EFN vs. Pan-European FBA vs. Multi-Country Inventory: Which Strategy Is Right for You?
You're selling on Amazon Germany and things are going well. You want to expand to France, Italy, Spain. But Amazon gives you three different ways to do it: EFN, Pan-European FBA, and Multi-Country Inventory. They all sound similar. They all move your products around Europe. But the costs, VAT implications, and delivery speeds are dramatically different.
I'm going to explain each one plainly, compare them side by side, and help you decide which makes sense for your situation.
EFN (European Fulfillment Network): The Easy Start
EFN is what most sellers start with, and it's the simplest option. You ship your inventory to one country (usually Germany), and Amazon fulfills orders from other European marketplaces from that same warehouse.
So if a French customer buys your product on amazon.fr, Amazon ships it from the German fulfillment center across the border to France.
Pros:
Only one inventory pool to manage. You ship everything to one country. You only need VAT registration in the country where your inventory is stored (e.g., Germany). Simplest logistics and lowest administrative overhead. Good for testing new marketplaces with minimal commitment.
Cons:
Cross-border fulfillment fees are higher. When Amazon ships from Germany to France, you pay an EFN cross-border fee on top of the regular FBA fee. This can add €1-4 per unit depending on size and destination. Longer delivery times for customers in other countries (2-5 days instead of 1-2 days for local fulfillment). You may lose the Prime badge in some remote destinations or the delivery estimate may be longer, reducing conversion rates. No local inventory advantage — products shipped cross-border are less competitive on delivery speed.
EFN fees: Regular FBA fulfillment fee + cross-border surcharge. For a standard 400g product: domestic fee ~€3.00, cross-border to another EU country: ~€4.50-6.00 total. That €1.50-3.00 difference eats directly into your margin on cross-border sales.
Pan-European FBA: The Full Commitment
With Pan-European FBA, you send your inventory to Amazon, and they distribute it across fulfillment centers in multiple countries automatically. Amazon decides where to store your products based on predicted demand in each country.
If Amazon predicts 100 sales in France, 50 in Italy, and 200 in Germany, they'll move inventory to warehouses in all three countries. When a French customer orders, the product ships from a French warehouse — fast, local delivery.
Pros:
Fastest delivery to customers across Europe — local fulfillment in each country. No cross-border fees — you pay the same FBA rate as local sellers in each country. Higher conversion rates because of faster delivery estimates and reliable Prime delivery. Amazon handles all the inventory distribution logistics automatically.
Cons:
You need VAT registration in every country where Amazon stores your inventory. In practice, this means Germany, France, Italy, Spain, Poland, and Czech Republic at minimum. That's 6+ VAT registrations, each with quarterly or monthly filing requirements. Cost: €50-150/month per country through a VAT service, so potentially €300-900/month in VAT compliance costs alone. You lose control over where your inventory sits. Amazon might put 30% of your stock in Poland even if you sell almost nothing there. If a marketplace underperforms, your inventory is spread thin and hard to recall. Product compliance must be met in every country where inventory is stored (EPR registrations, packaging compliance, etc.).
Pan-EU fees: Same as local FBA fees in each country. A 400g product on .de: ~€3.00. On .fr: ~€3.10. On .it: ~€3.05. No cross-border surcharges. But you need to factor in the additional VAT compliance costs per country.
Multi-Country Inventory (MCI): The Middle Ground
MCI gives you more control than Pan-European FBA while still enabling local fulfillment. Instead of Amazon automatically distributing your inventory, you choose which countries to send stock to and how much.
You create separate FBA shipments for each country. Ship 200 units to Germany, 100 to France, 50 to Italy. Each shipment goes to that country's fulfillment network, and orders are fulfilled locally.
Pros:
You control where inventory goes. No surprises about stock ending up in Poland when you don't sell there. Local fulfillment in the countries you choose, so same delivery speed benefits as Pan-EU. You only need VAT registration in countries where you actively send inventory — which you chose, not Amazon. Can be more cost-effective than Pan-EU if you only want to cover 2-3 countries instead of all of them.
Cons:
More logistics work — you're managing separate shipments to each country. You need to forecast demand per country and allocate inventory accordingly. If you understock in France and overstock in Germany, you miss sales in France while paying storage in Germany. Still requires VAT registration in each country where you hold inventory. Doesn't scale as smoothly as Pan-EU for sellers operating in 4+ countries.
MCI fees: Same as local FBA fees (identical to Pan-EU). The cost difference vs. Pan-EU is in logistics (separate shipments) and administration (you manage distribution), not in per-unit fees.
Head-to-Head Comparison
Let's compare all three for a seller doing 500 units/month across Germany, France, and Italy, with a standard 400g product:
EFN:
Inventory in: Germany only
VAT registrations: 1 (Germany)
FBA cost per unit (domestic .de): ~€3.00
FBA cost per unit (cross-border .fr, .it): ~€5.00 avg
If 60% domestic, 40% cross-border: weighted average ~€3.80/unit
Monthly VAT compliance cost: ~€50-100
Delivery speed to FR/IT: 3-5 days
Pan-European FBA:
Inventory in: DE, FR, IT, ES, PL, CZ (Amazon decides)
VAT registrations: 6+
FBA cost per unit: ~€3.05 avg (all local)
Monthly VAT compliance cost: ~€400-600
Delivery speed: 1-2 days everywhere
MCI (DE + FR + IT):
Inventory in: Germany, France, Italy (you choose)
VAT registrations: 3
FBA cost per unit: ~€3.05 avg (all local)
Monthly VAT compliance cost: ~€200-350
Delivery speed: 1-2 days in DE/FR/IT, 3-5 days elsewhere
The math: On 500 units/month, EFN saves you ~€350/month in VAT compliance but costs ~€375/month extra in cross-border fees (200 cross-border units × ~€1.90 surcharge). Roughly break-even at this volume. Pan-EU has the lowest fulfillment costs but highest compliance costs. MCI splits the difference.
Decision Framework: Which One Should You Choose?
Choose EFN if:
You're just starting to sell in Europe. You sell fewer than 200 units/month across all marketplaces. You want to test cross-border demand before committing to VAT registrations. Your products are lightweight (cross-border surcharges are lower for smaller items). You value simplicity over optimization.
Choose Pan-European FBA if:
You sell 500+ units/month across multiple EU marketplaces. Delivery speed is critical for your category (customers in Fashion or Electronics expect fast delivery). You already have multi-country VAT registrations. Your margins are healthy enough to absorb €400-600/month in VAT compliance. You want maximum sales velocity and Buy Box competitiveness across all EU marketplaces.
Choose MCI if:
You sell 300-500 units/month and want to optimize 2-3 specific countries. You know exactly which marketplaces drive your sales (e.g., 70% Germany, 20% France, 10% Italy). You want local fulfillment speed without giving Amazon full control of your inventory. You're comfortable managing separate shipments and demand forecasting.
VAT Implications: The Hidden Cost of Multi-Country Fulfillment
This is where most comparison articles fall short. The per-unit fulfillment fees are only part of the story. VAT registration and compliance is a recurring cost that dramatically affects which strategy makes financial sense.
With EFN: you need VAT registration in one country (where your stock is stored). If that's Germany, you register once, file monthly or quarterly, and you're done. Cost: €50-100/month through a VAT service, or free if you handle filings yourself with basic accounting software.
With Pan-European FBA: Amazon can store inventory in Germany, France, Italy, Spain, Poland, and Czech Republic. Each country where inventory is stored triggers a VAT registration obligation. That's potentially 6 countries × €50-150/month for VAT service = €300-900/month in compliance costs alone. For a seller doing €5,000/month in revenue, that's 6-18% of revenue eaten by VAT compliance before you've counted any other cost.
With MCI: you choose which countries get inventory, so you choose how many VAT registrations you need. Want to be in Germany and France only? Two VAT registrations. Add Italy? Three. You control the compliance cost.
This is why MCI is often the smartest middle ground: you get local fulfillment speed in your top 2-3 countries without being forced into VAT obligations for countries where Amazon randomly parks your inventory.
Real Numbers: When Does Pan-EU Pay Off?
Let's model this. A seller with 300 cross-border orders/month on EFN, paying an average €2.00 surcharge per cross-border order:
EFN cross-border cost: 300 × €2.00 = €600/month
EFN VAT compliance (1 country): €80/month
EFN total: €680/month
Pan-EU (same 300 orders, now all local):
FBA fee savings: 300 × €2.00 = €600/month saved
Pan-EU VAT compliance (6 countries): €500/month
Pan-EU total: €500/month
Net savings from Pan-EU: €180/month. Plus the conversion rate improvement from faster delivery, which is harder to quantify but real. At this volume, Pan-EU makes sense.
But at 100 cross-border orders/month:
EFN cost: 100 × €2.00 + €80 = €280/month
Pan-EU cost: €0 surcharges + €500 = €500/month
At lower volumes, EFN is significantly cheaper. The crossover point is typically around 200-250 cross-border orders/month, depending on average surcharge and VAT compliance costs.
The Practical Path: Start EFN, Upgrade Later
Most successful sellers follow this progression:
Month 1-3: Start with EFN. Ship everything to Germany. List on .fr, .it, .es. See which marketplaces generate organic sales. Track cross-border fees and lost sales from slower delivery.
Month 4-6: If France and Italy are generating consistent sales, register for VAT in those countries and switch to MCI for those specific marketplaces. Keep EFN for countries with low volume (Spain, Netherlands, etc.).
Month 6+: If you're selling heavily across 4+ countries and your margins support the VAT costs, consider Pan-European FBA. The automation and delivery speed benefits start outweighing the compliance costs at scale.
Don't jump straight to Pan-EU before you know which marketplaces actually work for your products. Some sellers discover that 90% of their European revenue comes from Germany alone, and the hassle of multi-country compliance isn't worth the extra 10%. Others find that France and Italy contribute 40% of revenue and the cross-border fees are killing their margins. Let the data guide the decision.
One important note: whichever strategy you choose, make sure your product compliance (GPSR, EPR, CE marking) is sorted for every country where you sell or store inventory. Amazon holding your stock in Poland means you need Polish EPR registration even if you rarely sell there.
Frequently Asked Questions
What is the difference between EFN and Pan-European FBA?
EFN (European Fulfillment Network) keeps your inventory in one country and ships cross-border to other EU customers, charging an extra EUR 0.25-4.00 per cross-border order. Pan-European FBA distributes your inventory across Amazon warehouses in multiple EU countries for faster delivery and lower per-unit fees, but requires VAT registration in each country where stock is stored.
How many VAT registrations do I need for Pan-European FBA?
Pan-European FBA can distribute inventory to up to 7 countries: Germany, France, Italy, Spain, Poland, Czech Republic, and the Netherlands. You need VAT registration in each country where Amazon stores your products. Most sellers start with 3-4 VAT registrations and expand later. VAT registration costs EUR 300-600 per country through an agent.
Is EFN or Pan-European FBA cheaper?
EFN is cheaper to start (no extra VAT registrations, single country storage), but Pan-EU has lower per-unit fulfillment fees and higher conversion rates due to faster delivery. Pan-EU typically becomes more profitable when you sell 1,500+ units per month across EU marketplaces. For new sellers doing under 500 units/month, EFN is the practical choice.
Do I get Prime badge with EFN?
Yes, EFN orders are eligible for Prime in all EU marketplaces. However, delivery times are longer for cross-border EFN orders (3-5 days) compared to Pan-EU (1-2 days). Faster delivery through Pan-EU improves conversion rates by 10-20% on average, which often outweighs the additional VAT compliance costs.
When should I switch from EFN to Pan-European FBA?
Switch to Pan-EU when you consistently sell 1,500+ units per month across EU marketplaces, and when the savings on fulfillment fees (EUR 0.25-4.00 per cross-border order) exceed the cost of additional VAT registrations and monthly filings (EUR 200-400/month per country). Most sellers make the switch after 6-12 months on EFN.
What is Multi-Country Inventory (MCI)?
MCI lets you manually choose which countries to store inventory in, giving you more control than Pan-EU (which automatically distributes stock). MCI is useful if you want to target specific high-volume marketplaces without distributing to all countries. You still need VAT registration in each storage country, but you control the allocation.