This article is based on a presentation I had the pleasure to give for the Economic Development Agency of Estonia in November 2020. It is the second of 2 parts and will show you the operational impacts. See the first article “How to plan all important key factors” to get an insight into German peculiarities accompanied by some important basic facts.
One of the first decisions you have to make is which online sales channel you want to sell through in Germany. It could be helpful to ask yourself some questions about your assortment:
- Which part of the assortment should be offered in Germany (on which channel)?, should there be product groups or services only for Germany?
- Or NOT for Germany?
- Are your IT systems capable of delivering country-specific product ranges?
- Are your IT systems capable of delivering language-specific product descriptions?
Independent of the sales channel you must register for sales tax in Germany if:
- You store your goods in Germany
– or –
- You sell goods to consumers (not B2B) based in Germany and Your turnover exceeds the delivery threshold of 100,000 € for cross-border distance selling in Germany
For every country in the EU the threshold above which one must register is different. The official website of the European Commission has all informations you need to know about taxes and VAT registration. See informations about cross-border VAT here.
How to Set your Tax Configurations in your Online Store
Lets see some examples of how to configure tax rules in your shop backend, for example Shopify and Shopware. Both shop systems offer a lot of configuration options which are easy to handle.
The handling with Shopware it is quite similar to this with Shopify. It is a litte bit different in the Shopware backend – lets say it is designed a little more clearly and gives you a better overview.
Business Location In Germany
Sooner or later, depending on the size and growth of your online business in Germany, you will ask yourself the question if you want to supply from your country or set up logistics center in Germany.
With a local logistics branch (or partner) you can:
- significantly shorten delivery times
- offer free shipping products
- reduce costs for returns.
Make yourself familiar with the local shipping conditions, address formats and general terms and conditions of transport companies. Your customers want error-free and fast delivery.
You don’t have to set up a company branch right away. To get started, work with German logistic partners who can help you get started. This will also make it easier for you to gain experience and gradually expand your business.
What logistic partners offer:
- fulfillment, logistics
- customs, returns
- marketplaces, APIs
- customer service
- ask for more services
Another or additional way to set up your online business in Germany is to work with specialized agencies. They can help you to launch your business by taking on all the work that does not make up your core competency.
What agencies can do for you:
- E-Residency Application and Establishment of company
- Virtual office & contact person services
- VAT registrations and Virtual Accounting
- Amazon account creation or conversion
- Customer Care
- ask for more …
Lets take a look at your e-commerce system landscape. If you want to expand your business for international online trade you will have to take a close look at all parts of it and check your requierements.
Especially if you do direct-to-consumer business, you will realize that you will have to extend nearly all parts of your e-commerce system landscape.
Lets now take a look at your online sales channels. Lets see what chellanges your have for each channel and what you can do to make life easier for yourself. The first step to be successful.
- New markets mean new target groups
- New sales channel(s)
- New marketing channels
- German tax-ID required for some marketplaces (e.g. www.otto.de)
- VAT-registration (see above)
- German language
Entry Into New Markets
Some marketplaces offer special programs for starting new businesses, e.g. „Local Heroes“ by Ebay (deferral of payment for sales fees, a premium store for six months free of charge, etc.) Another program is „quickstart-online.de“ by Amazon. It is a knowledge base portal for digitals (in German)
With Amazon you get a relatively easy start to sell abroad.
- just add more target marketplace sites
- low risk and the possibility to establish a second mainstay
- easy to manage your Amazon-account (by yourself or agency)
- VAT-registrations in the EU are not really a barrier
- make a decision: vendor or seller, FBA or FBM?
- probably you need to customize your product data-structure (difference in taxonomies, particular product data models in each Amazon country), e.g. HS-Code for Germany
- take an eye on product listings (e.g. with Amazon keyword research tool)
- Are you thinking about a local office in Germany or a logistic partner or an agency? Or do you want to just start to export to Germany? (
- Don´t worry, you can manage everything later if you start with a small business.
With Amazon you get a (relatively) easy start to sell abroad.
What did I mean as I adviced you to keep an eye on product listings? Amazon is not only by far the most important marketplace for Germany, it is also the most important search engine for product search. But as a small company or brand, it is difficult to get a good ranking for products in the Amazon listings. Even if customers search for your company name or product names, you are lucky, if they can find you on the first page.
Your options on this topic is to work your way into this subject or ask for support from a specialized agency.
Your own Onlineshop or Website
What implementations does an expansion of your online trading to Germany have? Lets take a rough overview on the most important changes:
Get consent from users
- use a consent manager (seriously)
- use double opt-in consent where it is required
Create entire legal pages
- right of withdrawal
- terms and conditions
- article descriptions in German
- Implementing a certificate is technically very simple
- Use reviews for your shop and your products (Germans trust online reviews)
- Communicate in German with your German customers – along the whole customer journey (including customere care und support)!
- use accustomed payment methods
- use PSP (payment service providers) that are well established on the german market (for you need a German company adress)
- Customer consent means less data, less accurate analysis
- End of cookies: Think about alternative methods of accessing important analysis data.
- Take advantage of a native speaker for the German market, especially for SEO and Google Ads.
- Or engage an agency with international experience and native speakers for the German market.
Legally compliant selling in Germany
Selling to Germany from another EU country is not very different to selling to other EU countries. Besides the particularities just mentioned.
And there are a few more things you should consider. Germans take the GDPR very serious and have a strict interpretation of it (it is called DSGVO in German). For example the label of the “buy”-button is regulated by law.
If you are not shure about legal topics and don´t want to hire a lawyer, you could enter into a partnership with the German Händlerbund. For a a monthly membership fee they give you support on trust building solutions, legally compliant selling and assistance with written warnings. They also have a own customer review system.
There are some challenges, no matter which sales channels you use:
- Is your online shop system ready for international rollout (e.g. new subshop)?
- different assortments
- specific prices
- additional tax rules (VAT)
- multi-client capability
- legal compliance
- Can your product information management system (PIM) enrich and modulate article data and deliver different formats and language versions?
- Start with a MVP (minimal viable product)
- track, measure and analyze all data from the beginning
- use A/B-testing
- -> start with basic shop/channel and constantly improve!
- Don´t wait: Shop systems are reasonably priced and are delivered with sufficient basic functions.
- Creativity before capital!
There are some things to consider before entering the German market. But everything is solvable and feasible, especially within the EU. So don’t waste time and start to conquer the German market!
If you have any questions regarding the online market entry in Germany, please do not hesitate to contact me.