Amazon has announced that it will be ending the Call-Off Stock (COS) program on August 1, 2024. Until that date, sellers can continue to sell existing inventory stored under the COS program and pay domestic FBA fees. However, no new COS countries can be enabled after the announcement. After August 1, 2024, sellers will need to pay European Fulfilment Network fees instead of domestic FBA fees for any products that were previously enrolled in the COS program. This change will require Amazon sellers to adapt their VAT compliance and inventory management strategies for their businesses across Europe.

What is the Call-Off Stock Program?

Call-Off Stock (COS) is a program offered by Amazon that allows sellers to store inventory in Amazon fulfillment centers across Europe without the need for a local VAT registration. Under this program, sellers only need to be VAT-registered in at least one of the four eligible European countries (Germany, France, Italy, or Spain), and adhere to the VAT reporting requirements in that country. Amazon then handles the cross-border movement and sale of the inventory on the seller's behalf, ensuring the goods are returned to the original country within 12 months if unsold. This simplified approach has allowed sellers to expand their businesses across the European market more easily.

Key Changes for Amazon Sellers

1. Register for VAT in Relevant Countries

Sellers must now obtain VAT registration numbers in each country where they store inventory to avoid penalties.

2. Updated Fee Rates

From August 1, European Fulfillment Network (EFN) rates will replace domestic FBA rates in countries previously covered by COS.

3. Pan-European FBA Activation

To maintain domestic FBA rates, sellers need to activate the Pan-European FBA program through VAT registration in relevant EU countries.

Pan-EU Program vs. ENF

(Image source: Amazon)

Transition Plan & Support

Amazon has outlined a transition strategy to assist sellers:

• Sellers can continue selling existing COS inventory using domestic logistics rates until August 1.

• Amazon will facilitate free returns of unsold COS inventory to the original inbound country by August 31, 2024.

• Amazon offers €540 per country reimbursements or fee difference (based on the enrollment date) to incentivize sellers to enable Pan-EU FBA by November 1, 2024.

Benefits of Pan-EU FBA

The Pan-EU FBA program offers several advantages:

• Expanded Customer Reach: Access to a broader European customer base with faster delivery times.

• Centralized Inventory Management: Simplified logistics through a single fulfillment center.

• Operational Efficiency: Reduced complexity in managing multiple inventory locations.

Pan-EU FBA vs. European Fulfillment Network

• Cost Structure: Pan-EU generally offers lower overall fulfillment costs, especially for sellers with sales spread across multiple European countries.

• Cross-Border Fees: Cross-border fees are eliminated in Pan-EU for countries where you have inventory, but in EFN you need to pay these fees for all cross-border sales.

• Prime Eligibility: Pan-EU offers wider Prime coverage, potentially leading to more sales without increased shipping costs.

• Inventory Management: Pan-EU requires more complex inventory management across multiple countries, while EFN is simpler but potentially more expensive.

• VAT Obligations: Pan-EU requires VAT registration in all participating countries, while EFN typically requires fewer VAT registrations.

What Should Sellers Do Now?

To avoid any disruptions, you should act promptly to ensure a smooth transition.

Step 1: Assess your current inventory and selling strategy in EU countries.

Step 2: Initiate VAT registration in relevant countries where you plan to store inventory.

Step 3: Consider activating Pan-EU FBA to maintain domestic FBA rates.

Step 4: Review and adjust pricing strategies to account for potential new costs.

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