Fulfilment

What it means

Fulfilment hands the warehousing and dispatch of an e-shop to an outside provider: it stores the goods, picks orders, packs, ships and processes returns. The seller towards the customer is still the shop itself.

It differs from dropshipping in ownership: with fulfilment the goods belong to the shop and sit in someone else’s warehouse, while with dropshipping the seller never touches them and the supplier ships directly.

A fulfilment provider is neither a commission agent nor a seller: it never buys the goods and only invoices services for storage, packing and shipping. Its fee is a service. Freight into its warehouse may form part of the acquisition cost of the goods, but charges for dispatch to customers are selling costs, not part of the inventory value.

How it works in practice

Goods in an outside warehouse remain the shop’s property, sit in its inventory and are counted at the balance sheet date. The provider’s report does not replace the company’s own stock records; the two have to agree item by item.

For tax it matters where the warehouse stands. Selling to EU consumers from a Slovak warehouse is settled through OSS, but moving your own goods into a warehouse in another country is a transfer that triggers registration there.

When the provider is based in another EU state, it normally invoices its services without Slovak VAT and the shop accounts for the tax itself. A shop that is not VAT-registered must first register under § 7a because of such a service. When we take on a client using fulfilment abroad, we start by going through the provider’s invoices and checking the registration exists.

What to watch out for

The provider shifts pallets to a warehouse in another country and the shop learns it from a report. A transfer of own goods is a taxable transaction: backdated registration abroad and late filings follow, and while the tax is usually deductible, the local penalties are not.

Returned goods that the provider writes off as damaged need a document recording the write-off or disposal. Without it the stock difference is a shortage, which above the norm for natural losses is not tax-deductible and for a VAT payer may also require a correction of input VAT. Return reports need collecting every month, not only at the stocktake.