Changes to Amazon’s border policy will come into force on January 1, 2021. Their impact will begin to be felt in a few weeks in mid-November. You should consider how this will affect buyers and sellers through the Amazon platform?

Surely the last 12 months have been difficult for Amazon third party sellers. At the beginning of the year, due to Covid-19, Amazon decided to sell its own inventory. It therefore limited sales to its external e-commerce sellers.

Now we are at a stage where Brexit is rapidly approaching. Amazon has already announced major changes to how shipments work when they cross the UK-EU border. This is a source of considerable concern for sellers. Especially those who depend on Fulfillment By Amazon (FBA) for order fulfillment across Europe.

What will change then?

Changes in Amazon’s border policy mean that all pan-European transfers of FBA stocks between the UK and the EU will be halted from January 1, 2021. This will apply to cross-border FBA procurement through the Amazon European Logistics Network. Amazon has no information on the nature and value of the goods moving between the UK and mainland Europe through its network. Therefore, he decided that he would not be able to move the products and established a customs border on behalf of his merchants.

For retailers, this means they will have to maintain separate FBA lists on both sides of the border. This will entail a lot of additional bureaucracy – from collecting VAT numbers for individual countries. The system codes for the provision of customs clearance documents will also have to be harmonized.

Amazon’s decision will not be easy. This marks the end of the highly European-oriented order fulfillment model that the company has been using for many years.

Moreover, it shows that even the largest and most powerful companies in the world are not always able to find the best solutions to complex trading problems. Many sellers simply expected Amazon to “find a way.” Instead, from January 1, the fulfillment industry will operate on a level playing field, and e-commerce companies will need to think carefully about whether the Amazon-based fulfillment model still makes sense to them.

Small retailers may have particular problems.

Certainly, these changes can be especially painful for small retailers who are not properly prepared for the changes to come. Unlike their larger rivals, these companies may have little expertise in handling the additional systems, processes, controls and tariffs required for shipping to other parts of the world or managing multiple national VAT requirements.

They may also not have sufficient inventory – or the ability to forecast them – to make informed decisions about where to allocate inventory and where to store it. They will also have to spend more to store these supplies in multiple locations. That is why it is so important at the moment to track information on Amazon. Small suppliers in particular need to check what will be most profitable for them. How will they store their goods, in what quantities and where? Or maybe a better solution would be to use external service providers than FBA, whose execution prices are becoming more and more expensive?