Germany’s e-commerce market has more than 80 million potential customers. Yet still many Polish entrepreneurs stick only to Allegro. Why? They fear the language barrier, unfamiliarity with local platforms and lack of knowledge of how to go about it. Meanwhile, getting on Amazon.de, eBay or Kaufland.de is easier than it seems – and the sales potential is often several times greater than in Poland.
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German e-commerce market
The German e-commerce market is a leader in Europe – it is characterized by high dynamics, high competition and offers great opportunities for sellers. In 2023, the market was worth about 100 billion euros, and forecasts indicate that the market will continue its growth in the coming years. More than 80% of German Internet users regularly shop online, making Germany one of the world’s leading countries in terms of e-commerce.
Marketplaces in Germany are becoming increasingly popular, and consumers are eager to make purchases on these platforms. This makes the German e-commerce market one of the most important targets for Polish sellers and entrepreneurs from other countries who plan to expand internationally.
The most common challenges in trading with Germany
Before you decide to sell your products in Germany, it’s a good idea to be aware of the difficulties that may come your way. Here’s a look at the most common challenges faced by sellers trying to establish a presence in the German market.
1. language and cultural barrier
The German language is a natural barrier for many Polish entrepreneurs. Although a sizable portion of the population in Germany speaks English, customers prefer to shop in their native language. Inaccurate translation of product descriptions or inappropriate wording of an offer can result in misunderstanding and, consequently, loss of customers.
In addition, Germans have specific cultural expectations related to product quality, pricing and customer service. Users in Germany expect a very professional approach and reliable information about products. For this reason, it is advisable to hire translators who will be able to ensure that the language is correct and that the offer is adapted to German realities.
2. high quality requirements
Germany is famous for its attention to quality. The products you offer must meet high quality standards if you want to remain competitive in the German market. German consumers are very demanding and expect products to be durable, functional and as described.
3. understanding of German regulations
German e-commerce law is quite complex and requires sellers to follow the rules carefully. Special attention must be paid to data protection regulations (RODO), consumer rights (returns, warranties), and VAT regulations. Compliance with these regulations is crucial to avoid legal sanctions and loss of consumer confidence.
Tax issues can also be a challenge for Polish sellers, who must comply with VAT-OSS requirements and be aware that in Germany there are additional regulations regarding waste segregation and product recycling that must be taken into account.
4. market entry costs
The German e-commerce market, while attractive, comes with fairly high upfront costs. Sellers face marketplace registration fees, sales commissions, transportation, warehousing and returns handling costs. In order to achieve short delivery times, fulfillment often has to be used, and this also comes with additional costs. It’s also worth keeping in mind the costs associated with bid translation, marketing and advertising.
5. complexity of logistics and delivery
German consumers are accustomed to fast delivery, which poses challenges for retailers in other countries. Waiting times for packages cannot be long – customers in Germany expect ordered goods to arrive within 1-3 business days.
Achieving great success in the German e-commerce market without using a platform’s fulfillment service, such as Amazon FBA, is very difficult, as German consumers expect fast delivery, which can only be ensured by warehousing and fulfilling orders directly in Germany.
Legal and tax requirements in the German market
Below I outline the key legal and tax requirements you should consider when selling on German sales platforms such as Amazon, eBay, Kaufland, or Zalando.
1. consumer protection requirements
German e-commerce law is very pro-consumer, which means that German customers have a number of rights that you must follow when selling on the German marketplace. Here are some of the most important ones:
Right to return goods
The German legal system provides consumers with the right to return goods within 14 days of receiving an order, without giving a reason. Accordingly, retailers are required to incorporate this right into their return policies and adjust their logistics processes.
Terms of sale
All offers must be clear and understandable. You must ensure that your sales page includes information about prices, delivery costs, lead times, and return policies. Failure to comply with these regulations can lead to financial penalties.
Compliance with data protection regulations (RODO)
According to the EU’s Data Protection Regulation (RODO), retailers must ensure adequate protection of customers’ personal data. In Germany, the topic of data protection is particularly important, and retailers must meet requirements for processing personal data, storing it and protecting it from leakage. In addition, each user must consent to data processing before making a purchase.
2 VAT and tax requirements
Germany, as a member country of the European Union, applies a VAT system. Sellers need to be aware of several tax issues that are crucial in the context of cross-border sales within the EU.
VAT-OSS (One-Stop-Shop).
As of July 2021, VAT-OSS has been introduced, making it easier to sell goods and services within the EU. With VAT-OSS, sellers do not have to register for VAT in each country to which they send goods. Instead, they can report all their transactions in the EU market through a single portal, and then pay VAT in the country where the sale was made. It’s a system that significantly simplifies VAT administrative processes.
Sellers who sell to Germany from Poland should register with VAT-OSS and pay VAT to Germany according to the German VAT rate, which is 19% (the standard rate). However, it is worth remembering that there are exceptions for products at a reduced VAT rate (e.g., 7% VAT on books or certain foodstuffs).
VAT registration in Germany
According to German VAT regulations, storing goods in the country where they are offered for sale is considered “doing business” in that country. In such a case, the seller becomes a VAT payer in Germany and must register his activity for VAT purposes in that country.
Invoicing rules
In Germany, invoices must meet certain legal requirements. They should contain, among other things, the full name and address of the seller and buyer, the seller’s VAT number, the date of the invoice, and information on the VAT rate applied. German regulations require that invoices be issued electronically or on paper.
3. environmental protection and recycling regulations
The German legal system places particular emphasis on environmental regulations that vendors must comply with when offering their products on the German market. This primarily concerns regulations related to:
Recycling of packaging and waste
Retailers must register with Germany’s packaging waste management system in order to sell products in Germany. This means paying contributions to companies that collect, recycle and dispose of packaging waste. Lucid is one of the most important systems with which businesses must register to comply with Germany’s packaging waste recycling law. As part of the registration, sellers are required to pay contributions to recycling companies, which is necessary to legally sell goods on the German market.
Environmental taxes
Germany also has regulations on environmental fees, particularly for the sale of electronic products (such as household appliances and computer equipment), which are also subject to mandatory recycling. When such products are sold, sellers must be registered with the relevant electrical and electronic waste collection and recycling systems.
4 Claims and warranty requirements
German consumers have the right to complain about defective products for 2 years from the date of purchase, which is much longer than in many other countries. It is worth remembering that this right applies not only to new products, but also to used ones. You must be prepared to handle complaints, and offer a quality guarantee that complies with German regulations.
Marketplace platforms on the German market
Amazon DE
Amazon is the undisputed leader in the German e-commerce market, holding about 52% of the online sales market share. With its huge assortment, Prime program and reliable logistics, Amazon DE has won the trust of millions of consumers and has become the number one platform. Selling on German Amazon is an opportunity not only to reach local customers, but also to expand globally. With its international reach, sellers can easily diversify their revenue streams and expand their sales to markets around the world.
eBay DE
eBay DE is one of the oldest and largest online sales platforms in Germany, holding about 20% of the market share. Both new and used products are available on eBay, and the platform attracts customers looking for bargains and unique offers. Products such as car parts, automotive accessories and collectibles are among the best-selling categories. eBay offers an auction model, which gives sellers an advantage in selling unique and hard-to-find items. Selling on eBay can be a good complement for businesses offering niche products, but it comes with some challenges, such as initial limits on the number of items listed.
Kaufland DE
Kaufland, although in Poland it is mainly known for its hypermarket chains, has become a strong e-commerce player in Germany. The Kaufland DE platform, which has captured about 2-3% of the e-commerce market, stands out for its wide variety of products – from electronics to household goods and groceries. Kaufland DE is an excellent option for small and medium-sized sellers, as it offers favorable fees and transparent terms of cooperation. Although Kaufland still does not reach the level of Amazon in terms of available sales support tools, it is an interesting alternative for sellers looking to diversify their sales channels.
XXXLutz
XXXLutz is an e-commerce platform focused mainly on furniture and interior design. It is one of the leading players in the German and Austrian markets, enjoying great popularity among customers looking for quality products for decoration and interior design. For companies selling furniture, XXXLutz is an excellent opportunity to reach a wide audience. To join the platform, companies must meet the requirements for EU residence and VAT registration, as well as customer service in German.
Otto DE
Otto DE is one of Germany’s most important e-commerce platforms, with about 4% market share. It offers a wide range of products, from clothing to household goods, and works with more than 6,000 sellers. Registering on Otto requires meeting strict requirements, including having a German VAT number and providing customer service in German. Although it requires more paperwork than other marketplaces, Otto DE offers less competition, an attractive opportunity for companies that meet high quality standards.
Which German marketplace should I choose?
To start, the best choice would be Amazon DE, a market leader that attracts millions of customers every day. With its advanced advertising tools and FBA program, Amazon DE is an ideal platform to start selling in Germany. It’s also a great choice for starting international expansion.
If you have a company registered in Germany, the next step could be to sell on Otto DE, especially if your offerings include furniture, clothing or household goods. Otto is a platform that is trusted by German consumers and gives you the opportunity to sell to a more exclusive market.
After gaining experience on Amazon, eBay DE is worth considering if your products fit the characteristics of this platform, especially in niche categories. If you want to diversify your sales in the German market, Kaufland should be your next step. On the other hand, further expansion should already be planned for other markets, such as France (Amazon.fr, Cdiscount), the Netherlands (Bol.com), Italy (Amazon.it) and Spain (Amazon.es), which offer huge sales potential and allow additional opportunities.
Summary
The German e-commerce market is a huge opportunity for Polish companies that want to sell more and build a stable income. It is a demanding market, but with the right approach – very profitable. If you don’t know where to start or lack the time to figure it out on your own – contact us. At a free consultation we will check if your product has potential in Germany and show you how we can help.
