Expansion Into Europe: Why & How You Should Do It [4 Reasons]

This article is a guest post from our friends at hellotax.

Thinking about growing your business in 2022?

Then expansion into the European Union is the way to go! There is no better time to introduce your brand and product spectrum to a whole new variety of customers.

Between the increasing competition in North America and the continually growing economies in Europe, 2022 is the perfect time to open up new markets and start selling to European customers.

We show you the top 4 reasons why you should start expanding now and explain how you can start selling in several countries at the same time.

Reason 1: New Customer Base

The European Union and the United Kingdom combined boast millions of potential new customers.

But more importantly, the customer bases in different European countries are diverse even though they are geographically close.

What does this mean for expanding US sellers?

This new pool of consumers not only follows different sales periods and celebrates other holidays than US customers, but they also follow different sales periods than each other – allowing you to expand your business by doubling or even tripling your peak sales numbers year-round. 

Additionally, due to the close proximity of European countries to each other, it is common for Europeans to order from foreign marketplaces.

These advantages can be most profitably reaped by selling via Amazon, as you can tap into several new markets encompassing a whole continent just by selling from one European country thanks to Amazon’s extensive fulfilment network.

Reason 2: Less Competition

In addition to a large customer base, the European market also offers, at least to some extent, a less competitive environment.

The potential customer base in each singular country is smaller which means that each market also has fewer active sellers. 

The import, export, and tax calculations for goods sold to customers in different European countries were until recently a complicated and time-consuming process, which led to many European companies only being active in one or a few countries.

This has recently changed.

In summer 2021 several regulations were changed and implemented that unify VAT compliance across the EU.

While the new system makes the overview of VAT duties simpler, it still does not completely simplify them.

Sellers active in Europe still need to register for VAT and regularly turn in VAT returns in the national languages if they store products in Europe.

In case they only store in a single country and sell from there to a multitude of EU countries, they will benefit from the new One-Stop-Shop system, which replaces most VAT registrations and returns.

However, the compilation of OSS reports is a tedious process. This is where hellotax comes in.

The VAT service provider specialised in E-Commerce and Amazon selling can register for VAT or OSS in Europe, automates the compilation of returns and reports, and files them for you in a multitude of countries.

This way, you can concentrate on your business and take full advantage of the competitive environment.

Several niches in different countries in Europe are still left to conquer. This situation differs from the competitive one in the US, where sellers of all sizes and fields are active across the whole continent.

Additionally, products that might be common to buy or easily accessible items in the US are hard to find in Europe.

Many buyers are specifically searching for American brand items or American products are, even after browsing sites like Amazon, still left wanting.

Whether you want to import goods from the US, buy and resell in Europe, or ship items from even further away – there is a demand for your products and now is the time to expand.

Reason 3: Market Growth & Investment

Thinking these are just fairytales? Think again! The online shopping market in Europe is currently experiencing a great growth spurt – for several reasons.

Americans are used to online shopping. Due to the dot-com bubble originating in the US, comparatively lacking infrastructure, a concentration of huge companies, and the sheer size of the continent, conditions and habits differ across the pond.

However, in Europe many offline and small stationery retail shops still exist, customers generally shop more locally, and while companies ship across individual countries, there are fewer big companies with their own successful online shops.

This is expected to change.

The proof? Online giants like Amazon and Walmart heavily investing in the European market.

Amazon changed the game in Europe when it comes to online shopping and the online retail market is expected to grow exponentially over the next few years.

More and more companies from overseas are expanding into Europe, hoping to fill the gaps left behind by traditional retail, explore new opportunities, and expand their brand.

Reason 4: Internationalisation made easy by Amazon

Ready to expand but wondering how to go about it?

The answer is Amazon. No matter the size and origin of your company, Amazon makes internationalization and expansion easy – especially in Europe.

The European Amazon market actually consists of 8 individual marketplaces in the UK, Germany, France, Italy, Spain, Poland, the Netherlands, and Sweden with the last two being added just recently in 2020.

This speaks to the firm’s expansion plans in Europe and beyond in addition to the continued development of the Amazon fulfilment programs, which enable you to quickly ship your products to customers all across Europe.

Big American companies can gain customers that trust Amazon more than foreign websites and online shops by starting their expansion on Amazon.

Small companies can benefit from the fulfilment network that enables them to start expanding without too high of an investment.

All of this can be managed with just a single Amazon seller account.

You can choose to promote your products on Amazon and choose between several fulfilment programs.

Some only include Eastern-European countries, making storage cheaper but leading to higher shipping costs or longer shipping times, others include almost all countries in the EU and make sure your products arrive at your new customer’s doorstep as fast as possible.

No matter if you’re planning on selling on Amazon in the long run or are just trying to slowly get a leg up in a new market, expansion into Europe, the marketing of a brand, and the building of an image on a new continent are easier with Amazon.

Tip: Amazon is currently expanding into the Eastern hemisphere as well. Establishing your business in Europe now means you’re one continent closer and one step ahead when it comes to expanding to the Middle East, Africa and Asia.