# PRICING STRATEGY — EU VARIANT

> **Region:** European Union, EEA, UK
> **Primary currency:** EUR (Euro). UK: GBP (1 EUR ~ 0.85 GBP). Switzerland: CHF.
> **Decimal convention:** **Comma as decimal separator** (`EUR 9,99`, `EUR 1.299,00`)
> **Charm pricing:** `EUR 9,99`, `EUR 29,99`, `EUR 99` (less aggressive than US)
> **VAT-inclusive thinking:** Display prices INCLUDE VAT for B2C; B2B can show ex-VAT

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## EU currency formatting rules

| Style | Example | When |
|-------|---------|------|
| Basic charm | `EUR 9,99` or `9,99 EUR` | B2C |
| Higher charm | `EUR 29,99` | DTC mid-tier |
| Round B2B | `EUR 99 / monat` (DE), `EUR 99 / mois` (FR) | SaaS B2B |
| Premium clean | `EUR 1.299` (no decimal) | Luxury |
| Annual | `EUR 290 / Jahr` (Save 17%) | Annual upsell |

### Comma as decimal (the BIG difference)

- EU uses **comma as decimal separator**: `1.234,56 EUR`
- EU uses **period (or space) as thousands**: `1.234.567,89` or `1 234 567,89`
- US format `$1,234.56` looks WRONG to European eyes — fix it

| Country | Format example |
|---------|---------------|
| Germany | `1.234,56 EUR` |
| France | `1 234,56 EUR` (space as thousands) |
| Italy | `1.234,56 EUR` |
| Spain | `1.234,56 EUR` |
| Netherlands | `EUR 1.234,56` |
| UK | `GBP 1,234.56` (period decimal — exception, like US) |
| Ireland | `EUR 1,234.56` (English convention) |
| Switzerland | `CHF 1'234.56` (apostrophe thousands) |

**Practical:** Detect locale; format dynamically. Hardcoded US format alienates EU shoppers.

---

## VAT (Value Added Tax) — fundamental EU difference

### EU VAT rates

| Country | Standard VAT | Reduced |
|---------|-------------|---------|
| Germany | 19% | 7% |
| France | 20% | 5.5%, 10% |
| Italy | 22% | 4%, 10% |
| Spain | 21% | 10% |
| Netherlands | 21% | 9% |
| UK | 20% | 5% |
| Ireland | 23% | 13.5% |
| Sweden | 25% | 6%, 12% |
| Denmark | 25% (no reduced) | n/a |
| Austria | 20% | 10%, 13% |

### Display rules

- **B2C: prices INCLUDE VAT** (mandated by EU consumer protection law)
- **B2B: prices CAN be ex-VAT** (with clear "ex-VAT" labeling)
- **Cross-border within EU:** OSS (One-Stop Shop) makes you charge customer's local VAT rate

### Why it matters for pricing

- US-style "starting at `$29 + tax`" is ILLEGAL for B2C in EU — must show `EUR 29,00` inclusive
- For 19-25% VAT, your "displayed" price needs to be ~25% higher than ex-VAT for same gross margin
- Annual prepay must clearly state included VAT or "subject to local VAT"

---

## EU pricing psychology

### Cultural variation within EU

| Country | Style |
|---------|-------|
| Germany | Quality > price; charm pricing less effective; round numbers feel premium |
| France | Brand + design conscious; charm pricing OK but not aggressive |
| UK | More US-like; charm `GBP 9.99` works (period decimal) |
| Italy | Discount-conscious; "Saldi" (sales) culture strong |
| Spain | Discount-conscious; "Rebajas" culture |
| Netherlands | Practical; transparent pricing valued |
| Nordic (SE/DK/NO/FI) | Premium quality willingness to pay |

### Charm pricing — EU style

- **Use:** `EUR 9,99` `EUR 29,99` for mass B2C
- **Avoid:** Excessive `,99` for premium German market — `EUR 1.299` over `EUR 1.299,99`
- **B2B SaaS:** Round (`EUR 99`, `EUR 299`) — Germans especially prefer

### Subscription dominance

- Monthly default; annual at -15-25% lift
- Germany: cancellation must be online (Faire Verbraucherverträgegesetz, 2022)
- France: similar consumer protections; auto-renewal must remind 1-3 months prior

---

## EU tier conventions by industry

### B2C subscription (Spotify, Netflix EU, etc.)

| Tier | Price (DE) | Strategy |
|------|-----------|---------|
| Basic / ad-supported | `EUR 4,99-7,99/mo` | Ad-supported entry |
| Standard | `EUR 13,99-15,99/mo` | Target |
| Premium | `EUR 19,99/mo` | Anchor |

### B2B SaaS (EU SMB)

| Tier | Price | Strategy |
|------|-------|---------|
| Starter | `EUR 29-49/mo` | Self-serve |
| Pro | `EUR 99-199/mo` | Target |
| Business | `EUR 299-499/mo` | Mid-market |
| Enterprise | Contact sales | Sales-led |

### DTC (skincare, food, apparel)

| Tier | Price | Strategy |
|------|-------|---------|
| Lead-in | `EUR 19,99` | Trial size |
| Core | `EUR 39,99-49,99` | Target |
| Bundle | `EUR 99-129` (3-pack) | AOV lift |

---

## EU pricing page conventions

### Layout

Similar to US, but:
- **Prices include VAT** by default for B2C
- Currency picker in header (DE/FR/IT/ES/UK toggle)
- Local payment methods featured (SEPA, iDEAL, Bancontact, etc.)
- "Cancel anytime" prominent (consumer protection expectation)

### Must-haves

- VAT-inclusive prices for B2C (legal requirement)
- 14-day right of withdrawal stated (EU Consumer Rights Directive)
- Cancellation policy clear and easy
- Cookie consent banner per ePrivacy
- Privacy policy link

---

## EU payment methods (more diverse than US)

| Country | Top payment methods |
|---------|---------------------|
| Germany | SEPA Direct Debit, PayPal, credit card, Klarna, Sofort |
| France | Credit card (CB), PayPal, SEPA, Apple Pay |
| UK | Credit card, debit card, PayPal, Apple Pay, BNPL (Klarna) |
| Netherlands | iDEAL (60%+), credit card |
| Belgium | Bancontact, credit card |
| Nordic | Vipps (NO), Swish (SE), MobilePay (DK), credit card |
| Italy | Credit card, PayPal, postepay |
| Spain | Credit card, Bizum, PayPal |

**Practical:** Stripe + Adyen + Mollie support most. Adding local methods lifts conversion 15-30%.

---

## Dropshipping pricing — EU specifics

EU has lower CPM than US, so markup can be slightly less aggressive, BUT VAT eats margin:

| Product cost (EUR) | EU sale price | Markup | Notes |
|-------------------|--------------|--------|-------|
| EUR 3-5 | EUR 24,99-34,99 | 5-7x | Account for 19-25% VAT |
| EUR 5-10 | EUR 39,99-59,99 | 4-6x | Same |
| EUR 10-20 | EUR 59,99-89,99 | 3-5x | Tariff impact for non-EU sourcing |
| EUR 20-40 | EUR 79,99-129 | 2.5-3x | Premium positioning |

### EU-specific dropship costs

- **Import duties:** 0-12% on most goods from China
- **Import VAT:** 19-25% (collected at customs since IOSS 2021)
- **EU returns:** Higher rate than US (14-day return mandatory) — budget 8-12% returns

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## UK post-Brexit specifics

- UK separate from EU VAT (GBP 20% standard)
- UK uses **period decimal** like US (`GBP 9.99`)
- Importing UK -> EU now has customs friction
- UK-EU returns more complex; document supplier terms

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## EU benchmarks — pricing-specific (2025-2026)

| Metric | Range |
|--------|-------|
| DTC AOV (EU) | EUR 50-110 |
| SaaS ACV (SMB) | EUR 3K-15K/year |
| SaaS ACV (mid-market) | EUR 15K-80K/year |
| Annual prepay uptake | 30-45% (higher than US — savings culture) |
| Discount uptake | 35-55% (less couponing than US) |
| Trial-to-paid | 12-22% |

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## EU pricing checklist

- [ ] Currency `EUR` with comma decimal (`EUR 9,99`)
- [ ] Country-specific format detection (DE: `1.234,56`, FR: `1 234,56`, etc.)
- [ ] VAT included for B2C; ex-VAT clearly labeled for B2B
- [ ] 14-day right of withdrawal mentioned (EU mandate)
- [ ] Local payment methods (SEPA, iDEAL, Bancontact, etc.)
- [ ] Cookie consent banner active
- [ ] Annual prepay -15-25%
- [ ] Cancellation easy + clearly explained
- [ ] If dropshipping: account for IOSS, import duties, return rate

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*EU Variant | Global Skill 17 | Over Powers Agency | v1.0.0*
