By Rob van den Heuvel, CEO and Co-founder of Sendcloud
There is unfortunately no crystal ball to predict how Brexit will impact the e-commerce industry. Like many of us, online retailers are, waiting with trepidation to see what happens on the 1st of January 2021.
Whatever happens, there are many questions that online retailers need answers in order to prepare for any disruption in the new year. What will Brexit bring for UK e-retailers that ship in Europe (EU) and will this impact supply chains post-Brexit?
Taking these worries into account, Rob van den Heuvel, CEO and Co-founder of Sendcloud discusses the top fears for online retailers ahead of Brexit and tips to help online retailers prepare for the challenges and opportunities as the dust settles in 2021.
Operating in a post-Brexit world
One challenge UK retailers will most likely face following Brexit is that they will be subject to EU controls when selling into EU countries. This may result in higher export costs, such as customs delays, packaging or quality requirements or possibly even tariffs and taxes. Doing business in the EU will be harder than you were used to.
From our own research, 42% of European online shoppers state that one of the main reasons they don’t order from international stores is the potential extra costs from customs. This concern is also shared with retailers as international shipping will undoubtedly prove to be a headache, as Brexit may result in increased export costs which will have a knock on effect particularly for cross border e-commerce. To overcome this, it’s important to think how you can tackle customs without bothering your customers.
It is important to address consumer expectations to ensure you are clear with your communications around additional fees and shipping times post-Brexit. Bigger companies might consider setting up a manufacturing base or a sales entity inside the EU to mitigate against some of these controls. If you are a smaller company then automation customs forms will help reduce shipping times to EU customers.
Tackling the ‘new’ borders
Whilst there isn’t a single, foolproof way to manage the impact of Brexit, keeping your business open for trade and/or manufacturing inside the single market could be a potential solution to protecting your revenue. Vitally, communication is paramount and whatever changes do occur, consumers must be kept informed.
While we still don’t know what the future of shipping from the UK to the EU after Brexit (and vice versa) will look like, it is important to analyse all potential situations and prepare an international shipping strategy for each scenario in order to minimise any potential disruption. Not only will this help retailers be ready for any Brexit scenario, the added bonus is that it can now help you open up international shipping channels and therefore a wider customer base.
Doing business under World Trade Organisation rules
When the UK formally leaves the EU and the transition period is over, it’s good to know what to expect. As long as there is no trade agreement, there will be no free movement of goods between the UK and the EU. In this case the trade rules of the World Trade Organisation will automatically come into place and your parcels could be delayed or even blocked when you don’t complete customs forms correctly.
In this case it will be essential to have a EORI number in order to move goods between Great Britain and the EU. If you do not have an EORI, you may have increased costs and delays. Besides this you will need to add a Commercial Invoice when you deliver products from the EU to the UK, as well as a CN22 or CN23 depending on the carrier you are using. Don’t forget to think about local VAT and duty policies as well, since negative surprises are never fun.
Automation is key
Automation is making this process simpler for retailers. For example, automated shipping providers working alongside services such as DHL’s Paperless Trade allows businesses to electronically send customs documents – eliminating the need to physically print and attach forms to shipments with customs documents automatically forwarded digitally to the carrier.
You can also automate your process using a shipping platform which will allow for flexibility as you will not be bound to a specific carrier which can be advantageous, particularly when shipping to different countries. It may prove best to use DPD for European countries whereas DHL Express could be more efficient when shipping to the US.
The only certainty is uncertainty. However, online retailers need to take action sooner rather than later and not leave things to chance. Now is the time to solidify plans for what’s ahead in the coming months as the knock-on effects will most likely rumble on for years to come. Taking proactive steps to prepare for a post-Brexit e-commerce industry can help minimise any disruption, manage the impact and even gain a competitive advantage over those caught flat-footed.