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What’s the smartest choice for e-commerce companies entering Europe?
You’ve gained traction in the U.S., and now you’re looking at Europe. But where should you start? For international D2C brands, the first step in European expansion is usually picking a fulfilment location. Germany and the Netherlands stand out as logical hubs: both are centrally located, well-connected and have mature logistics infrastructures. But which country really fits your growth strategy?
In this blog, we compare the two countries not through generic advantages, but by looking at five key questions that really matter: how agile and scalable is the logistics, what about import rules and VAT, how does the labor market compare, how are returns handled, and what is the growth potential?
How agile and scalable is the logistics?
Germany has scale. It’s Europe’s largest economy, with major transport hubs in Frankfurt, Hamburg and Leipzig. From these locations, serving Central and Eastern Europe is straightforward. That’s attractive if your focus is on volume in those regions.
The Netherlands, however, offers something different: logistics finesse. With Schiphol Airport and the Port of Rotterdam as global gateways, plus a dense network of logistics providers, you can deliver to almost any European country in no time. Many companies choose a warehouse in North Holland, where air and sea freight converge efficiently. The southern Netherlands is also a popular logistics region.
According to the World Bank Logistics Performance Index (2023), the Netherlands scores slightly higher than Germany (rank 6 vs. 7). That advantage comes mainly from shorter lead times, particularly for imports and first-mile fulfilment.
Differences in import rules and VAT processing
European VAT rules remain a common stumbling block for international companies. Germany follows a traditional approach: import VAT often has to be paid upfront or via intermediaries. Rules can also differ by federal state, which complicates compliance.
The Netherlands, on the other hand, provides a tangible advantage through Article 23 of the VAT Act. You can defer import VAT until your regular VAT return, without pre-financing it. This immediately improves cash flow, which is crucial if you regularly import high-value shipments.
Additionally, the Dutch tax authorities are generally more experienced with international companies: English-language helpdesks, pragmatic customs brokers, and knowledge of international structures are all available. This shows that starting smoothly doesn’t have to take months.
Labor availability and fulfilment capacity
Both Germany and the Netherlands face tight labor markets. In Germany, the logistics sector feels the pressure most: rising wages, an aging workforce, and high competition for staff increase operational risks, particularly in logistics hotspots.
The Netherlands faces similar challenges but addresses them more proactively. Many fulfilment companies combine automation, international labor migration, and scalable processes. Think robot picking, advanced WMS integrations and smart planning systems. Regions like North Holland and Flevoland are leaders in this area.
Although labor costs are slightly higher in the Netherlands than in Germany, this is often offset by higher productivity, fewer errors and greater operational flexibility.
Consumer expectations and returns
German consumers are demanding. Over 90% expect free returns (Statista, 2024), and many use returns as an extended decision phase. This leads to high return rates, so your return process must be flawless, which increases cost and complexity.
Dutch consumers are critical but slightly more pragmatic. They value clarity, self-service, and speed. Smartly designed return portals, reliable tracking, and transparent policies perform well here. Many Dutch fulfilment providers also specialize in return processing and refurbishing, allowing goods to be resold faster. This is a manageable entry point for international brands aiming to control returns before entering more complex markets.
Which location best supports your European growth?
Germany is geographically central in Europe, with direct access to neighbors like Poland, Austria, and Switzerland. If your target audience is mainly there, or if you already have brand recognition in Germany, a local fulfilment location makes sense.
The Netherlands is more than just a starting point: it’s a pan-European hub. From here, you can easily reach the U.K., Scandinavia, France, Spain, and Italy, and integrate with marketplaces like Amazon, Bol.com, and Zalando. Transport flows are efficient, shipment consolidation is common, and the regulations are e-commerce friendly. Additionally, the Netherlands is quickly aligning with European digitalization projects like the Single VAT Register, which simplifies future scalability. This register centralizes VAT obligations within the EU, so international e-commerce companies don’t need separate registrations in each country but can manage VAT through a single system.
No matter which hub you choose, it’s smart to consider flexibility, reach, and practical hurdles upfront.
The best choice starts with your strategy
There is no universal answer to Germany or the Netherlands. Everything depends on your brand ambition, target market, and desired scale.
In practice, many American brands prefer the Netherlands because the language barrier is minimal and it allows you to start small with a limited number of SKUs. Dutch fulfilment culture also aligns perfectly with D2C thinking, where speed and customer experience are key.
If you want to move quickly, start small, and scale flexibly, the Netherlands is probably the smartest first step. If your focus is directly Germany or Eastern Europe, starting in Germany and serving Eastern Europe from there can make sense.
Want to find out which option fits your brand and growth plans best? We’re happy to help you figure it out.
