Overview

Amazon sellers are pinning their hopes on Europe as tariffs bite into U.S. margins.
Not long ago, expanding to Amazon’s European marketplaces was a “nice-to-have” growth play for U.S. brands – a complex side quest pursued only by the bold. Today, that calculus has changed dramatically. With U.S.-China trade tariffs squeezing profits and supply chains in flux, Europe is emerging as a must-have strategy for Amazon sellers seeking relief and revenue diversification.

“It’s making it very difficult for brands to plan ahead…additional tariffs are effectively wiping out Amazon margins,” says Jake Russell, Co-Founder of Mercatus,

a leading UK-based Amazon agency, describing the current pressure on U.S. sellers. In this climate, Europe isn’t just an expansion opportunity – it’s a strategic hedge for margin protection.

In an episode of the MerchantSpring webinar, host Paul Sonneveld sat down with Jake Russell and Marc Miller (Mercatus Co-Founder) to unpack why Amazon’s European marketplaces now warrant every U.S. brand’s attention. This article distills their expert insights into a playbook for Amazon agency professionals. We’ll explore how tariffs are forcing a strategic pivot overseas, how Amazon’s beefed-up logistics (like Pan-EU FBA and Amazon Global Logistics) have lowered the barriers, and how Europe offers hidden ROI gems – from lower CPCs to untapped demand pockets. You’ll also learn practical tips on VAT, compliance, and how agencies can guide brands through this transatlantic expansion.

By the end, it will be clear why Europe has shifted from optional to indispensable for growth-focused Amazon brands. Let’s dive into this new e-commerce reality and map out a path from tariff-induced trouble to triumphant expansion in Europe.

Tariffs Force a Strategic Shift for Amazon Sellers

For years, U.S. sellers could treat high import tariffs as a background annoyance. No more. In 2025, tariffs have become a front-and-centre catalyst reshaping Amazon strategies. The U.S. has imposed or threatened steep duties on goods from major manufacturing hubs (notably China), with talk of rates jumping from 30% to as high as 100% on certain. These sudden spikes are “stacking on top of tariffs already in place,” Jake notes, and the uncertainty is crippling planning. Profit margins on Amazon were thin to begin with – now tariffs are slashing them outright.

Consider this stark math: if you had a 30% tariff rate and it jumps toward 100%, a product with a $10 landed cost would incur $13+ in tariffs alone, obliterating your margin. Many brands simply cannot absorb that hit and remain competitive on price. In Jake’s words, “It’s kind of putting things into a position where it’s effectively wiping out people’s Amazon margin.” Faced with this tariff pressure, U.S. brands are searching for a release valve.

Europe is emerging as that release valve. Why? Tariff differentials. Many popular product categories entering the EU have far lower import duties – often zero or under 6% – compared to the punitive rates into the U.S. market. Shifting some supply chains to serve Europe can protect margins by avoiding the worst tariffs. And thanks to Amazon’s integrated global infrastructure, a seller can now ship products directly from Asian factories into Europe (skipping U.S. entry) with relative ease. “With Amazon’s AGL (Amazon Global Logistics) network now, it means it’s really easy to completely circumvent your home territory and bring stuff straight from China…into Europe,” Jake explains. In fact, some brands are now viewing European sales not just as growth, but as a margin hedge – a way to buffer against volatile U.S. trade policy.

Beyond the tariff math, there’s a strategic rebalancing at play. As one industry commentator observed, “More interest in selling in Europe and Japan… large Amazon marketplaces not affected by China tariffs”myamazonguy.com. In other words, Amazon sellers are actively exploring Europe as a stabilising move. The EU is the world’s third-largest e-commerce market, generating around $632 billion in revenue with nearly 10% annual growth expected. That’s a massive opportunity that can no longer be dismissed as merely incremental. The pain of tariffs is accelerating a trend that was perhaps inevitable: serious Amazon brands diversifying globally to reduce over-reliance on one region. Europe, with its advanced economies and 450+ million consumers, is the obvious next frontier.

“U.S. sellers think Europe is too small to matter. But with 450 million consumers here and huge category nuances, the opportunity can be far bigger than they realise.” – Jake Russell, Co-Founder of Mercatus

Amazon’s Logistics Unlock: Easier Than Ever to Go Pan-EU

Expansion hesitancy in the past wasn’t just about tariffs or demand – it was logistical. Shipping inventory across the Atlantic, dealing with multiple fulfillment centres, and navigating customs felt daunting. Amazon has directly addressed these hurdles in recent years, making international FBA expansion more seamless than ever. Marc Miller points out two game-changing developments:

• Amazon Global Logistics (AGL) – Amazon’s end-to-end freight forwarding service can now pick up your goods in China (or other manufacturing hubs) and deliver straight into European Amazon fulfillment centres. Crucially, you no longer need full container loads to use it; less-than-container (LCL) and even small parcel shipments are supported. This is a big deal for small-to-mid sellers – you can start with modest volumes. 
  
  Amazon essentially becomes your freight partner, with a single interface in Seller Central to manage inbound shipping, customs clearance, and delivery to the warehouse. “You don’t have to be shipping huge quantities,” notes Marc. “You can now ship less than container loads, so small parcel shipments, into Europe as well… a relatively seamless door-to-door solution for a brand in the U.S. manufacturing in Asia.” In short, AGL takes the logistics nightmare and turns it into a simple extension of FBA.
  
  
• Pan-European FBA (Pan-EU) – Amazon’s Pan-EU FBA program has matured into a robust, unified network across Europe’s major markets. Enrolling in Pan-EU lets you send inventory to one central EU country (for example, Germany), and Amazon will then automatically distribute your stock across its European fulfillment centres according to demand patterns. You are essentially pooling inventory for the EU as a whole, while still offering customers in, say, Spain or Italy the same local Prime delivery speed as if you warehoused there. 
  
  “Effectively, you’re talking about one large network across many countries,” Marc explains. The system places your stock where it’s needed to meet local Prime delivery promises, and you get to charge local FBA fees based on the shipment’s destination country (often cheaper than cross-border fees). This means you’re not manually splitting and managing stock country-by-country – Amazon’s network algorithms do it for you. The Pan-EU program eliminates the traditional cross-border logistics nightmare, as one playbook put it, cutting shipping costs by 30–40% while delivering Prime speeds EU-wide.
  
  

Between AGL and Pan-EU FBA, Amazon has “taken that barrier away” of getting products over the pond and into customers’ hands. Marc and Jake emphasise how underutilised these services still are – many U.S. brands simply aren’t aware how far Amazon’s infrastructure has come. Need proof of Amazon’s commitment? In just the last couple of years, Amazon launched new marketplaces in Europe (Belgium in 2022, Ireland in 2023) and continues to invest heavily. They announced a €1 billion investment in Belgium to expand logistics and enable same-day deliveries, and similarly big commitments in other EU countries. The European fulfillment network now spans over 40 fulfillment centres in the EU, with denser coverage and more last-mile capabilities than ever.

“There’s now a route into that market – a relatively seamless, door-to-door solution. I don’t want to say easy, but Amazon has made it as frictionless as possible.” – Marc Miller, Co-Founder of Mercatus

The Bottom Line: The old excuses (“too hard to ship,” “need boots on the ground”) no longer hold. A U.S.-based seller can, with a few clicks and some paperwork, send inventory from an overseas factory straight into Amazon EU warehouses and sell across Amazon UK, Germany, France, Italy, Spain, and beyond from one unified account. Amazon’s European Expansion Accelerator even allows listing your products in all EU marketplaces in < 3 days. The playing field is vastly more level for a newcomer to Europe – which means speed to market can be your competitive advantage if you move now while others hesitate.

Hidden ROI in Europe: Lower CPCs and Untapped Demand

Aside from the tariff workaround and expanded customer base, Europe offers something equally compelling to Amazon sellers: better return on ad spend and unique demand pockets. In many categories, competition in Europe is simply less intense than on Amazon US, translating to cost efficiencies and revenue upside that might surprise you:

• Advertising Cost Savings: Amazon’s ad ecosystem in Europe is a few years behind the US in terms of saturation. “The US is really mature and really competitive… In Europe, some of these territories are still somewhat green,” Jake observes. What that means in practice is lower Cost-Per-Click (CPC) rates for sponsored product and keyword ads, especially in secondary markets. For one Mercatus client, the top-of-search bid in France was around $1 versus $2+ in the US for the same category. That’s a ~50% cheaper click, dramatically improving ACOS and ROAS if you can maintain conversion. Not every niche will be that extreme, and the UK & Germany have higher CPCs than, say, Spain or the Netherlands, but the general trend holds: less competition = more affordable customer acquisition. Fewer aggressive 3P sellers and big-budget aggregators are vying for ad slots, giving new entrants breathing room to gain visibility. Lower CPCs and better organic reach in Europe can directly boost your advertising ROI and overall profit margins compared to the hyper-competitive U.S. marketplace.
  
  
• Category Opportunities & Pricing Power: Europe isn’t one monolithic market – it’s a collection of distinct consumer cultures with differing tastes. This actually works to a seller’s advantage if you do your homework. There are product categories in Europe that are unexpectedly large or fast-growing relative to U.S. demand. Jake shared a striking example: In France, a specific style of cat scratching post was among the top 10 search terms on Amazon – reflecting that ~30% of French households own cats (one of the highest rates globally). A pet product brand might find France far more lucrative than the U.S. for certain items. Similarly, stationery in Spain, planners in Italy, or home décor in Germany might have local fanbases and seasonality that you can tap into. By researching country-specific Amazon search trends and keywords, you might discover a “hidden gem” market for your product that’s less crowded and ripe for growth. As Jake puts it, “It’s worth going to do the research to see what the volume is in my category, because you may be surprised.”
  
  

Moreover, with fewer competitors in some niches, brands often enjoy stronger pricing power in Europe. We’ve seen cases where a supplement selling for $9 in the US can sell for the equivalent of $12–13 in Europe, simply because there’s less race-to-the-bottom pressure (even after accounting for VAT). European customers can be less price-sensitive in premium categories and often exhibit brand loyalty once trust is earned. By expanding, U.S. brands might actually reset their pricing at a healthier level, especially if the U.S. listing had been eroded by grey-market sellers or aggressive rivals. Europe can be a fresh start to protect your brand value and margins.

• Longer Tail Keywords & Higher Conversion: In non-English markets, the nature of customer search behaviour can benefit sellers. For instance, German compound words and the use of different languages in Switzerland, Austria, etc., lead to a broader long-tail of search terms. Instead of a few ultra-dominant keywords (as in the U.S.), you might find dozens of moderately popular search queries. If you localise your content well, you can capture this long-tail traffic more easily, yielding steady sales without exorbitant bids. Additionally, if you localise properly (more on that next), conversion rates can be impressive. German shoppers, for example, reward detailed listings; once they find a product that ticks their boxes, they convert at rates often higher than U.S. shoppers. All this can mean higher sales volume at a lower cost per sale – the Holy Grail for Amazon ROI.
  
  

In short, Europe offers a one-two punch of top-line growth (new markets, more customers) and bottom-line efficiency (cheaper ads, potentially higher prices, and new niches). It’s like discovering an extension of Amazon where the rules aren’t so stacked against you as a newcomer. Of course, capitalising on these advantages requires effort – mainly in how you execute your expansion and cater to each local market, which we’ll address next.

Navigating VAT, Compliance, and Operational Hurdles

Expansion does bring its share of paperwork and regulatory obligations. The good news is these hurdles, while real, are manageable with the right partners and planning. As Jake and Marc advise, don’t let fear of bureaucracy derail your European ambitions. Here are the key areas to address:

• VAT Registration & Filing: Value Added Tax (VAT) is the big one. In Europe, you need to charge VAT on sales and file returns in each country where you store inventory. Under Pan-EU FBA, Amazon might store your products in up to 7 or more countries across the EU. That means obtaining VAT registrations in each of those countries (e.g. Germany, France, Italy, Spain, Poland, Czech Republic, etc.) and periodically filing VAT returns. Sounds intimidating? In practice, Amazon provides a VAT Services program that connects you with vetted tax service partners who handle the filings (often co-funded or discounted by Amazon to encourage expansion). It’s mostly a matter of paperwork and paying the required taxes – which are usually passed on to customers via the VAT on your price. Many sellers also choose one country (like Germany) to start, enable Pan-EU after a trial period, and then roll into the full multi-country VAT setup once volumes justify. The key is not to skip this – operating without proper VAT registration can get your account suspended. Plan ahead (it can take a few weeks per country to get a VAT number) and lean on experts. It’s a solvable, routine task, not a deal-breaker.
  
  
• EORI Number: To import goods into the EU, you’ll need an Economic Operators Registration and Identification (EORI) number, basically a customs registration. This is straightforward – you apply through an EU customs portal (or your freight forwarder can assist) and get a unique number used on shipping documents. The EORI ensures your imports are logged for customs clearance. Importantly, you’ll need a separate UK EORI if you plan to ship into the post-Brexit UK as well. Again, this is a one-time setup to be done prior to your first shipment.
  
  
• Product Compliance (GPSR): Europe has stricter product safety and compliance rules in certain categories than the U.S. One sweeping new regulation is the General Product Safety Regulation (GPSR), effective from late 2024. Under GPSR, non-EU sellers must appoint an EU-based “Responsible Person” for product safety who can be contacted in case of issues. You also need to provide traceability info (like batch or serial numbers) and ensure you can furnish technical documentation or safety declarations if requested. How to handle this? There are compliance agencies and services that will act as your Responsible Person for a fee. Amazon even piloted an “Amazon Responsible Person” service before; now third-party firms (often the same ones doing your VAT or EORI) can fill this role. Practically, it means adding a sticker or info on your product packaging with the EU representative’s contact. It’s an extra step, but, as Jake says, “It’s not very hard to do… It’s nothing that can’t really be overcome.” Once set up, you usually just upload proof to Amazon to ensure your listings remain active.
  
  
• Extended Producer Responsibility (EPR): The EU is keen on environmental responsibility, so EPR laws require sellers to take responsibility for recycling and disposal of certain products and packaging. Specifically, if you sell electronics, batteries, or even general products that create packaging waste, you must register and report the volume of such items. For example, Germany’s VerpackG law and France’s recycling laws mean you must report packaging weight/units sold and pay a small eco-contribution fee. Amazon now asks for EPR registration numbers (like the LUCID ID in Germany for packaging) to be on filesellercentral.amazon.ie. Don’t panic – there are consulting firms and online portals to handle EPR reporting for each country. Often, you can use one provider to manage France, Germany, etc., all in one dashboard. You’ll tally, say, X kg of packaging shipped in a year and pay perhaps a few hundred euros towards recycling programs – not a huge cost, but a necessary compliance step. Once a year, reporting like this is usually sufficient. Amazon even offers “EPR Pay-on-Behalf” in some cases, meaning they collect and remit these fees from you to simplify it. The key is to register before you start selling to avoid listing blockages.
  
  
• Localisation & Customer Support: While not a legal requirement, it’s operationally critical to treat each European marketplace separately in terms of language and culture. Listings should be translated by humans (not just machine translation) to include local keywords and to resonate with local shoppers. This includes adapting measurements to metric, using local spellings, and reflecting any country-specific usage. For example, British English vs. American English (colour vs. colour, etc.), or using localised imagery and references in A+ content where possible. Investing in proper translation and listing optimisation will pay off in conversion and reviews. Additionally, plan for customer service in multiple languages – Amazon requires you to answer buyer messages in the buyer’s language. You can use Amazon’s Translated Messages service or hire a service/VA for this. It’s usually low volume, but it matters for account health and customer satisfaction. Seasonality and holidays differ too (e.g., Singles Day isn’t big in Europe, but local holidays and Amazon Prime Day timings might differ). An agency or consultant with European experience can help you map out these nuances so you run promotions smartly in each country.
  
  

Yes, all this sounds like a lot of red tape. But the consensus from experienced sellers and agencies is that none of these tasks are show-stoppers. They are one-time or periodic chores that can be outsourced to specialists. “That’s the benefit of working with your agency and strong partners within that territory to take that headache away,” Jake says. A full-service Amazon agency will typically have a roster of go-to tax advisors, compliance consultants, freight forwarders, and translators to either handle these tasks or guide you through them. As a brand, you don’t have to hire in-house experts on European law – you just need to partner with those who do this routinely. The investment in compliance is a small price for unlocking a multi-million-dollar market. Plus, these regulations apply to everyone; they actually raise the barrier to entry, meaning fewer casual competitors – an upside for you if you commit and do it right.

Winning in Europe: How Agencies Like Mercatus Drive Success

Launching in Europe is not a simple copy-paste of your U.S. Amazon playbook. Succeeding requires strategy, localisation, and on-the-ground know-how. This is where an Amazon-specialised agency can be invaluable. Agencies such as Mercatus (where Jake and Marc work) have honed a process for expanding brands internationally. Here’s how they help brands seize the European moment:

• Market Research & Entry Strategy: A good agency will start by auditing your brand’s potential in Europe. This includes country-by-country keyword research, sizing up category demand, and identifying which products in your catalogue will likely win in which markets. They look at cultural quirks (like the French cat furniture trend or Germany’s love of technical specs) to inform your targeting. Rather than a blanket approach, they craft a market-by-market plan. For example, you might launch in the UK and Germany first (the largest markets), but also fast-track France if your category is trending there. They’ll also consider if any product modifications are needed for compliance (plugs for electronics, labelling for languages, etc.). The outcome is a roadmap: which marketplaces to launch first, how to position the product in each, and what revenue expectations to set (tempered with initial learning periods).
  
  
• Stepwise Inventory and Budget Planning: Marc advises a “start small, then scale” mindset. Agencies help determine initial stock quantities so you can test the waters without overcommitting inventory. They factor in projected demand, lead times, and the need to have enough stock for Pan-EU distribution (Amazon might want ~50 units per SKU to spread around). The agency will also budget for advertising in each country, knowing that some markets might need a bigger push. Crucially, they’ll set up the metrics to monitor – looking at conversion rates, ad performance, and sales by country – to refine the strategy. As data comes in, they can advise when to send the next shipment, when to introduce more SKUs, or when to even send inventory directly into a specific country if one is outperforming (e.g., if Spain shows huge promise, you might split future shipments to send a pallet straight to Spain’s warehouse to reduce transfer times). This agile approach ensures you scale up investment in Europe in line with proven demand, keeping ROI positive.
  
  
• Optimisation of Listings and Ads: Agencies bring localisation experts to translate and optimise your Amazon listings (titles, bullets, back-end search terms) for each language. They ensure you’re hitting the right keywords in German, French, Italian, Spanish, etc., often uncovering those local synonyms or phrases that generic translators miss. This drives discoverability. On the advertising side, they tailor PPC campaigns to each marketplace – adjusting bids to local CPC levels and leveraging different ad types as available (e.g., Amazon.nl (Netherlands) may have had limited ad options at first, whereas UK/DE have the full suite). They also watch things like conversion rate differences – maybe your product needs more image angles for Italian shoppers or different phrasing in France. Continuous optimisation is part of the service. With professional management, brands can rapidly achieve strong sales velocity and ad efficiency in Europe, whereas DIY sellers might burn money learning the nuances.
  
  
• Compliance and Account Management: As touched on earlier, agencies either handle or coordinate the compliance pieces. They’ll set up your VAT filings through partners, make sure your EPR registrations are done, and keep your Amazon account health in good shape by uploading all required documents (like proof of Responsible Person for GPSR, etc.). Essentially, they act as your European expansion project manager, so nothing falls through the cracks. If issues arise (say a customs hold or a listing compliance warning), they know how to address it quickly. For a busy brand team, this oversight is critical – it de-risks the expansion.
  
  
• Ongoing Growth and Q4 Maximisation: Agencies like Mercatus don’t just launch you and leave you. They continue to analyse and tweak. For instance, if data shows return rates are lower in France than in the US (often the case, saving some costs), or that one product is trending in Italy due to a local holiday, they’ll capitalise on it – maybe by suggesting a country-specific promotion or bundling strategy. They also keep you informed of Amazon Europe updates (new programs, fee changes, marketplace launches like Amazon Poland or Sweden, etc.). The goal is to ensure you’re fully leveraging Amazon’s ecosystem – perhaps enrolling in Pan-EU coupon deals, Prime Exclusive discounts timed for events like Black Friday across Europe (which sometimes starts earlier than in the US). This kind of proactive management allows brands to thrive year-round and especially during Q4 in multiple markets at once, something that would overwhelm most in-house teams. As Paul Sonneveld noted, the days of blindly sending a container because you’re “bullish” are over – it’s about smart, data-driven expansion. A capable agency functions as an extension of your team, handling the heavy lifting so you can focus on big-picture strategy and product development.
  
  

“It doesn’t have to be a hard sales conversation…we’re always up for talking. We love to meet brands and help them understand the ecosystem.” – Jake Russell on engaging with an Amazon expansion agency

Conclusion: Europe Beckons – Don’t Get Left Behind

Six months ago, Europe might have been lingering on your roadmap’s back burner. Today, it’s front and centre – and the timing couldn’t be better. Tariff turmoil is forcing Amazon sellers to adapt or see profits evaporate. Those who act decisively by expanding to Europe can transform a headwind into a tailwind, tapping into a vast e-commerce market that’s hungry for new brands and products. With Amazon smoothing the logistics via Pan-EU FBA and Global Logistics, and with agencies ready to navigate the complexities, the question is less “Why expand?” and more “Why not, and why not now?”.

By treating Europe as a core pillar of your Amazon strategy, you’re not just adding sales – you’re building resilience. You’re diversifying market risk, gaining new customers, enjoying potentially better ROI, and outpacing competitors who remain U.S.-focused. As we’ve outlined, success in Europe comes from understanding local nuances and planning diligently. The playbook is clear: address compliance early, localise your approach, leverage Amazon’s programs, and consider expert partners to accelerate learning.

If you’re looking to streamline the operational side of multi-market selling, consider booking a demo with MerchantSpring – our platform is designed to help Amazon agencies and sellers efficiently manage accounts across regions, track performance, and optimise for growth. Don’t let complexity hold you back. With the right strategy and support, your brand’s next big growth chapter might just be written in multiple languages.

It’s time to turn tariff troubles into European triumphs.  The European marketplace is no longer a “nice-to-have” – it’s a must-have, and the sellers who move first will reap the rewards. Will you be among them?