- What is Amazon EFN?
- What are the advantages of the Amazon EFN program?
- What are the disadvantages of the Amazon EFN program?
- When is the European Fulfillment Network the right program for me?
- What are the fees for the EFN program?
- How do I sign up for the Amazon EFN program?
- The EFN program for the United Kingdom and the EU
- Conclusion
As an Amazon seller, you have the option to completely entrust the shipping of your products to your customers to Amazon by utilizing the "Fulfillment by Amazon" program, commonly known as FBA. Within the FBA program, Amazon offers various FBA programs in Seller Central. These warehousing programs differ based on the countries where your goods are stored.
This article will introduce you to the European Fulfillment Network (EFN) program. With the European Fulfillment Network, you store your items in a single country, from which all orders are shipped.
If you're looking for a general introduction to "Fulfillment by Amazon," we recommend checking out our Amazon FBA article.
What is Amazon EFN?
The European Fulfillment Network (EFN) shipping program allows you to store your goods in various Amazon Fulfillment Centers within one country, for example, storing your goods only in Germany. All orders are then shipped from these warehouses to all other European countries. With the EFN program, you can sell on all European marketplaces (United Kingdom, Germany, Italy, France, Spain, Poland, Sweden, Netherlands) even though your goods are stored in only one country. This means that a customer can purchase your product on Amazon.es, with the shipping handled by Amazon from Germany.
In this program, you supply various fulfillment centers distributed within one country. Amazon assigns these fulfillment centers to you. For each product and delivery, Amazon calculates which fulfillment center you should supply based on factors such as item size, weight, sales history, and distance from the nearest fulfillment center. This can change for each delivery.
What are the advantages of the Amazon EFN program?
Amazon Sellers who store their goods in only one country can benefit from several advantages. We have summarized the key advantages for you:
- You only need one VAT identification number: If you store your goods, for example, only in Germany, you only need to register for VAT in Germany. You don't have to worry about any additional tax consequences.
- Inventory management is simplified: All inventory is managed in a single Amazon warehouse. Additionally, you only send your goods to German fulfillment centers.
- You pay lower return costs: Return costs refer to the costs that arise when your inventory is either returned to you or disposed of. If your inventory is shipped only within one country, the return costs are naturally lower than if products have to be shipped across multiple national borders.
- You can sell on all European marketplaces: Even though you store your goods in only one country, you can serve customers worldwide. This means that a customer from Italy can also order an item from you in Germany.
- You can manage your FBA inventory through a single seller account: This allows you to have your products and sales activities consolidated in one account for better oversight.
What are the disadvantages of the Amazon EFN program?
Before deciding to use the European Fulfillment Network, it's important to be aware of the program's drawbacks:
- You pay a penalty of 0.25 euros per unit sold because the "Central Europe Programme" or "Pan-EU" programs are not used: If Amazon Sellers use the EFN program instead of the CEE or Pan-EU program, they must pay a penalty for each unit shipped. The penalty was reduced from 0.35 euros to 0.25 euros as of March 31, 2022.
- International shipping becomes significantly more expensive: Since you store your goods only in one country, shipping to customers abroad involves longer distances, resulting in higher shipping costs for international orders.
- International shipping is associated with longer delivery times (from the customer's perspective): Since shipping originates from only one country, customers abroad can expect significantly longer delivery times.
- Customers ordering from abroad do not have Prime benefits: This means a potential loss in ranking compared to competitors who store locally.
When is the European Fulfillment Network the right program for me?
Based on the advantages and disadvantages of the EFN program, it's evident that the EFN program is especially suitable for starting on Amazon when the monthly order quantity is less than 1,000 units. Suppose your orders exceed the threshold of 1,000 units. In that case, you should consider the "Central Europe Programme" and "Pan-EU" programs, as the savings resulting from eliminating penalty payments in those programs typically outweigh the additional tax and accounting costs associated with them.
Furthermore, the EFN program is particularly well-suited for Amazon Sellers with a very homogeneous national customer base, such as a German customer base. Using the program, you can also ensure the quickest shipping routes and Prime benefits for German buyers.
What are the fees for the EFN program?
The storage costs are calculated independently of the storage program. Therefore, there are no fixed EFN fees, as storage fees depend on the products' location, product type, size, and weight.
The shipping costs that you must pay to Amazon for shipping a product to a customer depend, like storage fees, on the dimensions and weight of the sold item. Additionally, Amazon distinguishes whether the sold product is a media or non-media item. Typically, you sell the latter. However, shipping costs vary depending on whether you use the EFN or other FBA programs such as CEE or Pan-EU. Domestic shipping costs are the same for all storage programs. However, if you use the EFN program, you must pay a penalty of €0.25 for each unit shipped because you are not participating in the Pan-EU or CEE programs. Furthermore, shipping costs for orders abroad are significantly higher. For example, shipping to a customer in Italy costs €4 when using the CEE or Pan-EU programs. If you use the EFN program, shipping abroad costs €4.95. You can compare the shipping costs of the storage programs with each other in the table provided by Amazon.
Since you only store your items in one country, you benefit from lower remission costs, as local returns are naturally cheaper than cross-border returns. For example, a local return in standard size (501-1000 grams) costs €0.78, while a cross-border return costs €2.
You can find all the costs associated with Fulfillment by Amazon in our Amazon FBA Costs article. Furthermore, you can find all FBA costs in this document provided by Amazon.
How do I sign up for the Amazon EFN program?
You don't need to activate the program separately. Once you start using "Fulfillment by Amazon," you automatically gain access to the European Fulfillment Network. You can specify the countries where Amazon should ship your products through the export settings.
To access the export settings, click on "Fulfillment by Amazon" under "Settings":
Scroll down on the "Fulfillment by Amazon - Settings" page until you reach "Shipping programmes and export settings."
Click "Edit" next to the country where you store your goods. Now, you can choose between "Worldwide" and "Disabled." Selecting "Worldwide" will export your items to over 80 countries when customers request it.
Click on the "Exclude Products" link to exclude specific items from export, for example, items that don't need to be sold in certain countries. Download the template for this purpose, fill it out, and then upload it again. Additionally, under "Shipping Restrictions," you can exclude specific shipping regions.
The EFN program for the United Kingdom and the EU
Starting from January 1, 2021, items from sellers utilizing the EFN Program and storing inventory in the United Kingdom were only used for domestic orders and no longer fulfilled orders in other EU countries.
However, as of March 22, 2022, the EFN Program is once again available for shipping between the United Kingdom and the EU, one year after being temporarily suspended. To access this, navigate to "Settings" and click "Fulfillment by Amazon." Scroll down the page until you reach the section titled "Settings for Cross-Border Shipping." You can enroll in the European Fulfillment Network for shipping between the United Kingdom and the EU.
With the resumption of the United Kingdom's inclusion, Amazon offers you two advantages:
- You can use your EU inventory for UK orders, allowing orders from the UK to be fulfilled from your inventory in the EU.
- Conversely, you can also fulfill orders from European customers using your UK inventory.
In Seller Central, you have the flexibility to determine individually whether UK inventory should be used for orders to any of the listed countries. To configure this, once again, go to "Settings," then "Fulfillment by Amazon," and select "Settings for Cross-Border Fulfilment Settings."
Scroll down the page for further options.
You can find additional information about the European Fulfillment Network for the United Kingdom and the EU on the Amazon Help page.
Conclusion
In conclusion, the European Fulfillment Network (EFN) provides a great opportunity for young and small businesses to enter the market. Amazon Sellers benefit from Amazon's logistics network, tax advantages, and the ability to deliver to all European marketplaces. However, if your monthly order quantity exceeds 1,000 units, consider the Amazon FBA programs "Central Europe Program" and "Pan EU." With these programs, not only do the penalty payments of 0.25 euros per shipment disappear, but your customers also benefit from shorter delivery times and lower shipping costs.
