon?
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Brexit, the departure of the United Kingdom (UK) from the European Union (EU), took place on Jan. 1, 2020. Although the UK is no longer part of the EU, businesses have not been impacted, as existing agreements are being honored during the transitional period.
However, starting Jan. 1, 2021, new regulations will go into effect for companies who sell products in both the UK and EU.
Trade between EU member countries have been operating smoothly due to the Customs Union and the Single Market. The Customs Union only sets tariffs for goods that are entering the EU from non-member countries. The Single Market offers an effortless exchange of money, goods, and services across countries that are EU members.
Brexit will transform commerce on Jan. 1, 2021, as the UK formally withdraws from the EU’s Customs Union and Single Market. The UK will be considered a third country and UK businesses will no longer be able to access the Single Market. Instead, companies will trade with European partners and abide by the World Trade Organization (WTO) rules.
How Brexit Will Impact Amazon Sellers
While negotiations between the UK and EU are currently underway, Amazon has announced the following changes for its selling partners so far, effective Jan. 1, 2021:
- FBA offers using European Fulfilment Network (EFN) will not be fulfilled across the UK-EU border.
- Pan-European FBA inventory transfers will stop between the UK and EU (however, Pan-European FBA will continue to transfer inventory within the EU region, supporting your sales on the Germany, France, Italy, and Spain marketplaces).
- To mitigate the impact of these changes, you should consider splitting your inventory and sending it to a fulfillment centre in the UK and the EU to have sufficient stock on either side of the new customs border.
- This may require you to ship your products across the new UK-EU customs border and provide additional information as part of a customs declaration.
- Advantageous delivery speeds and fulfillment costs will no longer be available to sellers.
- Stock sent to an Amazon warehouse in Europe will still be distributed to other European warehouses, but it will not be sent back to the UK.
To stay up to date with the latest information regarding Brexit and how it will alter selling on Amazon’s marketplace, you can review the Prepare Your Amazon Business for Brexit help page in Seller Central.
Recommendations for Brands and Sellers
Brands and sellers who conduct business in the UK and EU through Amazon will need to change their shipping strategy. Amazon encourages sellers to utilize Dual Inbound since shipments to an Amazon Fulfillment Center (FC) in the UK will no longer be used to fulfill orders in EU countries.
Dual Inbound allows sellers to ship their products to an Amazon FC in both the UK and EU. Sellers can also avoid tariffs from being imposed twice by sending products to FCs separately. Note: Sellers will need separate Value-Added Taxes (VATs) for each country that holds their inventory.
Below are the steps required to start using Dual Inbound:
- Register for VAT in territories required (consult your tax adviser if necessary).
- Ensure that you have the correct Country of Origin (COO) for your ASINs and update Vendor Central.
- Identify the appropriate Harmonised System (HS) Codes for your goods.
- Register for UK and EU Economic Operators Registration and Identification number (EORI) numbers.
- Determine how you will handle declarations for customs (Amazon recommends using a third party, such as a customs broker, and onboarding them immediately. The UK government provides a list of agents here).
- Meet both the UK and EU product compliance, labelling, and conformity marking requirements.
- Obtain the necessary product compliance documentation.
- Obtain licenses and permissions from EU intellectual property rights owners, if it is required.
- Ensure you have a minimum of two Vendor Codes (i.e. the UK and at least one EU country).
Brands and sellers should also be mindful that their EU trademarks will no longer be valid for the UK due to Brexit. The UK Intellectual Property Office (IPO) is creating a comparable UK trademark for holders with an existing EU trademark. Amazon will assist sellers in transferring the corresponding trademarks on their accounts.
Brands and sellers who sign up for Brand Registry by Dec. 31, 2020, will receive the comparable trademark by Amazon automatically. Sellers who enroll in Brand Registry after the cut-off date are responsible for providing their UK trademark.
Brands and sellers can upload their UK trademark by following the steps provided:
- Log in to your Brand Registry account.
- Click on “Support” on the Brand Registry dashboard.
- Select “Update your brand profile” from the drop-down menu.
- Click on “Add additional trademarks.”
- Complete the form and submit.
Brexit will impact commerce starting on Jan. 1, 2021. The UK will withdraw from the EU’s Customs Union and Single Market. Trade will work differently, as the UK will no longer be able to ship goods freely across the EU like it used to. Although the UK and EU are still negotiating terms, Amazon has announced how Brexit will change business operations for sellers with the information that is currently available.
Brands and sellers should use Dual Inbound since it enables them to ship their products to Amazon FCs in both the UK and the EU. The feature is valuable as a FC in the UK will not be able to fulfill purchase orders from countries in the EU. Given that Brexit will also affect trademark laws, sellers who have a EU trademark should sign up for Brand Registry by Dec. 31, 2020, to automatically receive a comparable UK trademark.
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