Selling from the UK to Europe after Brexit
After the UK's withdrawal from the European Union in 2020, businesses based in the UK face new challenges when distance selling their products abroad. Despite the uncertainties and complexities surrounding Brexit, there are still benefits for UK businesses that continue or start to trade in the EU. There are numerous reasons why UK businesses should consider selling in the EU countries, even in the post-Brexit era:
- Access to a larger market. The EU is a vast market with over 440 million potential customers.
- Reduced tariffs. Before Brexit, UK businesses had to pay import tariffs when selling to EU customers. With the UK-EU Trade and Cooperation Agreement, many tariffs have been eliminated.
- Diversification. UK businesses now have the opportunity to diversify their revenue streams, which can be particularly beneficial during times of economic uncertainty and online selling.
- Cultural exchange. By trading in the EU single market, UK businesses can experience a new culture, have new customers, properly organize their fulfillment centers, gain a better understanding of their customers, and adapt their network.
This article will explore the key benefits of selling from the UK abroad after Brexit and provide practical tips and advice for any ecommerce business looking to navigate the new landscape.
UK Delivery Difficulties
The fulfillment of timely deliveries to customers in Germany and France has become a serious challenge for UK retailers, leading to a poor customer experience. Since the UK is no longer a member of the European Union Customs Union or VAT regime, selling goods to the EU single market has become complicated. Retailers now have to deal with import duties, HTS and Commodity Codes, completing import declarations, and managing increased Value Added Tax liabilities, causing increased costs and potential VAT fines.
Below are the main difficulties you may come across:
- Custom declarations. Exporters from the UK are now required to complete custom declarations when shipping goods to the EU. This can be time-consuming and may require additional expertise and resources.
- VAT and duties. The UK is no longer part of the EU VAT system, which means that goods exported to the EU are now subject to VAT and duties. Traders need to be aware of these additional costs and ensure that they have the correct documentation. If your business is VAT registered in an EU member state, it also must be registerd on the VAT Information Exchange System (VIES).
- Border checks. With the UK no longer part of the EU single market and customs union, goods exported to the EU countries are now subject to border checks, which can cause delays and additional costs. Followng Brexit, exporting into the EU now requires an EU EORI number. The UK EORI number is no longer sufficient.
- Rules of origin. Goods exported to the EU may be subject to rules of origin requirements, which determine the origin of the goods and the applicable tariffs. Those running an e-commerce business need to ensure that their goods meet the relevant rules of origin to avoid additional charges.
- Transport delays. Changes to customs procedures and border checks have led to increased transport delays, which can impact delivery times, returns, and increase costs.
The customs declaration process for all goods sold into the EU from the UK is mandatory, and if the consignment exceeds 150 Euros, there may be tariffs owed which must be paid alongside the customs declaration to release the goods. UK-based sellers must register and charge VAT in France and Germany, regardless of their distance selling thresholds, and attach the correct VAT to the sale to avoid passing unexpected costs to customers. Failure to comply with these regulations can result in customs delays, bad fulfillment centers organization, and fees, leading to bad customer service.
In the absence of proper attention to compliance requirements, the customer experience will suffer, leading to lost sales and negative word-of-mouth promotion. Online retailers must take steps to offset these increased costs and ensure a positive customer experience to retain customers and grow their e-commerce business.
Cross-border shipping and fulfillment in Europe can be a daunting task for online retailers, but there are ways to overcome the challenges and reap the benefits of selling in the largest e-commerce markets in Europe. The key to optimal cross-border fulfillment is to split up your inventory and store a portion of it in a fulfillment center within the European Union. This ensures that your customers receive their orders in a timely manner without any customs delays or extra fees.
Here are the main steps you need to take when you start distance selling products from the United Kingdom to Europe.
1. Determine the requirements
Check the customs requirements for the country or countries you plan to ship to and organize the fulfillment centers. This includes any tariffs, taxes, or returns that may apply to your goods and transportation.
2. Choose a carrier
Find a reliable carrier with experience in cross-border shipping and a wide network. Check their rates and shipping times to ensure they fit you, especially in case of returns.
3. Prepare your goods
Package your goods securely for transport abroad and ensure they are labeled correctly with the necessary information. Include the destination address, customs information, and any special handling instructions.
4. Obtain necessary documentation
Obtain any necessary documentation for goods and fulfillment, including invoices, export licenses, and customs declarations. Make sure these documents are accurate and complete to avoid any delays in customs.
5. Choose delivery options
Manage your fulfillment center and decide on delivery options such as express or standard shipping. Choose the best option for your needs.
6. Track your shipment
Use the carrier's tracking service to monitor your shipment's progress and ensure it arrives at its destination on time.
7. Communicate with your customers
Keep your customers informed of the shipment's progress, including tracking information, reaching fulfillment centers, and estimated delivery times.
8. Evaluate your shipping process
Regularly evaluate your shipping process to identify areas for improvement and ensure that your cross-border shipping remains efficient and effective.
While building and managing your own fulfillment center abroad can be expensive and resource-intensive, outsourcing your order fulfillment process to a third-party logistics provider can be a cost-effective solution.
You can opt for warehousing and logistics and fulfillment solutions like that with WAPI, and afterwards you will enjoy low shipping and fulfillment costs and faster delivery times. This translates into improved conversion rates and higher customer satisfaction. Additionally, storing your inventory in a fulfillment center located in European Union countries can help avoid returns and dissatisfied customers.
By taking the necessary steps to optimize cross-border fulfillment, online retailers can successfully sell their products in the largest e-commerce markets in Europe, while avoiding the potential drawbacks associated with cross-border shipping.
Optimizing Cross-Border Fulfillment through Storing Goods in EU
To optimize cross-border fulfillment and ensure a smooth customs declaration process, there is a step that any e-commerce business will need to take. It involves obtaining the necessary documentation, such as an EORI number, VAT number, and HS code.
In order to export goods abroad, a business must have an EORI (Economic Operators Registration and Identification) number that is registered with the EU Customs department. The process of obtaining this number can take up to 10 working days. It is crucial to register for a VAT (Value Added Tax) number, which can take up to eight weeks to complete.
The customs declaration must contain the HS (Harmonised System) code, which is used for identifying products and calculating custom returns based on the product's price and margins. The following information is also required for the customs declaration:
- A commodity code that uniquely identifies the shipment
- The cargo's origin and destination
- The shipper and receiver of the freight
- The nature of the merchandise, amount, and packaging
- The transport method used to reach the fulfillment centre
- Any applicable certificates or licenses
- The country of origin of the products
Requirements for Fulfillment Centres and Advice for UK-based Merchants
To ensure smooth cross-border shipping after Brexit, it is crucial for UK-based online retailers to provide the following information to their fulfillment centre:
- A detailed description of the item
- The country of production
- The customs code for the item
- The monetary value of the goods
- The currency of the transaction
It's also important to ask the UK-based fulfillment company if there will be any fluctuations in the postage charges for international shipments. Although some couriers may change their prices without notice, a reliable fulfillment house should notify you in advance. Otherwise, the satisfaction rate of your customers will decrease dramatically.
Working with a trusted third-party fulfillment house like WAPI can help merchants feel better prepared for cross-border shipping. WAPI specializes in order fulfillment, allowing retailers to focus on selling their products and providing customer service, no matter where they are located. To learn more about WAPI's fulfillment solutions and how they can help with your order fulfillment needs, contact their team.
We offer various solutions tailored to your business needs and size. The main benefits you can get by using WAPI:
1. Assisting you in finding suitable 3PL partners.
This includes warehousing, fulfillment, and final mile delivery providers.
2. Providing easy-to-use shipping software.
It gives you access to a broad range of local warehouses and logistic networks, simplifying cross-border sales and distribution.
3. Integration of your logistics network and partners into a single platform.
No matter what your current software solution is, we allow you to save 100 hours of IT work per partner.
With the uncertainty of Brexit, inventory management is crucial for predicting demand and managing inventory effectively. WAPI network connects numerous warehouses and fulfillment centers located in the EU countries and USA, providing a trusted warehouse management system, storage for your products and offering picking, packing, and shipping services. Contact our team to learn more about how we can assist you with your fulfillment needs.
Selling from the UK to the EU can be a profitable venture for businesses looking to expand their customer base. However, it is important to take into account the changes brought about by Brexit, including customs regulations, organizing fulfillment centers, VAT, and shipping requirements. By taking the necessary steps to comply with them, businesses can successfully navigate the cross-border shipping process, and provide their EU customers with a seamless buying experience.
Working with a third-party logistics network partner, such as WAPI, can also help simplify the process and ensure cost-effective delivery of goods. Ultimately, with the right preparation and strategy, selling from the UK to the EU can open up a number of new opportunities for businesses.