Amazon PAN EU vs EFN: Advantages and disadvantages

Amazon Pan-EU vs. EFN: Advantages and Disadvantages

As an Amazon seller looking to expand into the European market, you have two main options for fulfilling orders across multiple countries: Amazon Pan-European FBA (Pan-EU) and the European Fulfillment Network (EFN).

Both programs offer unique benefits and drawbacks, depending on the size of your business, your sales volume, and your logistical preferences. In this article, we will dive deep into the advantages and disadvantages of both programs to help you make an informed decision.

What is Amazon Pan-European FBA (Pan-EU)?

The Pan-European FBA program allows sellers to store their inventory in multiple Amazon fulfillment centers across Europe. Amazon automatically distributes the products based on local demand, ensuring faster deliveries and lower shipping costs.

This program is designed for sellers who want to reach customers in multiple European countries efficiently while leveraging Amazon's vast logistics network.

Advantages of Pan-European FBA

1.

One of the biggest advantages of Pan-EU is the ability to offer fast delivery times to customers across Europe. Since your inventory is distributed across several fulfillment centers in different countries, Amazon can ship products from the closest location to the customer. This often results in next-day or even same-day delivery, which significantly improves customer satisfaction and increases the likelihood of repeat purchases.

2.

By storing your products in multiple European countries, you avoid expensive cross-border shipping fees. Instead, you only pay local fulfillment fees in each country where your products are stored and sold. This can lead to substantial cost savings, especially for high-volume sellers. According to some estimates, sellers can save up to 53% on fulfillment fees compared to using EFN.

3.

Products stored in Pan-EU fulfillment centers are automatically eligible for Amazon Prime in all participating countries. This is a significant advantage because Prime products receive higher visibility on Amazon's platform and are more likely to win the Buy Box. Prime customers also tend to prefer products with fast shipping options, which can boost your sales.

4.

With Pan-EU, you can easily sell your products across multiple European marketplaces without having to manage separate inventories for each country. This opens up access to millions of potential customers in major markets like Germany, France, Italy, Spain, and more. By leveraging Amazon's logistics network, you can expand your business without needing a physical presence in each country.

5.

Amazon handles the distribution of your inventory across its European fulfillment centers based on local demand forecasts. This means that you don't have to worry about manually managing stock levels in each country—Amazon takes care of it for you14. This automation not only saves time but also ensures that your products are always available where they are most needed.

Disadvantages of Pan-European FBA

1.

One of the biggest challenges with Pan-EU is the need for VAT registration in every country where your products are stored. This adds significant complexity to your tax compliance efforts because you'll need to file VAT returns in multiple jurisdictions. For sellers unfamiliar with international tax laws, this can be a daunting task that requires professional assistance.

2.

While shipping costs may be lower with Pan-EU, storage costs can be higher because you're storing inventory in multiple locations across Europe3. If demand fluctuates or if certain products don't sell as expected in specific countries, you could end up paying for unused storage space.

3.

Although Amazon automates much of the inventory distribution process, managing stock levels across multiple countries can still be complex—especially if you sell a wide range of products or experience seasonal demand spikes. You may need advanced inventory management tools or software to keep track of where your products are stored and how much stock is available at any given time.

What is the European Fulfillment Network (EFN)?

The European Fulfillment Network (EFN) allows sellers to store their inventory in one country while fulfilling orders from customers across Europe. When a customer places an order from another European country, Amazon ships the product from your central warehouse location to that customer, even if it involves cross-border shipping.

Advantages of EFN

1.

With EFN, you only need to store your inventory in one country—typically your home market—while still being able to sell across all European marketplaces. This simplifies logistics because you don't have to manage stock levels or shipments across multiple countries.

2.

Since you're only storing inventory in one location, storage costs are generally lower compared to Pan-EU. This makes EFN a good option for smaller sellers or those just starting out who may not have enough sales volume to justify distributing their inventory across multiple countries.

3.

Unlike Pan-EU, which requires VAT registration in every country where your products are stored, EFN only requires you to register for VAT in the country where your warehouse is located. This significantly reduces the administrative burden associated with international tax compliance.

4.

EFN is an ideal solution for sellers who want to test new European markets without committing to storing inventory in multiple countries right away. You can gauge demand from different regions while keeping all your stock centralized.

Disadvantages of EFN

1.

The biggest drawback of EFN is that cross-border shipping fees tend to be higher than local fulfillment fees. Since you're shipping from one central location rather than distributing inventory closer to customers, you'll incur additional costs when fulfilling orders from other countries.

2.

Because EFN relies on cross-border shipments, delivery times are typically longer compared to Pan-EU. Customers may have to wait several days—or even weeks—for their orders if they live far from your central warehouse location. This can negatively impact customer satisfaction and reduce repeat business.

3.

Products fulfilled through EFN do not automatically qualify for Amazon Prime unless they are shipped within the same country as the warehouse. This means that customers outside of your home market may not see Prime shipping options when purchasing your products, which could hurt sales.

4.

If you're using EFN instead of Pan-EU or Central Europe Programs (CEE), you'll incur additional per-unit penalties for each item sold outside the warehouse's home country. These penalties increase overall fulfillment costs and make EFN less cost-effective for high-volume sellers.

When Should You Choose Pan-EU?

The Pan-European FBA program is best suited for large-scale sellers with high sales volumes (at least 1,500 units per month) who want faster delivery times and lower shipping costs across Europe. If you're looking for maximum market reach and are willing to deal with the complexities of VAT registration and managing stock across multiple countries, Pan-EU offers significant advantages.

When Should You Choose EFN?

The European Fulfillment Network is ideal for smaller sellers or those just starting out who want a simpler logistics solution without dealing with VAT registrations in multiple countries. EFN allows you to test new markets without committing significant resources upfront but comes with higher shipping costs and longer delivery times.

Conclusion

Both Amazon Pan-European FBA and EFN offer valuable solutions depending on your business needs and goals. If you're a large seller looking for fast deliveries and reduced shipping costs across Europe—and you're prepared for complex VAT compliance—Pan-EU might be the best choice for you. However, if you're a smaller seller or just starting out with international sales, EFN provides a simpler way to expand into new markets without as much logistical complexity.Ultimately, choosing between these two programs depends on factors like sales volume, target markets, logistical capabilities, and willingness to navigate international tax regulations.