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Handling FBA Errors in the Fashion Industry

Tue, 19 Oct 2021 09:17:16 GMT

If one thing’s for sure, it’s this: the fashion industry has never been more digital than it is today. It doesn’t really come as a surprise if you think about it. The digital transformation – after affecting the “usual suspects” like financial services and media – has now been spilling over to sectors that offer physical products, such as retail and fashion. The question is: in what form is this happening and how can you and your online business make the most out of this momentum?

The first question is answered easily: The digitization of the fashion industry has led to more people shopping for clothes online than ever before. What started out as a necessity for some people, because all the brick and mortar stores closed due to the pandemic, has now become regularity.

As an Amazon seller, you constantly profit from this. Not only are you selling over the world’s largest platform and are therefore able to reach a ridiculous amount of potential customers, you are also able to benefit from all the processes and amenities the online giant offers its sellers. Selling over Amazon FBA being one of those.

What is Amazon FBA?

FBA stands for “Fulfillment by Amazon” and is basically an in-house fulfillment service for sellers. This means that you can book this service and Amazon will take over your logistics for you. The service includes

warehousing of goods,
compilation of orders,
redistribution to another warehouse due to specific order demand,
shipping,
customer service in respective languages,
as well as refund and return management.

All you have to do is send your products to an Amazon Fulfillment Center, and the online giant will take over from there.

Benefits of Selling Over Amazon FBA

There are several reasons why this business model is so popular. These are the most convincing ones.

You Have Less Things to Worry About

For one, Amazon sellers have a lot on their plates and are happy about tasks they can delegate into competent hands. This is the exact case here – who could be more qualified for the Amazon fulfillment process than the online giant themselves? Apart from the fulfillment process, the online company also takes over storage and customer service for you.

Amazon FBA will save you a lot of time. Time that you can now spend on other things, like working on your listing, researching new products … Or, you know, napping.

You Improve Your Seller Rating and Sales

As we mentioned, the online company takes over delivery and customer service for you. On-time delivery and pristine customer service are factors that make you more attractive as a seller and are also reflected in your Amazon seller rating. If you sell over FBA, Amazon naturally gives your company the best rating for these two services, since they are the ones executing them. A great seller rating will also convince buyers that are on the fence about whether to buy from you or somebody else.

Drawbacks of Selling over Amazon FBA

We are not going to pretend that there are no negative sides to Amazon FBA. Here is what you have to take into consideration:

Amazon FBA Fees

Naturally, Amazon will charge you for their services. Whether this service is worth it for your business is a question you will have to decide for yourself. Click here to find out more about Amazon FBA fees .

Amazon FBA Errors

Like in every other sector, you have to take into account the margin for human error that is bound to happen in an Amazon warehouse. There are three main errors that occur regularly:

#1: The Item Gets Damaged and Is Unsellable

Items get damaged, that’s a fact. If the damage is so severe that the product can no longer be sold and Amazon disposes of the item. It is written off.

With all the hustle and bustle going on in the Amazon warehouses, it can happen that products are incorrectly disposed of. Here too, the item is written off and is no longer recorded in the Amazon FBA inventory. Naturally, claiming a reimbursement becomes more difficult if there is no record of the item in the inventory.

#2: An Item Is not Returned but the Customer Has Already Been Refunded

Sometimes buyers process a return of an item and the money is refunded to them before the product has even been returned. Amazon then proceeds to wait 45 days for the return. And after that … nothing happens.

Naturally, the seller should be reimbursed. However, this doesn’t happen as often as you might think. After an FBA error, the sellers often carry the loss on their own. Either because they didn’t bother to file the claim or because they didn’t identify the error altogether.

#3: FBA Fee Calculation Errors

Both the storage fees and the shipping fees for the FBA service are calculated based on the dimensions and weight of the stored items. If Amazon now uses incorrect dimensions as a basis for calculation, excessive FBA fees will be charged.

Depending on the number of items, sellers can lose several thousand euros a year.

Amazon FBA Errors in the Fashion Industry

Fashion is big on Amazon. Not only has the online giant become the number one online apparel retailer in the U.S , but they are also constantly working on ways to keep this sector on its toes. Whether they are nudging the super high-end fashion companies to sell over their new platform “luxury store”, or launching campaigns aimed to change the way you buy t-shirts online, Amazon is always looking for ways to stay one step ahead.

You can do the same for your online business on Amazon. The truth is, it is not unlikely that many of the errors we mentioned further above are bound to happen, especially when you sell fashion items on Amazon.

The reason for this is that fashion items are returned very often. In fact, return rates for the categories fashion and fine jewelry are known to shoot up to 40% . A high return rate naturally means that you can easily lose track of all the merchandise going in and out of the Amazon warehouses. The more SKUs you have, the harder it becomes to keep track. The higher the chance that errors occur and you lose money.

What can you do in such a case? Once you have identified the error, you can file a claim for reimbursement. We would love to tell you that this process is easy and not time-consuming at all, but that is simply not the case.

Not only do you have to provide evidence of your losses, you also have to compare up to twelve different reports that have to be analyzed and linked to the transactions in question. Now take into account the amount of time until the FBA error is located, the specifications of the respective marketplace, different time zones, etc. All in all, the whole process tends to become more than confusing.

SellerLogic’s Lost & Found Solution

As you can imagine, making reimbursement claims is no fun and takes up a lot of time. That’s why we have developed a solution that automates this process in all the right places.

SellerLogic Lost & Found analyzes the data from the abovementioned up to twelve reports and identifies the FBA errors in them automatically. Each conspicuous transaction is created as a separate process. This can be done up to 18 months retroactively. The individual cases are prepared in a way that is easy to understand and stored as a copyable template. All you have to do is open the case in Seller Central, insert the text prepared by SellerLogic, and click “send”.

Our solution sees to it that your reimbursement claims are taken care of – and all you have to invest in is a minimal amount of effort. If there are any difficulties with one of your cases, our knowledgeable team can assist you in communicating with Amazon!

Final Thoughts

The fashion industry on Amazon has been gaining momentum rapidly since 2019 and it certainly doesn’t look like there is going to be a huge decline any time soon. At the end of the day, it’s a question of comfort. And, let’s face it, no company offers their customers more comfort than Amazon when it comes to shopping experiences.

All you have to do is be ready to satisfy that demand as a seller and have precautions in place for all the things that can go sideways in a fluctuating sector such as fashion. Luckily, there are many tools nowadays that can help you take care of tedious processes and enable you to focus on what’s important.

About SellerLogic: Our mission at SellerLogic is the development of new and intelligent solutions for Amazon Sellers. Our current products – the SellerLogic Repricer and Lost & Found – allow our customers to save time and increase productivity while generating maximum profit.

Our logos are on this page: https://www.sellerlogic.com/de/media-kit/

About the Author: After finishing his legal studies, Daniel started out as a copywriter in the field of competition law. The experience he drew from working so closely with marketing moved him to shift his career into a more creative direction, and he now specializes in content creation for software companies. When Daniel's not trying to figure out various SEO algorithms, you can find him working on his jump shot or on a new sushi recipe.

The most common mistakes sellers make when expanding to international marketplaces

Thu, 14 Oct 2021 14:56:38 GMT

INTRODUCTION:

Amazon is growing fast – and so do sellers’ interests in expanding to new markets. With the additions of Amazon Sweden, Amazon Netherlands and, most recently, Amazon Poland, the eCommerce giant now counts 18 marketplaces worldwide. This allows Amazon products to reach over 300 million active site users across the globe who turn to the online retailer to fulfill their shopping needs.

However, the real challenge of reaching Amazon consumers does not lie in ironing out the often minute bureaucratic details of signing up for a new global marketplace, but rather in preparing the appropriate Amazon listings that will speak to them, quite literally, in their own language.

Herein, then, come the pitfalls new and seasoned sellers alike fall into: not taking into account the intricacies of each marketplace and, of course, the seller-to-customer communication barrier that crosses borders and cultures.

In this article, we’re going to examine the most common mistakes sellers make when deciding to foray into new marketplaces and see how easy it is to avoid them by tapping into the power of translation services and marketplace-specific Amazon SEO.

Using automatic translation

Presentation is critical when it comes to product marketing, and that extends beyond snapping perfect pictures or preparing the most eye-catching infographics. Each Amazon product listing features dedicated sections where sellers are allowed to showcase product features and benefits, which, if conveyed in a way that resonates with those browsing the listing, can lead to conversions.

Nevertheless, if the language used in said listings is poorly translated, then the feeling conveyed to those browsing it is one of confusion. You can see why, then, language translation plays a crucial role in succeeding in international marketplaces. Suffice to say that using Google Translate, Amazon’s auto-translate feature, or anything other than professional translations services will not help you win customers – quite the contrary!

That’s why it’s imperative that you hire a translation company that employs a professional translator team that’s ready to do the work for you – the right way. It’s a small investment in the grand scheme of things, but it does, however, pay off in great dividends.

2. Not establishing a connection with customers

Going beyond employing professional translation services, your translation agency of choice should understand the nuances of each market and how customers respond to the way your products are presented in their listings.

Cultural and geographical differences influence purchase decisions and should be an important consideration when crafting an attractive listing yet in tune with what works best and helps draw in Amazon users in a way that feels authentic and relevant.

For example, listing performance data shows that those shopping on Amazon US respond best to listings that use more sales-friendly, lighthearted copy. On the other hand, customers on Amazon DE find all flowery language redundant and feel that it takes away from what they seek to find out about the product at hand, which is its features and uses. So, for this market, it is imperative that listings use language that is clear and concise and further helps avoid customer dissatisfaction by unknowingly overpromising or giving the wrong impression regarding the product’s capabilities.

3.Failure to conduct marketplace-specific SEO

Do customers search for products using the same keywords on, say, Amazon US and Amazon ES? Well, while some may think so, reality proves otherwise, and for a reason. First off, literal keyword translations often don’t correspond to anything of substance in the language of translation. Second of all, it’s understandable that people in different countries, and at times within different regions of the same country, will look up for things in different ways.

For example, within the United States, customers looking for women’s bag can search for “bags for women” or “bolsas para mujeres”. While the latter keyword may seem out of place, it does, however, make sense given the large Spanish-speaking population in great parts of the United States. Without proper keyword research, though, you’re bound to lose out on sourcing the right keywords for your Amazon listing optimization, and, as such, do a poor job on making the most out of your Amazon product page.

4. Skipping measurement conversions & packaging translation

It’s simple: customers want to know what they’re getting without having to whip out a calculator or open another browser tab to do unit conversions. European Countries, the United Kingdom, and Canada use the metric system, while the United States uses the imperial system.

This essentially means that all measurements, including height, breadth, width, weight and temperatures need to correspond to the units used in the respective countries serviced by each marketplace.

However, product specification adjustment also includes packaging. Customers receiving their purchases will not be pleased if they can’t read what’s said on the packaging in their own language.

Given how prevalent the issue of skipping this step became, Amazon has actually implemented a policy where all measurements and packaging now needs to be translated to cater to the consumers of each marketplace a product is sold. You need to be sure that your language translation services cover this aspect of your product list process so that you don’t run into trouble in the long run.

5.Using translators that don’t have Amazon expertise

It’s one thing to be a professional translator, but it’s another to know what it takes to offer a full Amazon listing optimization service. Amazon, and each of its marketplaces, present many intricacies that need to be accounted for. Each translator well-versed in the Amazon ecosystem has a running “Amazon list” of things they take care of when optimizing a listing or creating it from scratch.

For this reason, going by way of using an agency that can offer both translation services and a dedicated Amazon SEO service can save you a lot of time, effort, and headaches that come with trying to piece each piece of the “Amazon selling puzzle” alone. Trusting in the expertise of people who have helped thousands of sellers in the Amazon journey can not only provide you with a sense of peace but also allow you to profit significantly by starting on the right foot, with a listing that’s optimized and ready to convert.

What is Happening on Amazon Australia

Thu, 14 Oct 2021 14:56:38 GMT

We started with Costco and there was Netflix. Now, the world’s largest eCommerce platform has hit the land of down under, our beloved Australia. It has now been more than 4 years since Amazon launched its retail offering in Australia. Over this period, we have seen countless 'dramatic' headlines about its launch and effect on the Australian retail industry.

When Amazon "set up shop" in Australia, there was a lot of excitement, a lot of hopes, and a lot of fear. Then what? There's a little hissing going on. Some (premature) applause - but mostly there was a lot of silence. But hey, don’t assume defeat just because things are quiet down under. Amazon Australia had a sluggish year when it first launched in 2017. However, establishing operations in a new country takes time, luckily Amazon is here for the long haul.

More product ranges, brands, Prime and more are now available on Amazon Australia. As a result of all these changes, Amazon can now absorb a greater portion of Australia's e-commerce retailing. More importantly, let us not forget how Amazon has the challenge of dethroning its biggest rival in Australia, eBay. With a revenue of $292.3 million, the eCommerce platform increased its revenue in Australia by 1,500 per cent from 2017 to 2019.

So now we can all agree that despite its lacklustre start, Amazon is on track to dominate Australia's retail market.

Let’s take a look at Amazon Australia milestones down below and explore how they are tracking now and into the future.

Amazon Australia Has Faced Many Obstacles Along the Way

Amazon Australia had an incredibly soft launch on November 23 in 2017. The launch had Australians wondering if they would see Amazon up and running before Christmas.

But finally! Amazon officially launched in Australia in December that year. Amazon's website instantly transitioned from a Kindle store presence to a fully-fledged Amazon.com.au, with millions of items ready for eager Christmas shoppers across more than 20 categories.

Amazon have come far since their first day in the land of down under. For all intents and purposes, the Australian version Amazon is identical to the multinational retailer's other regional offerings. It has the same look and feel as other Amazon websites, but with an emphasis on the Australian market – and prices in Australian dollars to match. It has all the standard Amazon products, as well as the marketplace offering, which allows third-party vendors to list and sell their products.

However, when Amazon was initially launched in Australia there were a few key features that were different:

There was no Amazon Prime - despite the availability of Prime video and music streaming platforms, there were no Prime delivery methods.

Only a few selling features were available - unlike Amazon.com or other regional versions, the selling features were sparse – aside from the bare bones stuff.

Limited product listings – In contrast to other Amazon sites, Amazon.com.au had a small number of listings. The platform wasn’t selling many items either, with third-party listings accounting for 90% of existing listings.

The primary explanation for these initial distinctions is that Australia was basically a brand-new Amazon marketplace and an unusual one.

Between 2017 to 2019, although online purchases were common, when it comes to eCommerce, Australia was a bit of an anomaly. Despite the fact that it has the world's 12th largest economy, at the time online transactions accounted for just 10% of total retail sales . E-commerce was not as common in Australia as it is in the rest of the world – at least not yet.

According to a study by Power Retail, while the awareness of Amazon is high, only 6% of Australia’s online shoppers were actively engaged with the platform. More than half of Australian shoppers did not consider Amazon to be the cheapest option. This is why they were more likely to browse for products and purchase from their favourite brick and mortar stores or existing online retailers than they were to be searching and purchasing from Amazon.com.au.

Another reason why Amazon – and eCommerce, in general, had a rough start in Australia is the geography. The island is vast – it is the size of the continental United States – but there are vast, remote areas, with little inland infrastructure. When it comes to the population Australia is the world's most dispersed, making delivery and scheduling difficult. Expectations of two or three weeks are common, so eCommerce is not as quick and easy as it is in other countries.

Then there was Amazon’s new rule to prevent Australians from making purchases off the US store – or any other Amazon markets - which didn't help as the delivery timelines were LONG. This decision by Amazon was in fact what slowed their pace, consumer confidence and adoption.

Amazon Australia Is Still Finding Its Way

Despite the challenges, Amazon Australia is now poised to become the company's fastest-growing marketplace. Amazon has worked hard to earn the trust of its Australian customers and to provide the care they require and now the Aussies are starting to feel “The Amazon (Australia) Effect”.

In just a year, Amazon Australia grew from nothing to a marketplace with 10,000 Australian sellers, 100,000,000 products, and nearly 90% of Australians receiving free two-day delivery on local products as soon as they sign up for Prime.

Source: Marketplace Pulse

By the end of 2018, consumer awareness of Amazon (vs pre-launch in Australia) had risen from 48% to 73%. Between 2017 and 2018, the number of customers who are likely to buy from Amazon tripled. In addition, Amazon's online traffic increased by 42 per cent after the launch... and it's still growing until now.

According to the company, its first "Prime Day" subscriber sales event on July 16 and 17 resulted in the two highest days of sales and traffic since its launch.The Amazon Australia timeline reveals key steps the marketplace took to infiltrate Australian culture, with the launch Amazon Prime, Amazon Advertising and Amazon FBA being a significant step. Their subscription delivery and TV streaming service are half the price of their American counterpart. The service advertised free two-day shipping, unlimited eBook access, and other benefits.

The existence of Amazon Prime and FBA in Australia creates a powerful contrast when it comes to customers comparing the experience of buying products from the Amazon vs other Australian marketplaces. Those who purchased from other online retailers were likely to receive their items within 1-2 weeks, whilst those who purchased from Amazon sellers receive theirs within 2 days. Some shoppers are starting to notice the impact of Amazon and FBA, which is why FBA usage, Prime membership and total platform growth go hand in hand in Australia.

Following the availability of Prime membership and FBA, the global retail giant has also expanded their Australian operations by opening new fulfilment centres, logistic sites, and parcel pick-up locations / HUB all across the country. Plus, they are nearly completing their first Amazon Robotics fulfilment centre in Sydney . Spanning 200,000 square metres, the new fulfilment centre will create more than 1,500 local jobs working alongside advanced robotics.

That is quite an achievement!

Source: Marketplace Pulse

Amazon.com.au Vs Other online players in Australia

In Australia, nearly all online marketplaces are booming, giving brands and sellers more ways to attract customers. When it comes to competition, however, research by Web Retailer shows that up to this year, Australia is one of a handful of countries where Amazon does not dominate eCommerce. eBay remains Amazon Australia’s biggest competitor.

Source: Web Retailer

This table shows the most popular sites used by shoppers in the Australasia region (Australia and New Zealand) in 2020. By far the most popular online marketplace in Australia is eBay. Amazon is comfortably positioned in second place.

This is the one place where eBay's traffic exceeds Amazon's – eBay gets more than twice as much traffic from Australasian customers as Amazon. A more recent report by Similar Web also shows that from February to April 2021, eBay still beats Amazon and remains the number one marketplace in Australia with the highest monthly visits.

Source: SimilarWeb

eBay's image as an online auction house, a place to find one-of-a-kind pieces or used goods, is still prevalent. In order to maintain its position as the top Australian shopping site eBay is trying to shed it’s ‘Auction’ image but still remains as a common perception. Amazon, on the other hand, is only known for stocking new goods from major brands at reasonable prices and providing a value proposition of "great selection, delivered quickly" (along with price and convenience) has raised the bar for Australian marketplaces.

The looming launch of Amazon in 2017 sent shivers across the Australian industry . Major Australian retailers Myer, Harvey Norman, and JB Hi-Fi are down 47%, 25%, and 22%, respectively, from their peak share prices in 2016. That is not all Amazon's doing, but it shows the fear of how the eCommerce giant can change a market sentiment.

By contract since Amazon’s Australian launch in 2017, Amazon.com.au has experienced rapid domestically unrivalled growth. Its monthly visits have risen to 25.8 million (41 per cent of eBay's) in just three years and are expected to continue to rise. Australians, like shoppers in other countries, prefer a quicker and more convenient shopping experience, and Amazon excels in this.

This shows that Amazon’s commitment to Australia should not be underestimated. With the launch of FBA, Prime subscription and other strategies adopted by Amazon, the 'Amazonification' of customer perceptions will undoubtedly continue to spread across the country.

Amazon Australia during the COVID-19 Pandemic

Even as cloud growth slowed due to the coronavirus crisis, eCommerce was the highlight of Amazon's second-quarter financials, propelling the tech giant to new heights.

In Australia, sales of goods on the Amazon e-commerce website brought in $511 million, more than double the previous year's $218 million. The sales of Amazon's third-party retailers, also known as its marketplace arm, increased to $126 million.

In a new report from Pattern , Australian online shoppers are turning to Amazon more than ever, driven by the lockdown. The percentage of online customers who report they have shopped on Amazon.com.au has risen more than 50% between 2019 and 2020 and mostly admitted that pandemic-induced lockdowns are the main reason why these purchases were made from the marketplace.

Web traffic data from Similar Web also shows that the monthly visits to Amazon.com.au have risen by 49.5% between February and July this year.

According to the Pattern study, 27% of Amazon customers said the marketplace has aided them during times of lockdown. While it is true that 31% of customers said that they were shopping less because of the pandemic, 53% admitted they were spending more online than ever before. Overall, 65% said they would buy more online in 2020, with the study indicating that even without the lockdown, online purchases would have increased this year. The pandemic, on the other hand, has exacerbated an emerging trend.

During a press release in 2020, Matt Furlong discussed Amazon Australia Consumer Trends Report. He said that 2020 has radically altered all facets of Australians' daily lives, including how we shop, socialize and turn our homes into workplaces, gyms, cinemas and more. The findings of Amazon Australia's 2020 Consumer Trends study shed light on some of the latest hobbies that Australians are taking up, such as baking and arts and crafts, as well as their renewed emphasis on health and wellness all of which have related products that can be bought from Amazon.com.au.

What’s the future of Amazon Australia?

Will this increase sales trend be temporary for Amazon?

The answer is no.

When Amazon Australia was first introduced to the Australian market two years ago, it had a rocky start. Despite the hype, the user experience did not translate as easily as it should have once the platform was launched.

However, Amazon Australia has risen to the occasion and introduced several strategies that have seen it become the company's fastest-growing marketplace. Amazon is unquestionably on the way to becoming a global success, just as it has been in other countries.

Sure, the upward trend of Aussie shoppers purchasing from Amazon has been accelerated by lockdowns. But based on surveys after surveys, this change is not temporary.

Even with stores open again, buyers’ behaviour has been altered for the longer term. The eCommerce marketplace has helped customers during the period of lockdown. Amazon Australia has benefited from the closure of physical stores, impressing customers with its expanding product range, availability, and distribution capability through the lockdown.

Within ten years, Amazon's massive investment in the Australian retail market could see the American juggernaut claim nearly a third of all online sales or more.

Sellers or brands that have never considered Amazon Australia as a route to market should recognise it can offer incremental revenue and brands that have considered it in the past year should reconsider. Whereas for existing Australian marketplaces, they will need to bring their A-game, from digital marketing and brand placement to digital innovation and investing in a comprehensive omnichannel experience, there is a lot to think about.

To compete with Amazon, they will need to be continually developing a compelling value proposition.

More importantly, ‘If you can’t beat them, join them’. Sellers or brands should use Amazon Australia as a marketing and distribution platform for their products. If you are ready to start selling on Amazon or would simply like to learn more about Amazon here in Australia, get in touch with our Amazon experts and schedule an appointment. We at MerchantSpring will be happy to help you with the right tools and services to be a successful seller on Amazon Australia.

OSS and IOSS: What Has Changed for Amazon Sellers?

Thu, 14 Oct 2021 14:56:38 GMT

On July 1, 2021, the EU’s new VAT reform came into effect. The new rules for online sellers are supposed to simplify VAT filings for distance selling within the EU, but also for import VAT due on products from outside of the EU. The VAT reform does not only affect sellers

with their own online shop, but also sellers who use third party platforms like Amazon or eBay can be affected. In this article, we will tell you all you need to know about the new VAT reform.

What is OSS?

The acronym OSS is short for One Stop Shop. The idea behind OSS is to have “one stop” only where you pay VAT instead of having to register for VAT in each EU country where you sell goods. The concept behind OSS is not entirely new. In fact, OSS is an extension of MOSS, the Mini One Stop Shop. MOSS was introduced in 2015 and encompassed EU-wide telecommunications, broadcasting and electronic (TBE)

services.

With OSS, the concept is now expanded to include B2C eCommerce sellers based in EU countries. The new One Stop Shop is not just reforming how online sellers can register and file for VAT though. It also includes the IOSS, the Import One Stop Shop concerned with import VAT registration and filings as well as new, harmonized distance selling thresholds. Let us focus on each of these aspects one after the other.

Simplifying VAT with OSS - How does that work?

Before OSS, you had to register and file for VAT in each European country that your customers were based in. Now, you are able to register in one country only and do your VAT filings all in one. However, there is one exception to this rule. You will still have to register for VAT in EU countries where you store your goods.

Also, the OSS only applies to B2C transactions. For you as an Amazon seller it is important to note that if you store and sell goods through Amazon FBA, this also counts as storing goods in a country, even if it is Amazon who stores them on your behalf.

A new distance selling threshold

Along with OSS, a new EU-wide distance selling threshold is introduced. Instead of having different thresholds for each country to be monitored, there will now only be one threshold. The EU-wide VAT selling threshold is set at 10,000 € per year.

This offers both advantages and disadvantages. On one hand, you do not have to monitor several thresholds for all the countries you sell to, on the other hand, it has now become easier to cross that threshold.

Import One Stop Shop and the end of low-value VAT exemption

The Import One Stop Shop (IOSS) aims to simplify import VAT registrations and filings. Similar to OSS though, it comes with a significant change for when import VAT is due. Up until now, items valued at or below 22€ were VAT exempt. Under the new regulations, sellers can collect, declare and pay import VAT for all items valued between 0 and 150€. But the import VAT exemption for goods valued between 0 and 22€ has been abolished with the introduction of IOSS.

Sellers who profited from being able to offer these items cheaper from outside of the EU due to the VAT exemption will not be able to use that competitive advantage anymore. As an eCommerce seller based in the EU, or with a local representative for your business registered in the EU, you can request a VAT number for all IOSS transactions from your

local tax office.

Do I have to use OSS and IOSS?

While the new thresholds as well as the abolishment of the import VAT exemptions apply to every B2C distance online seller in the EU, the use of OSS and IOSS is not obligatory at this point. Therefore, it is up to you whether you want to register for OSS and IOSS or not.

If an online seller opts out of IOSS, import VAT will be collected directly from the customer upon delivery by the shipping company.

As an Amazon seller, it is also possible that Amazon takes care of the IOSS for you and collects and declares import VAT on your behalf. Amazon can provide an IOSS number for you that you can then use on your documents.

VAT made easy with VAT automation

With all these changes to implement into your business routine, right now might be the perfect time to automate your VAT registrations and filings. Tools like hellotax monitor thresholds for you and keep track of deadlines. They calculate the correct VAT percentage for different countries and can be used to reclaim import VAT when applicable. No matter if you want to use OSS and IOSS or not, you can

greatly reduce the paperwork and effort and focus completely on your business.

Conclusion

The EU VAT reform brings about several changes for online sellers. Even if some components of it are optional, others are not and have the potential to change the competitive landscape. While platforms like Amazon can take on some of the responsibilities for you, it is still important that you evaluate your individual situation to find the best solution for your online business.