Every market has its own peculiarities, not only in terms of demand or customer mentality, but also in terms of economic and political aspects of doing business. What is the difference between Amazon Europe and other markets in this context? Let’s find out.
How Amazon does business in Europe
The first thing that is important to understand when analysing the market is the company’s share in total sales. In the US, Amazon is the largest player, accounting for about 50% of all online purchases. In the EU, this figure is much lower. However, the platform is increasing its influence every year by actively developing a network of fulfilment warehouses and lockers.
The main difference in terms of building a business is local legal requirements and trade rules. For example, Europe has stricter consumer protection rules than the US.
Moreover, you will not be able to build a business on Amazon in Europe as an individual (due to the need to pay VAT (analogous to our VAT).
Secondly, the differences relate to the demand for certain products and categories. For example, in the US, household goods are popular, while in Europe there is a high demand for fashion and cosmetics.
Third, the differences are related to competition. As mentioned above, Amazon has a higher market share in the US than in Europe, which may affect the terms of sale and competition between sellers.
Where is Amazon in Europe?
The main marketing feature of the company, for which it is loved by millions of customers around the world, is fast delivery by paid subscription (maximum 2 days).
Moreover, it is Amazon Prime that provides the maximum share of the marketplace’s revenue. That is why Amazon’s warehouses are the main factor behind the corporation’s success in the new market.
Amazon is currently present in 13 European countries, 10 of which are members of the European Union.
Prospects for building an Amazon business in the EU
As the largest marketplace in America, Amazon wants to achieve a similar status outside of the country (and has all the capacity and capabilities to do so). Accordingly, entering the European market is a great prospect for the entrepreneur.
It is clear that it is simply impossible to capture 100% of the US market, so sooner or later the corporation will reach its peak and start active development in other countries. Thus, successful sellers who have already gained experience and recognition from buyers will be in the most advantageous position at this point.
In addition, let’s not forget the issue of relatively low competition, which makes it much easier to find suitable goods for sale.
Another prospect is “personal motives”. Many countries issue permanent residence permits when starting a company, so for some entrepreneurs, entering the Amazon Europe niche is not only a way to build a business, but also an opportunity to legalise.
Disadvantages and features
If you’re interested in the question of how to sell on Amazon in Europe, you’ll quickly come to the following conclusions:
1. In terms of business activities, everything is similar to the US. Product search/purchase/shipping to FBA warehouses.
2. From the point of view of marketing and promotion, everything is much more complicated. In the EU, each country has its own peculiarities, language, product requirements, etc. Although the market is large in general, it is still fragmented, and you need to create different advertising campaigns for each country.
In other words, we conclude that only the brand promotion model differs as much as possible.
But don’t let such issues become a barrier to the realisation of your business ideas. With the power of our company’s Digital department, you won’t notice the difference and won’t get any headaches. We will analyse your idea and product in detail, assess its success in different territories and help you identify new markets. Contact us now for a free consultation on this issue.