British businesses and consumers alike could be left high and dry this year after Amazon confirmed some items may no longer qualify for its logistics service.
The online giant has warned third-party sellers in the UK using its using Fulfilment by Amazon (FBA) service that it can no longer allow them to transfer products into Europe once Brexit comes into force.
The changes are set to come into force in January if the UK leaves the European Union as part of the Brexit process, meaning Amazon Christmas deals and January sales could be affected - possibly leading to higher prices for customers.
- Amazon Prime Day 2020 UK: potential deals and postponed October date
- Check out the best ecommerce hosting providers
- These are the best shopping cart software of 2020
Fulfilled by Amazon
The news was disclosed by The Information, which spotted that Amazon had quietly updated its "Brexit guidance" page for merchants several days ago to state, ‘FBA offers using EFN (European Fulfilment Network) will not be fulfilled across the UK-EU border’.
This advice adds that UK sellers using the company's Fulfilment by Amazon (FBA) service will be forced to ship their products to an EU-based Fulfilment Centre, where they will then be distributed using EFN.
EFN allows sellers based in the UK to fulfill orders from any Amazon European marketplace using just one Fulfilment Centre, such as the UK. This means that UK sellers can create and post listings on Amazon’s EU marketplaces, but fulfill those orders using UK stock shipped directly from the seller’s UK warehouse.
Using EFN does incur high fees, but opens up sales into the EU for UK-based sellers, as well as getting around the need for VAT numbers, and avoiding a lot of red tape in European countries.
Sellers who take no action or decide not to send stock to an EU centre could find Amazon stops shipping their items to buyers in the EU in January. This halt could even come before Christmas if Amazon looks to move proactively to halt a possible red tape mountain building up in 2021.
After January 1, UK companies selling to customers across Europe will need to send all stock to an EU Amazon warehouse at their own cost. This means many sellers will end up paying more in storage and transport, as well as VAT rates in whichever EU country the warehouse is in.
All of this could lead sellers to raise prices in order to cope with these increased costs.
The move has been forced by Brexit, which sees the UK leave the EU’s single market and customs union. So far, the UK government has not agreed any kind of deal with the EU to solve these issues, but says it remains in talks.
Amazon will be keen to avoid having items bunch up at ports and logistics centres across the UK and the continent, especially with Christmas sales expected to be bigger than ever this year due to the ongoing global lockdown.
- Setting up an online store? These are the best e-commerce platforms
Via: The Information