Entering the German market: lessons from a furniture workshop
Marek from Skaryszew has been running his workshop for 9 years and employs 6 trusted carpenters. In March 2023, we jointly decided that the local market near Radom was becoming too small for his oak dressers. We decided to sell in Germany, but it soon turned out that will and a good product alone are only 32% of success when facing the bureaucracy there.
Collision with the German tax office
The biggest surprise for Marek was not the customers' requirements, but the waiting time for a German VAT number (USt-IdNr). We assumed that the formalities would take two weeks, but in reality, we waited a full 43 working days. Without this number, Amazon would have blocked the account after the first sale, which could have ruined the brand at the start. In the reality of Radom, we often act on the fly, but with our neighbors across the Oder, deadlines are as rigid as concrete.
In the meantime, we had to deal with the LUCID system, i.e., packaging registration. Germany is very strict about ecology, and every cardboard package must be reported in a special register. Marek had to pay a 124 euro recycling fee for the predicted weight of packaging for the first year. It's seemingly a small amount, but the lack of this entry carries a fine of up to 200,000 euros, which for a workshop employing 6 people would mean immediate bankruptcy.
The German office does not forgive the lack of a LUCID number, and the fine can be as high as 200,000 euros.
Logistics is more than just shipping a package
Transport from Radom to Berlin or Munich is about 600-900 kilometers. Marek initially wanted to send the furniture by the courier he used in Poland, but the costs were eating up the margin. One dresser weighs 47 kilograms, which cost 318 zlotys in the standard international price list. We had to find a carrier that takes partial loads and lowers the price for 12 regular runs per month.
It also turned out that packaging for the German market requires an additional 3 cm thick layer of styrofoam on each corner. German customers are sensitive to the smallest scratch. After introducing these changes in June 2023, the number of complaints dropped from 4 per month to exactly zero. This shows that saving on tape and foil is only a perceived gain that backfires with returns.
Delegating tasks, or Marek leaves the workshop
For the first 8 years, Marek answered every phone call himself and issued invoices in the evenings. When exporting to Germany, this method stopped working after 3 weeks. We calculated the specific profits and saw that Marek was wasting 4 hours a day replying in German (using a translator) instead of overseeing quality on the floor. This was a critical moment for his company.
We hired Ms. Beata part-time, who knows the language and only handles foreign customer service. Thanks to this, Marek regained 18 hours a week. During this time, he implemented a new line of coffee tables, which now sell at 23 units per week. A long-term business is built when the boss stops being the cheapest office worker in his own company.
The boss cannot be the cheapest office worker, because then the company stands still.
Amazon is more than just uploading photos
Many people think that it is enough to take a photo with a phone and wait for the euros. Competition on Amazon is huge. We had to invest in a professional session of 12 furniture models, which cost us 4,800 zlotys. Each description had to contain specific technical data: wood moisture, the type of oil used, and the exact load capacity in kilograms. Without these details, customers from Munich simply didn't click 'buy now'.
In July 2024, 16 months after starting, Marek's workshop generates 47% of its turnover from the German market. It was not a road paved with roses, but a hard school of planning. Without beating around the bush: exporting pays off if you have your papers in order and are not afraid to give up some control to employees. Proven in Radom's realities, it also works abroad.
