Maximize Profits by Expanding to European Amazon Marketplaces

As sellers ourselves, we understand the constant challenge of growing profit in a competitive marketplace. At the profit move. we've successfully expanded our own portfolio brands at Alloi-Brands, and we’ve seen a remarkable trend: 50% of our profit comes from Europe. Since 2018, we're launching on both marketplaces, and the results have been extraordinary. By leveraging our own experience, we now help other private label sellers achieve the same kind of explosive profit growth by expanding into the European market.

But why does expanding into Europe lead to such a massive increase in profits? In this post, we’ll dive into the key factors that have made Europe a major driver of profitability for our brands—and how it can do the same for yours.

1. Lower Competition in Europe

One of the biggest challenges for US sellers is the intense competition on Amazon’s US marketplace. The sheer number of competitors drives up advertising costs, reduces margins, and makes it difficult to maintain profitability. Europe, on the other hand, has less market saturation and fewer aggressive competitors. Many European Amazon marketplaces are still under-penetrated by global sellers, creating a significant opportunity for new entrants. For brands expanding from the US, this lower competition leads to higher market share, more visibility, and reduced advertising costs. When you’re spending less on ads and facing fewer direct competitors, your margins increase, and more profit flows directly into your business.

2. 50% lower CPC

Advertising costs, specifically cost-per-click (CPC), are dramatically lower in Europe compared to the US. With fewer sellers bidding on ad placements, CPCs in countries like Germany, the UK, and Spain are often 50% lower than what you’d experience in the US market. This translates to a massive boost in profitability. You’re able to generate the same or more sales with a significantly lower ad spend. For our portfolio brands, this reduction in advertising costs alone has been one of the most impactful factors in driving profit growth.

3. Access to new, untapped customer bases

The European market is home to over 400 million potential customers across multiple countries. By expanding into Europe, you’re not just entering one new market—you’re entering a collection of individual markets with their own unique customer bases and sales peaks. For example, Germany, the UK, France, and Italy each have a large Amazon marketplace, and by diversifying your sales across these countries, you increase your overall customer reach and revenue potential. More customers lead to more sales, and when combined with lower CPCs, this means significantly higher profits for your brand.

4. Favorable Currency Fluctuations

Expanding to Europe opens up the possibility of benefiting from currency exchange fluctuations. Many European currencies, especially the Euro and the British Pound, often fluctuate in relation to the US Dollar. Depending on the exchange rate, sellers can benefit from converting European revenue into US Dollars, which could result in a higher profit margin when converting currency. For example, when the Euro is strong against the US Dollar, your revenues from the Eurozone may be worth more in USD. Over time, taking advantage of these fluctuations can contribute significantly to your bottom line.

5. Cheaper Shipping Costs

One often overlooked factor that can greatly improve profitability is the availability of Amazon's European fulfillment network. By using Amazon’s Pan-EU FBA program, sellers can store inventory in multiple European countries and ship across the continent at local rates. This allows businesses to reduce the cost of shipping and fulfillment significantly. Shipping domestically within Europe is typically cheaper than international shipments from the US. Plus, the faster delivery times improve customer satisfaction, which can lead to more repeat business, better product rankings, and ultimately more sales—without a substantial increase in operational costs.

6. Enhanced Product Pricing Power

European consumers often have a higher willingness to pay for premium products, which gives sellers greater pricing power. Unlike in the highly competitive US market, where pricing pressure is significant, European consumers are generally less price-sensitive, especially for products in categories like home goods, health and personal care, and kitchen products. This allows private label brands to charge higher prices in Europe without negatively impacting demand, resulting in higher profit margins. Furthermore, the brand loyalty seen in European countries tends to be stronger, meaning you can maintain higher pricing levels over the long term.

7. Scaling with European Warehousing and Manufacturing

As your European operations grow, a key profit-driving strategy is localizing your supply chain. Over time, many sellers find it advantageous to move part of their manufacturing or warehousing operations into Europe. This allows you to reduce lead times, lower shipping costs, and better control inventory levels across multiple marketplaces. By having manufacturing or warehousing closer to your target customers, you gain operational efficiencies that lower your cost per unit and improve your ability to respond to market demands. As a result, your profit margins grow without significantly increasing your operational costs. Some of our portfolio brands have doubled their profits simply by streamlining their supply chain in Europe.

8. Access to a loyal Customer Base

One of the significant differences between US and European markets is the loyalty of the European customer base. While US customers tend to shop around for the best deal, European consumers—once loyal to a brand—are likely to remain repeat customers. By focusing on building a brand that resonates in key European countries, sellers can benefit from a higher customer lifetime value (CLV). Repeat customers mean more predictable revenue streams with less reliance on acquiring new customers constantly. This translates directly into higher profits as customer retention generally costs less than new customer acquisition.

For many of our portfolio brands, 50% of their profit now comes from Europe—proof that with the right strategy, expansion can significantly impact your bottom line. If you’re ready to unlock new profit potential, it’s time to consider Europe as your next step.

Contact us today to learn how we can help you double your profits and grow your brand internationally!

Best regards from Germany,

Manuel Daum, Co-founder & CEO of the profit move.