WCA 2018: If you can’t beat Amazon, fulfill ‘em

SINGAPORE – Few other names are as sure to pack a conference session room as fast as the word “Amazon.” Such was the case on Tuesday during the second day of e-commerce keynote discussions here at the 10^th annual WCA Worldwide Conference, when Rob Donald, director and co-founder of Corten Logistics spoke about his experiences performing so-called “Fulfillment by Amazon” (FBA) duties.

Rather than compete directly with the might of Amazon, Corten has thrived as one of the many 3PLs helping out with FBA services across five main markets: the U.K., Germany, France, Italy and Spain. “There are multiple different opportunities you can offer to your customers,” he said. “With Amazon, it’s not just about the freight, there’s also returns management, warehousing – all these extra things where you can add revenue to your business.”

The London-based independent forwarder first “stumbled into Amazon” as third-party sellers in 2013, making some of the e-tail giant’s first FBA deliveries, Donald told the rapt crowd. “By 2015 we started handling cross-trade shipments from China to Los Angeles, and by 2016 we set up a warehouse,” capable of storing 300 pallets. Today, he said, Corten operates seven warehouses dedicated mostly to handling FBA.

To be an FBA forwarder, you can be located outside one of the five European markets listed above, but there are some hoops to jump through to comply with the complex value-added tax (VAT) system in Europe. “You must be VAT registered in any country where your stock is physically stored,” Donald said. “There are also distance-selling thresholds, which, as of this year, are quite low. In France, it’s €35,000, in the U.K. it’s ₤70,000, in Germany it’s €100,000.”

Amazon also has a product called “Pan-European Fulfillment,” but it will require VAT registration in every marketplace in the EU, because products would have to be stored in each country. “And if your customer doesn’t do, it can end up in a lot of back taxes and fines,” he warned. At the end of 2017, there was a massive crackdown in Germany on Chinese sellers that had been avoiding back taxes for several years – one seller owed about $2.5 million. “Amazon froze their accounts,” he added. “It was very serious – they lost their business. So it’s very important, moving forward, to focus on being compliant.”

FBA work can add a long list of new services to the repertoire of a forwarder, Donald said. For instance, Corten now offers VAT registration in 28 countries, and also handles VAT returns. “So, forwarders can offer their customers a one-stop shop. They can sell direct to European markets and cut out the middleman,” he said.

Other potential services mentioned by Donald included offering FBA prep guidance, extra or seasonal warehouse storage for unexpected spikes in demand from Amazon customers, full returns management, including rebagging and repackaging of returns, last-mile delivery, FBA consolidation, minor repairs, quality control, bundling, emergency deliveries and many others.