Selling your consumer products online in Germany

Germany is a interesting market

We think Germany is an interesting market for selling your retail products for several reasons:

1. Large and growing market: Germany is the largest economy in Europe and has a population of over 83 million people. The country has a strong and growing e-commerce sector, with a market value of over €100 billion in 2022 and projected growth in the coming years.
2. High purchasing power: Germany has one of the highest levels of purchasing power in Europe, with a per capita disposable income of €35,000 in 2022. This makes it an attractive market for businesses selling high-value or luxury products.
3. Strong infrastructure: Germany has a well-developed logistics and transportation infrastructure, with a reliable postal and delivery system. This makes it easier for businesses to ship products to customers across the country.
4. Tech-savvy consumers: German consumers are tech-savvy and have a high level of digital adoption. This makes them more likely to shop online and use e-commerce platforms, providing businesses with a large and diverse customer base.
5. Access to other European markets: Germany is located in the center of Europe, providing businesses with access to other European markets. This makes it an attractive location for businesses looking to expand their presence in Europe.

But there are more companies who think the same. This means that Germany can also be a very competitive market.

Two ways of selling your products online

In general, there are two ways if you want to sell your products online in this market:

1. Through an open platform like Amazon, Ebay or Otto where you can set up your own shop
2. Through a (specialised) online distributor, who will buy your products and sell them on its website.

Selling on a platform like Amazon involves listing your products on that marketplace, which allows you to reach a large number of potential customers who are already shopping on the platform. As a seller on Amazon or other platforms, you are responsible for managing your inventory, shipping products to customers, and providing customer service. The platform charges fees for its services, including a referral fee and a fulfilment fee if you choose to use the platform’s fulfilment services.

On the other hand, selling through an online distributor involves partnering with a company that specialises in distributing products to retailers or other sellers. The distributor will take care of the logistics of getting your products to retailers or other customers, such as warehousing, shipping, and handling returns. In exchange for their services, distributors typically charge a fee or take a percentage of the sales.

Benefits and fees of open platforms

There are several popular e-commerce platforms in Germany where businesses can sell their products as professional users. Here are some of the main platforms and their turnover and reach:

1. Amazon.de: Amazon is a major player in the German e-commerce market, with a large and diverse customer base. The platform offers businesses the opportunity to sell products as professional users, and it has a turnover of over 30 billion Euro in Germany in 2022.
2. eBay.de: eBay is a popular online marketplace in Germany, particularly for second-hand goods. The platform offers businesses the opportunity to sell products as professional users, and it has a turnover of around 1 billion Euro in Germany in 2022.
3. Zalando.de: Zalando is a leading fashion e-commerce platform in Germany, with a large and loyal customer base. The platform offers businesses the opportunity to sell products as professional users, and it has a turnover between 2 and 3 billion Euro in Germany.
4. Otto.de: Otto is one of the largest e-commerce companies in Germany, offering a wide range of products, including fashion, home goods, electronics, and more. The platform offers businesses the opportunity to sell products as professional users, and it has a turnover of almost 10 billion Euro in Germany in 2022.

The fees that businesses pay to sell on each of these e-commerce platforms in Germany can vary depending on several factors, such as the product category, sales volume, and pricing strategy.

1. Amazon.de: Amazon charges several types of fees for selling on its platform, including a referral fee based on the product category, a fulfillment fee if using Amazon’s fulfillment services, and a monthly subscription fee for Professional Selling plans. The referral fee can range from 6% to 45% of the item price, depending on the category, and the fulfillment fee can range from €0.30 to €8.26 per item, depending on the size and weight.
2. eBay.de: eBay charges several types of fees for selling on its platform, including an insertion fee for listing an item, a final value fee based on the item price and shipping costs, and a fee for optional features, such as highlighting or bolding the listing. The insertion fee can range from €0.10 to €2.00 per listing, depending on the starting price, and the final value fee can range from 4% to 12% of the total amount of the sale.
3. Zalando.de: Zalando charges a commission fee for each item sold on its platform, ranging from 10% to 35% of the item price, depending on the category and brand. Additionally, businesses may be charged a marketing fee for participating in certain promotional campaigns or features on the platform.
4. Otto.de: Otto charges a commission fee for each item sold on its platform, ranging from 10% to 20% of the item price, depending on the category. Additionally, businesses may be charged a fixed fee for each item returned by a customer.

Online distributors

There are numerous online distributors in Germany that sell multiple brands and could possibly also include your products. This is a selection of the bigger websites:

1. Notebooksbilliger.de – Notebooksbilliger is an online retailer in Germany specializing in electronics and computers. It has over 4 million active customers and generated revenue of €1.4 billion in 2020.
2. Cyberport.de – Cyberport is an online retailer in Germany specializing in electronics and computers. It has over 3 million active customers and generated revenue of €1.4 billion in 2020.
3. Flaconi.de – Flaconi is an online retailer in Germany specializing in cosmetics and fragrances. It has over 1 million active customers and generated revenue of €200 million in 2020.
4. windeln.de – Windeln.de is an online retailer in Germany specializing in baby products, including diapers, clothing, and toys. It has over 1 million active customers and generated revenue of €232 million in 2020.
5. myToys.de – myToys is an online retailer in Germany specializing in toys and children’s products. It has over 2 million active customers and generated revenue of €500 million in 2020.
6. Westwing.de – Westwing is an online retailer in Germany specializing in home decor and furniture. It has over 1 million active customers and generated revenue of €312 million in 2020.
7. bonprix.de – bonprix is an online retailer in Germany specializing in fashion and clothing. It has over 35 million active customers across Europe and generated revenue of €2.3 billion in 2020.
8. medpex.de – medpex is an online retailer in Germany specializing in health and wellness products, including medication, vitamins, and beauty products. It has over 5 million active customers and generated revenue of €476 million in 2020.
9. reBuy.de – reBuy is an online retailer in Germany specializing in used electronics, media, and games. It has over 10 million registered users and generated revenue of €229 million in 2020.
10. EMP.de – EMP is an online retailer in Germany specializing in music, fashion, and merchandise for fans of rock, metal, and alternative culture. It has over 6 million active customers and generated revenue of €236 million in 2020.

Being online does not guarantee sales

While having an online presence can provide businesses with many benefits, such as increased visibility, the ability to reach new audiences, and cost savings, it does not guarantee sales. There are several reasons why being online does not guarantee sales:

1. Competition: The online marketplace is highly competitive, and businesses need to differentiate themselves from their competitors to stand out. This can be challenging, particularly in crowded marketplaces.
2. Marketing: Just having a website or online store is not enough to drive sales. Businesses need to invest in marketing and advertising to reach potential customers and drive traffic to their website.
3. Trust: Building trust with customers is critical for online sales. Customers need to feel confident that they are purchasing from a reputable and trustworthy business. This can be particularly challenging for new or lesser-known businesses.
4. Logistics: Fulfilment, shipping, and returns are critical components of the online shopping experience. If a business does not have a reliable and efficient process for these tasks, it can negatively impact the customer experience and sales.

Especially when introducing a product to a market marketing is needed. On open platforms like Amazon or Rakuten you can advertise or push your products, and invest in it directly. In our experience, in the beginning these marketing expenses may easily outweigh the revenue. Only when customers are returning the margins are moving to positive.

When working with an online distributor, that company may either ask for a low sales price, or for your involvement in the marketing. Having your social media accounts up and running, co-financing advertisement or doing (sampling) events can be important requirements to displaying your products.

The best strategy for selecting an open platform

From our experience, if you want to select an open platform in Germany for selling your products, we recommend to keep the following in mind:

1. Consider the product category: Different platforms may specialize in different product categories, so it’s important to choose a platform that aligns with your product offerings. For example, if you sell fashion products, Zalando or Otto may be a better fit than Amazon or eBay.
2. Consider the ease of working with the platform. We see big differences in the user interface of the back end, where you need to upload your product descriptions and in connecting it with your bookkeeping and stock management system.
3. Analyze the target audience: Different platforms may have different customer demographics and purchasing behaviors, so it’s important to choose a platform that aligns with your target audience. For example, if you sell high-end luxury products, Amazon or eBay may not be the best fit as they are more known for low-priced products.
4. Evaluate the fees: Each platform has its own fee structure, so it’s important to evaluate the fees and determine which platform offers the most cost-effective solution for your business.
5. Review the competition: It’s important to review the competition on each platform and determine whether your products can stand out and compete effectively against similar offerings.
6. Assess the platform’s support and resources: Different platforms offer different levels of support and resources for businesses. It’s important to choose a platform that offers the necessary tools and resources to help your business succeed.
7. Consider the platform’s reputation: The reputation of the platform can impact customer trust and willingness to purchase. It’s important to choose a platform that has a good reputation and is trusted by customers.

If you have the time and money for it, it may also be beneficial to test multiple platforms to determine which one offers the most effective solution for your business.

The best strategy work with an online distributor

Getting your products listed with an online distributor requires a well-planned strategy to increase your chances of success. We advise to do the following:

1. Conduct research to find the best fitting online distributor for your products. Consider factors such as the distributor’s target audience, product category, and pricing.
2. Ensure your products meet the distributor’s requirements: Each distributor has specific requirements for the products they list on their platform. Ensure that your products meet the distributor’s requirements in terms of quality, safety, and packaging.
3. Decide what product you want to replace. Even an online distributor can only show and keep in stock a limited number of items. If you want to be one of the top items to be displayed, what other brand or product should go down? And how would the website make more money from your product?
4. Price your products competitively: Set competitive prices for your products to attract customers and increase your chances of making sales. Consider the prices of similar products on the distributor’s platform and adjust your prices accordingly.
5. Promote your products: To increase the visibility of your products, consider promoting them through online advertising, social media, and other marketing channels. This can help attract more customers and increase sales. If you are willing to refer to the online distributor’s website, this may be an argument for him to list your products.

The process is not so different from getting your products listed with an offline distributor. The main advantage for online is that you can occupy places in the ‘long tail’, products that in one city are not enough in demand to have them in a shop, but overall in a country have enough demand to offer them online. If you then help with the promotion and in the beginning offer to put part of your stock in consignment with the distributor, chances are higher to get listed.