New PAN-EU feature 2019: Different VAT, same margin
Amazon has announced to change how prices for Amazon sellers using Pan-European FBA are set. The goal is that the margin for product stays the same, regardless of the country of export. This article will give a brief summary on the new system and how PAN-EU sellers can profit from it.
E-Mail to Amazon Sellers
Many PAN-EU sellers have recently received an e-mail that looks like the one above. And now they can take advantage of the new way to set their prices.
But what is actually new?
As mentioned before, consistent prices for all PAN-European FBA offers is the goal of these changes. Not only the estimated fulfilment fees are taken into consideration, but from now on, the estimated VAT rate differences between the different European countries are taken into account as well. This makes calculating the prices easier than ever before.
The adjustment of the VAT when it comes to pricing means the following:
Let’s assume you are from Germany and the sale price of the item you sell via Amazon‘s PAN-EU FBA is €100. The base price is the price of your main marketplace. Now, when selling an item abroad (to the marketplaces of Amazon UK, IT, ES, FR), the VAT and the shipping costs are added, and therefore the prices are adjusted, automatically. This leads to the same margin, no matter where you are selling to.
You can also see that with this feature the Amazon comission is raised, as it’s a fee based on the gross sales price.
How to activate this feature?
This is a step-by-step guide to actiavte this new feature. For more information, visit Amazon’s Pricing Page and scroll down to Pan-European FBA price rule example. Now, step by step:
- Set up up your international pricing in your sellers central. Go to Build International Listings and click on Connection Settings.
2. Choose the markets on which you want to offer your products and save your settings.
3. In the second step on the right you find your offers and copy them to additional marketplaces. Set you fulfillment type and choose if you are selling only new products or used ones as well.
Note: you need to have an ASIN on the target marketplace site.
4. Now the pricing rules are displayed with the according sites of each target market. Now this is where we want to go to.
5. To finish the process, determine the rules for the products for each marketplace you want to sell to. Done. The new pricing ist set.
The former method [Country of Origin plus X Euro or plus X %] still works, but why not making use of a tool that makes calculating your prices easier than before? Here you can find Amazon’s tool to Build International Listings.
A special thanks goes to Timo Boettinger for sharing this new feature with us.