Selling in Europe: Germany

Increasing your reach

In a previous blog entry we discussed the 10 Largest European E-Commerce Markets. The figures showed that the Netherlands makes up just a small share of the total revenue of the European e-commerce market. The United Kingdom, France, and Germany have numbers that are a lot more interesting. That’s why it’s important for your online retail business to consider going international. Germany with its population of 81 million is an interesting place to start. Not to mention the consumers from other German-speaking countries, such as Switzerland and Austria, who also often visit German online shops and marketplaces. This would give you access to as many as 100 million potential customers!

In this blog we will share tips about expanding your business to Germany, including things to consider and the various laws and regulations that you’ll have to deal with.

Your own shopping site or an online marketplace?

Setting up a shopping website in another country is often not as simple as you might hope. When you want to launch a German version of your online shop and register a domain name with the German .de extension, you have to realise that you need a person or company in Germany authorised to sign on your behalf. This person or company must have a valid address in Germany and be known to the Deutsches Network Information Centre (DENIC). DENIC will then grant your shopping website access to the German net.

Another option is to stick to your existing domain extension and just add a German translation to your website, but research has shown that German consumers are more likely to trust a shopping website with a .de registration than a site with a foreign domain extension. 

A faster way to increase your reach abroad is to sell through online marketplaces. In Germany such marketplaces are immensely popular. Examples are Amazon.de and real.de, both highly thought of by German consumers. Research has shown that Germans looking for a product are twice as likely to start their search on.de than on Google.

Most of the marketing efforts are already taken care of by the marketplace, but German consumers are not easily impressed by discounts. They assign more value to brand recognition and trust. In order to hook German customers, you will have to make sure you’ve gathered plenty of (positive) reviews, and that you make the buy box on the marketplace in question. The costs for selling through marketplaces are relatively low; you only pay a small fee for each transaction. If you don’t sell anything, you don’t pay. Be aware that there are some marketplaces that do charge monthly fees.

Selling through marketplaces in Germany: what you need to know

When you’ve decided to offer your products on German online marketplaces, there are a number of things you have to consider.

1. VAT number: when shipping goods to Germany, you generally have to pay VAT in Germany. Be sure to apply for a German VAT number well in advance to avoid any troubl
2. Properly translated content: naturally you should supply German marketplaces with German product information. Make sure your content has been translated properly, preferably by a translation agency since German consumers read product information more carefully than Dutch consumers, for instance.
3. German packaging laws: the so-called Verpackungs Gesetz or VerpackG says that everyone who sends packaging containing goods to Germany has to pay a license fee. If you don’t comply with this regulation, you risk a fine of up to €20,000.

Do your own shipping or Fulfilment?

If your business is located in the Netherlands, it might seem an obvious choice to ship your products from the Netherlands. But is that really the most efficient solution? 

Say you choose to ship your product from the Netherlands because it seems to be the cheaper option. It’s true that generally DHL or PostNL can offer reasonable prices for international shipping, but many businesses forget the costs that will come on top of that:

1. Renting a warehouse to store your products
2. Staffing
3. Utilities
4. Insurance/alarm system
5. Purchase and maintenance of equipment and such
6. Handling each individual return.

In addition to money, this will also eat up a lot of your time. Time better spent on smart purchasing choices and conducting market research, for example. For more tips on logistics, check out our white paper: 3 Tips for Smart Logistics Choices.