by Renee

4 min reading time

Amazon Call-Off Stock: what is it?

earnings

CALL OFF STOCK

Call-Off Stock: Perhaps Amazon has also emailed you asking if you would like to join the program. But what exactly is it and how does it work? In this piece, we explain.

What is Call-Off Stock (COS)?


The European Union has established rules for business owners who have their stock stored abroad. How that stock is handled can be divided into two categories:
Consignment Stock
and
Call-Off Stock
.

Call-Off Stock involves sending goods to a buyer who is already known. The goods are stored there so that they can then be “called off” (= the “Call-Off”) when it is ordered by a customer. This is a movement of goods and is considered an intra-community supply in the country where the goods leave. In the country of arrival, it is considered an acquisition. The goods you keep as stock for when they are called up are subject to the VAT rules of the departure country. That means (often) you don’t need VAT registration.

Consignment Stock refers to the stock you ship to your own warehouse space: if this is abroad, then you need a VAT registration for this in that country. This is often the case for sellers using Amazon FBA!

What does Call-Off Stock specifically mean for Amazon?

With
Call-Off Stock
allows you to store stock in a country belonging to the PAN-European FBA program without needing VAT registration in that country. This is possible because VAT laws in Europe have become simpler: now these types of transactions are allowed to take place as long as certain requirements are met. These are the following:

  • You need to know who the intended recipient is, who will eventually take over your (stored under COS) stock;
  • You must abide by the VAT obligations of the country in which your business is registered (and from which the goods are shipped);
  • Unsold stock? That must be returned to the original country of shipment within 12 months;
  • You may not have a Place Of Establishment (POE) in a country that is electable for COS.

Amazon meets all these requirements. Amazon does that by buying your inventory and reselling it to the end customer when they make a purchase. If you join Amazon’s COS program, you retain ownership of your products as long as they move within Amazon’s fulfillment centers (which you have selected).

When a product enters a COS-selected country, customers see that the product is “shipped and sold” by Amazon. When a customer buys such an item, Amazon buys it from you first. This transaction is a B2B cross-border transaction. Then Amazon sells it on to the customer. All stock moves made in this way are also managed by Amazon. That includes moving unsold inventory back to the country of shipment (before the 12-month period is up).

What are the benefits of Call-Off Stock?

  • By joining the COS program, your business can grow faster through flexible storage. Currently, this can be done in France and Spain, but other countries will follow in 2023.
  • By choosing COS, you can save on fulfillment costs. This is because you only pay the local fulfillment fees for orders from that marketplace.
  • Your products enjoy PAN-European FBA benefits, such as the Prime logo and fast delivery (in the COS country).

What are the disadvantages of Call-Off Stock?

  • You cannot control how much of your stock is stored in a COS country. In fact, you authorize Amazon to move your stock when you join the program.
  • You lose control of the stock in question for a year. Is your stock not sold after 12 months? Then it is sent back to the country it came from.

Are there any additional requirements I need to meet?

In addition to your “normal” VAT obligations, you must also file your “Declaration of Intra-Community Supplies” (EC Sales Lists, ESL) with the tax authorities of the country from which you are shipping the goods. Do you have stock lying around in multiple countries? If so, you probably already do.

How can I participate?

You will have to register first. As an Amazon seller, you have received an email from Amazon, asking you to participate in the Call-Off Stock program! You are eligible for COS as:

  • You are an active seller on all marketplaces:
    amazon.de, amazon.fr, amazon.it
    and
    amazon.es;
  • You have a verified German VAT number associated with your Amazon Seller account;
  • You are enrolled in Amazon’s VAT Calculation Services (VCS) so Amazon can create invoices;
  • You do not have a place of establishment in a COS country (place of establishment, POE).
  • You have COS-eligible products available on all marketplaces.

Good to know: you can only listen non-commingled products. Currently, Amazon does not accept products in the COS program that use the manufacturer’s barcode (commingled products). However, you can convert them to an Amazon barcode (non-commingled products) in Seller Central.

Finally, if you have some of your stock in Germany, Amazon will make sure it gets to the COS countries you selected.

A few final questions…

Can I see how much stock is left, and where it is?

Yes, you certainly can. You continue to own the stock until Amazon takes over from you. Until then, you can use Seller central to see the location, performance and age of the stock. After you sign up for COS, Amazon will move stock to a country you select, though.

Can I control how much of my inventory is stored in COS countries?

No, you can’t. Choosing the COS program, also means you authorize Amazon to move your stock (at no extra cost, of course). You can’t choose how much of your stock gets moved.

How do COS orders show up in Seller Central?

As a B2B order to the seller: Amazon that is!

Don’t come out anyway?

Give us a call or schedule a (free) consultation, and we’ll take a look at your situation!

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Yonis Brander

VAT consultant

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