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Amazon FBA in Germany

The Gateway to Online Arbitrage in the EU 

Thomas chats to Philipp, also known as Happy Arbitrage, about Amazon FBA in Germany

As the biggest online marketplace in Germany, and the second biggest Amazon marketplace on earth, German Amazon is a goldmine for resellers. It’s also a gateway to selling on other European marketplaces in France, Spain, and Italy. Happy Arbitrage has been taking advantage of Amazon FBA in Germany for four years, and has built his profits to €1.3 million a year. I was interested in reselling on German Amazon, so I interviewed Happy Arbitrage on the Fast Track FBA YouTube channel. Here’s a summary of our discussion, just in case you missed it. 

Topic Rundown

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Who is Happy Arbitrage?

Happy Arbitrage's annual earnings from Amazon FBA in Germany and the EU total one point three million euros.

Philipp, also known as @HappyArbitrage, got started with Amazon FBA in Germany four years ago. He got into it for the same reason many of us resellers do – he wanted a reliable second income stream.  

 

However, though arbitrage was popular in the UK and US, it hadn’t yet reached Germany. Instead, Philipp considered making a private-label mouse catcher. But, after scrutinizing the numbers and recognizing the limitations of his starting capital, he looked elsewhere.

 

The simplicity of the profit margins, and the chance to earn up to €30,000 a month, solidified arbitrage as the right choice for Philipp. After learning about Amazon FBA through YouTube and online communities, he decided to go for it.

 

Though it was a long journey, Philipp is now living the dream as a full-time online arbitrage seller. He’s a pioneer for Amazon FBA in Germany, and has used his profits to set up a business that helps new OA sellers get started. 

What’s Different About Amazon FBA in Germany?

Happy Arbitrage gives his verdict on German Amazon, noting that it's a very good place to sell.

Even experienced arbitrage sellers, myself included, think twice about selling on Amazon.DE. The volume of cancellations coupled with some anti-reseller sentiment among suppliers makes the German Amazon marketplace a challenging platform to conquer. 

 

But, while there are potential pitfalls, Philipp is quick to let me know that arbitrage through Amazon.DE has a lot of benefits. Here are the main differences you need to look out for if you’re considering Amazon FBA in Germany: 

Suppliers

While many German suppliers are more than happy for you to bulk buy and purchase products as many times as you need to, some are not. Generally, larger suppliers will have a control mechanism that prevents you from purchasing above a certain amount. Take some time to learn about each supplier, and try not to push the limits. 

Coupon Codes

Any arbitrage seller worth their weight in profit knows that sourcing products at a lower price is better. However, this is slightly more difficult in Germany since coupon codes aren’t as popular. Philipp explains that while you should still search for coupon codes, you shouldn't expect huge savings. Instead, work with the original prices when calculating profits.

Regulations

Germany has several regulations that ensure online marketplaces protect their customers. For example, to sell a product on German Amazon, sellers need to prove that it has the CE mark. This means the product conforms with European health and safety standards. Often, the language of product instructions will need to be in German, too. Make sure to bear all this in mind when sourcing and listing your products. 

 

You can find more information about product regulations on German Amazon here. 

Is Reselling on German Amazon Competitive?

Happy Arbitrage explains why UK-based sellers have an advantage with Amazon FBA in Germany. Because suppliers' prices are cheaper in the UK.

Next, Philipp and I discussed whether resellers should expect some competition if they're considering Amazon FBA in Germany. I learned that:

 

  1. Many German FBA sellers don’t do arbitrage full-time, so their stores will come and go. This is great if you sell in a specific niche. However, with reselling becoming increasingly popular throughout Europe, sellers are “coming far more than they are going.” 

 

  1. French, Spanish, and Italian resellers can easily set up stores on German Amazon. Since the German marketplace is bigger, you should expect to see a consistent increase in competition from sellers around Europe. 

 

  1. Competition from UK sellers is at a relative low on Amazon.DE. Additionally, UK sellers can buy from suppliers and resell at a cheaper price point. This means any budding arbitrage resellers from the UK will have a strong advantage over their continental competition. 

Seller Fees for Amazon FBA in Germany

Happy Arbitrage explains that, on the whole, wholesale selling is much better for prep center fees, as you'll only pay between forty and sixty cents per unit.

Once I’d got to grips with the basics, Philipp and I explored the added costs resellers will need to factor in if they’re considering arbitrage in Germany. These include: 

 

VAT – Exporting cheaper products from the UK to Germany means higher profits. However, this also means European-based sellers will need a UK tax consultant to claim VAT on their behalf. Otherwise, you’ll need to consider the VAT as part of the purchase price. 

 

Prep – I was shocked to hear that there are only 7 prep centers in Germany! This means you won’t have much choice when it comes to pricing for product prep. Philipp estimates that he pays from €1 – €1.50 per unit, and recommends comparing prep centers in the Czech Republic or Poland for cheaper options. 

 

Philipp went on to tell me that the low volume of products for Amazon FBA in Germany is what creates these steep prices. However, when it comes to wholesale, which generally deals with larger product volumes, you’ll likely end up paying €0.40 – €0.60 per unit.  

How to Scale Amazon FBA in Germany

Happy Arbitrage explains that if your company doesn't have the capital for a GmbH classification, you can save up as a UG company and make the switch.

To be able to take advantage of wholesale you’re going to need to scale your reselling business. Scaling isn’t easy, and requires you to dedicate a significant amount of time and effort. Fortunately, with a VA on hand, you can share the responsibilities and expedite the scaling process. 

 

Check out the Fast Track FBA VA Academy to find your dedicated VA today.

 

Another thing to consider is your company’s classification. In Germany, you can register as:

 

  • A UG (Unternehmergesellschaft), also known as a Micro-GmbH, which requires less initial capital.

 

  • A GmbH (Gesellschaft mit beschränkter Haftung), which has a €25,000 capital requirement. 

 

Philipp recommends registering as a GmbH because you’re much more likely to get wholesale contracts. However, it’s definitely possible to start as a UG and switch to a GmbH classification once you’ve raised enough profit. 

The Biggest Disadvantage of Amazon’s EU Marketplaces

Happy Arbitrage shares the biggest pitfall of Amazon FBA in Germany. Customers are more likely to exploit the complaints process so they don't have to pay the returns fee.

Finding out what issues you might come up against when doing Amazon FBA in Germany is vital. Philipp shared that the biggest pitfall for new sellers is customer complaints. Here’s a little bit more information so you can be prepared for IP complaints in EU Amazon marketplaces: 

 

  1. In Philipp’s experience, German customers are much more likely to select false reasons for returns so they don’t have to pay the return fee. This means, as well as losing profits, you’ll need to pay for products to be returned. 

 

  1. When investigating complaints, amazon.DE requires the invoice and some in-depth product information. For US and UK sellers who purchase from established brands and suppliers, sourcing the necessary manufacturing information can be near impossible. 

 

  1. Philipp estimates that he gets around 2 IP complaints from German customers, and between 3 and 6 from French customers, every month. In total, 90% of his IP complaints come from France. 

 

No matter how hard you try to satisfy your customers, complaints are inevitable. Be sure to expect some losses each month, maintain good relationships with your suppliers, and act fast when you receive complaints. 

Happy Arbitrage’s Top Tips

Happy Arbitrage's top tip for starting Amazon FBA in Germany is always have the foundation right.

Next, Philipp shared some of his tips and tricks for getting started with Amazon FBA in Germany and the EU. These include:

 

  • Start with Amazon FBA in Germany because it's the easiest country for  creating a company and registering for VAT. Then you can move on to Italy, France, and Spain. 

 

  • Spend some time familiarizing yourself with the laws and regulations for online arbitrage in the EU and the individual countries you intend to sell in. 

 

  • Research the cultural differences that affect customer expectations in EU marketplaces. 

 

 

  • Take the time to build a strong foundation so you can apply the same techniques you use for UK or US Amazon FBA. 

Getting Credit

Happy Arbitrage shares that getting credit for your Amazon FBA in Germany endeavour depends on your business's background.

As a final note, I wanted to find out more about how easy it is to access capital in Germany. 

 

Getting access to credit for US-based resellers can be extremely difficult in the first few years, so I always recommend having $10,000-$30,000 in starting capital. Philipp advised that, though German-language forms and data access can be a challenge, getting credit in Germany is a lot easier. 

 

He recommends starting with an eCommerce financier, which will give you enough credibility to apply for an Amex Business account. After that, if you have the necessary securities, you can seek credit from German banks or even through government subsidies. 

Watch the Full Interview with Happy Arbitrage Here

You can find the Happy Arbitrage community on YouTube, Facebook, or their website. 

 

Now that you know how to get set up doing Amazon FBA in Germany, check out our other handy guides like: Conversion Rates in the EU for Resellers, 6 Online Arbitrage Tools for 2024, and How a VA Will Help You Scale Your Amazon Business. 

 

We also created a playlist on YouTube named the Amazon FBA Full Course 2024.

 

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