Amazon EFN vs Pan-EU Program
Want to expand your Amazon business across European markets and not sure which solution is better for you? If so, you may wonder which program to choose — Amazon's European Fulfillment Network or Pan-European FBA. Both options offer unique benefits and drawbacks that are important to consider before making a decision.
In this post, we will explore the differences between EFN and Pan-European FBA and provide insights to help you determine which program fits your business best. Whether you're just starting out or already have a successful Amazon business, read on to learn more about these two programs and how they can help you reach new customers in Europe.
EFN and Pan-EU — Key Difference
The Amazon European Fulfillment Network (EFN) and the Pan-European FBA (Pan-EU FBA) programs are both designed to help Amazon sellers reach customers in Europe by storing and shipping their products locally. However, there are some critical differences between the two programs.
The EFN empowers sellers already registered for FBA to store their inventory in one of Amazon's local fulfillment centers in Europe. That allows sellers to efficiently fulfill orders from all of Amazon's EU marketplaces using a single inventory pool. FBA inventory can be listed across all EU Amazon stores with just one account, and orders can be fulfilled using the European Fulfilment Network.
Using Amazon Pan-EU, you can store and distribute your products across Europe by leveraging Amazon's fulfillment centers in the countries you have chosen for storage. By availing of Pan-EU, sellers can easily send their inventory to a nearby fulfillment center and sell their products directly from there. Amazon handles the logistics and dispatches orders to customers from the closest fulfillment center where the product is stored. Typically, the order arrives at the customer's doorstep the next day. This arrangement ensures that customers receive their products faster while also reducing fulfillment costs for sellers due to proximity to customers.
Amazon's EFN and Pan-EU differ in their approach. EFN involves holding all your goods in one country, from where they are picked, packed, and shipped to the destination once an order is placed. In contrast, Pan-European FBA requires you to send your goods to your home marketplace, following which Amazon uses its intelligent distribution system to store your inventory in various fulfillment centers across Europe. Utilizing this service automatically stores your goods in different European fulfillment centers under Amazon's management.
Related: What Is Amazon FNSKU?
Pros and Cons of Amazon EFN vs. Pan-EU
Generally, EFN is very easy to set up, but the fees are more expensive. With Pan-EU FBA, you must meet local requirements for each country where you sell, including VAT registration, reporting, and collection, but the fulfillment fees will be cheaper.
- Increased reach: EFN can be a valuable tool for reaching new customers and increasing your emerging brand's visibility while minimizing administrative workload;
- Easier VAT setup: You can sell your products in Europe without being VAT registered in each destination country unless you surpass the sales threshold;
- One-stop shop EU fulfillment: You can effortlessly manage EU distribution by sending your stock to a local Amazon fulfillment center. This setup is simple to establish within Seller Central, and there are no additional registration or startup costs. Simply include your listings on the appropriate Amazon European marketplace where you want to sell.
- Higher fees: Compared to Pan-EU, the European Fulfilment Network has higher fulfillment costs in Europe if cross-border fees are involved;
- Extended delivery time: EFN may mean slower delivery times for EU customers because the inventory is not stored in the closest fulfillment center.
Pros and Cons of Amazon Pan-EU vs. EFN
- Fast delivery: Pan-European Fulfilment offers fast delivery to all enabled storage countries, typically next-day delivery because inventory is stored in the nearby fulfillment center;
- Simplified logistics: Pan-EU provides hassle-free handling by local Amazon fulfillment centers;
- Lower fees: You can offer your customers more competitive product pricing than EFN due to lower local fulfillment fees charged by Amazon (you can save up to 53% in fulfillment fees, according to Amazon).
- Complex setup: With Pan-EU, you must ensure to comply with all regulations in each country. That involves a more intricate setup process and the need for sellers to be VAT registered in each country where their goods are stored;
- Tax implications: VAT-registered sellers must provide regular tax reporting (monthly or quarterly), which means additional deadlines, paperwork, reports, and tax returns.
Amazon EFN vs. Pan-EU: Summary
The choice between EFN and Pan-EU will depend on your business needs, inventory, and budget. If you have a smaller inventory and want a simple solution, EFN might be a better option. However, Pan-EU may be a better choice if you have a more extensive inventory and want to offer faster delivery times. Below you can find a comparative summary of Amazon EFN and Pan-EU.
EFN or Pan-EU — Which Is Better for Your Business?
The decision to choose between EFN or Pan-EU largely depends on your business's specific needs and goals. When choosing between EFN and Pan-EU, businesses should consider factors such as their sales volume, shipping costs, and the markets they wish to target.
When is Pan-EU better?
Pan-EU may be a better fit for your business if you are a large-scale supplier who wants to save on fulfillment fees and offer customers the benefits of faster delivery times to gain a competitive advantage. Amazon Pan-European FBA is ideal for high-volume sellers who ship at least 1,500 units each month. Opting for this solution can maximize your revenue, sales, and earnings. If you aim to widen your market reach and streamline your logistics, Pan-European FBA can significantly benefit your business. With Pan-EU, businesses can reach more customers and potentially increase sales by taking advantage of Amazon's advanced logistics network.
When is EFN better?
With EFN, sellers can use Amazon's European network of fulfillment centers to store and ship their products hassle-free and focus on sales. It can be an effective option for businesses with lower sales volumes who want to start selling in Europe.
Tip. Amazon Pan-EU and EFN calculator is a helpful tool to estimate whether EFN or Pan-EU is more profitable for your business. Sellers can use the EFN calculator to estimate their costs and determine which countries they want to ship to. Seller Assistant App’s Amazon Pan-EU and EFN calculator helps sellers account for the cost of using Amazon's fulfillment. The calculator takes into account various factors, such as fulfillment fees and VAT, and provides an estimate of the total cost of selling a product in different European marketplaces. That can help sellers make informed decisions about expanding their business to new markets and optimize their pricing strategy for maximum profit.
Amazon's European Fulfillment Network and Pan-European FBA are two fulfillment options for Amazon sellers who want to sell in multiple European marketplaces. Both are great options for sellers who wish to scale their business selling in Europe. However, you must consider their upsides and downsides when selecting the best fit. Ultimately, it's essential to weigh the costs and benefits of each fulfillment option and choose the one that best aligns with your business's specific needs and goals.
Amazon EFN and Pan-EU are great for cross-European sales. However, researching profitable products is equally essential to ensure your business growth. Seller Assistant Аpp will effectively and reliably help you with this task. This all-in-one extension incorporates all features vital for product research. Seller Assistant App shows your product’s profit, margin, and ROI. It also helps you immediately see if a product has any sales restrictions or has previously triggered problems with account health. It combines an FBM&FBA profit calculator, Quick View, Stock Checker, and Restrictions Checker in one tool.