Matthew Ferguson explains the differences between Amazon’s array of cross-border shipping services
I sell video game accessories on Amazon and eBay in the UK. I use the Global Shipping Program for international orders through eBay, and it works really well. Is there anything similar for Amazon? I have my stock in Amazon FBA in the UK already, but there doesn’t seem to be a way to send it from there when people order from Amazon.com in the US. Am I missing something? What are my options for shipping international Amazon orders?
— Simon M., Nottingham, UK
I’ve said it before, and ended up proving myself wrong, but this might be a short and not-so-sweet reply.
To put it plainly, the reply is “no”. Amazon does not have a model like eBay’s Global Shipping Program (GSP).
Instead, they have a ton of acronyms to figure out! But just before we go there…
Hang on, GSP?
Just to ensure we’re all on the same page, eBay’s GSP is a service you opt into (either per listing or for your entire account), which allows you to sell globally without the hassle of shipping internationally.
How it works is simple. You enable this feature, and eBay will allow buyers from all included territories the opportunity to purchase your product. When a buyer comes along, you receive an order – business as usual. However your ship-to location will be a domestic address, as you will be shipping to your nearest eBay warehouse hub.
eBay is going to handle the rest. They will ship the product overseas to the buyer, and handle all international rates and delivery issues. If anything goes wrong, eBay will take care of it and your performance metrics are protected so long as you get the right item out in a timely manner. Essentially, you get hassle free international coverage, without the international hassles!
The buyer’s final order might have a higher shipping charge than if you were securing your own international rate, but that often comes with tracking and account metric headaches. Especially for territories where addresses are less centralized and verified, or in areas where packages tend to get “lost” a bit too often for comfort.
GSP returns are your responsibility however, and PayPal fees will be higher for the international orders.
FBA and SFP. Acronyms galore!
Amazon’s main two competitive services are Amazon FBA (Fulfillment by Amazon) and Amazon SFP (Seller Fulfilled Prime). But neither are the same model as eBay’s GSP.
With FBA, Amazon is acting like a 3PL (third-party logistics provider). You are sending Amazon boxes or pallets of product, and they are acting as your warehouse fulfillment provider. This is a standalone service, which can even fulfill orders from other channels, like eBay or your own website.
SFP is a bit of a hybrid, and you need to qualify to benefit from it. In this model, Amazon couriers arrive at your warehouse once a day to pick up the orders. You still get the Prime badge and Amazon takes care of the shipment details (and hassles). Amazon is strict however, so you need excellent metrics to qualify, and you need to maintain consistently high shipment metrics to stay on SFP.
Neither of these however are the same model as GSP, although there are some similarities on the face of it.
More Acronyms! EFN and MCI!
Within FBA in Europe, you have what’s called the European Fulfillment Network (EFN). This gives Amazon the ability to ship product from your domestic Amazon fulfillment warehouse to international buyers. You have to pay an extra fee to Amazon per order, but it opens up your Amazon warehoused stock to new regions.
Multi-Country Inventory (MCI) takes the above model a step further, allowing you to ship product to different Amazon facilities located in different territories. This tends to be the adopted path when you have determined an opportunity in an international market and want to avoid per-order EFN. Using MCI allows you to truly localize stock to that territory, reducing lead times and increasing your overall service viability.
Pan European FBA is a further variation. Its pretty much the same as MCI, only in this model Amazon will decide where to move stock. In MCI, you tell Amazon you want to send a pallet to a new territory. In Pan European FBA adoption, you are allowing Amazon to do this for you based on the market’s buyer habits and Amazon’s predictions on product viability.
MCI is a little more limited than Pan European for Eastern Europe. MCI does not include some territories like Poland and Czech Republic, but Pan European does.
In these models, you’ll need to account for territory tax requirements (VAT). Each country is a little different, so you’ll need to spend time researching this or secure a service provider to handle it for you and guide you on requirements and thresholds for tax eligibility. More information on VAT for EU sellers can be found in Claire Taylor’s article Selling on Amazon in the EU? Your VAT Obligations Explained.
Amazon is conducting a new VAT pilot program, but it’s not yet clear if this will continue and roll out fully. It’s only available if you are already using Pan European FBA for all five regions, and appears to be invitation-only right now. Basically, in this new model, Amazon will “purchase” units from you when you receive an international order. You will get a domestic order from Amazon in your country, thus skipping the VAT registration hassles! Being new and not announced, you’ll need to contact Amazon support to find out the details.
However at the time I write this, there isn’t a link between European services, and North American services. To feed the US market in a similar FBA model, you would need to send product directly to Amazon USA fulfillment centers… and, sadly, although the new pilot program is close to eBay’s GSP, it’s not exactly a match, nor is it available to connect the EU to the USA.
Other options… um…
The only other option is to use a third-party logistics (3PL) provider to service the US market. But that would be similar to engaging Amazon US FBA, but without the all-important Prime perks.
Other US marketplaces have shipping services similar to FBA. For example, Sears and Newegg offer fulfillment services, but that’s not going to help you support Amazon US.
It’s all a bit complicated with names, regions and acronyms! Different services cater to different needs. Over time as markets grow closer together, I suspect Amazon will try to link Europe and the USA with some new cross-over services.
But sadly, as of now, there isn’t a perfect fit to address your need. The best you can do is FBA in the US, or a third-party logistics provider.