How to beat Brexit and build a global eCommerce brand
Offering a seamless and transparent buying experience is essential for building a successful global eCommerce brand after Brexit. Customs expert Arne Mielken of Customs Manager explains how.
From long delivery delays to surprise costs and unhappy customers, Brexit has been a nightmare for many eCommerce businesses. Perhaps you’re one of them.
Businesses that export and import to and from Europe now face more red tape and higher costs which inevitably get passed on to consumers.
Things will get even more challenging with the introduction of sweeping new EU VAT rules on July 1, which will see the exemption on low-value consignments scrapped.
All imports will then be subject to EU VAT, irrespective of their value. Instead, you may have to charge your EU customers VAT at the point of sale when they order from your website, rather than pay import VAT when the goods arrive in your country, for consignments of €150 or below.
So how do you build a successful global eCommerce brand in this fast-changing trading environment? It’s all about the customer and making the retail and buying experience as seamless and as transparent as possible.
Be clear on costs
Many customers have been hit with unexpected fees to cover customs charges, additional taxes, and courier costs. On top of that, there are often other costs to factor in, such as demurrage charges for container use, loading fees, and other port charges that can further inflate prices for consumers.
Being completely transparent about costs is essential otherwise you could lose customers who may feel they have been misled on price. So, make sure that when customers go to your online checkout, they can see the total landed cost of goods, including all duties and taxes, to avoid any nasty surprises. Otherwise, they may buy from someone more local or who offers a better customer experience.
You need to know the duty rates that apply in the country you are shipping to and feed them into your costs and price calculations. It’s also sensible to provide a clear breakdown of all costs to ensure total transparency for your customers.
Where’s my order?
There have been countless reports of parcels posted to and from Europe taking as long as two months to arrive, with delivery companies often blaming Brexit for the delays.
So, managing customers’ expectations and preparing them for possible delays is essential, especially in an age when people can track orders on their mobile phones in real-time to see whether they have been shipped or not. It’s important to tell them when there may be a delay and when they can expect to receive their orders.
When it comes to international trade, the buyer often has to carry out the import formalities or the post office does it for them and then charges them for the pleasure. There have been many examples of angry customers having to pay surprise charges before the post office will release their goods.
Making trade as seamless as possible
This is not a great customer experience, so eCommerce businesses need to think about what structures need to be set up to ensure that buying is as open and as seamless as possible. This means doing some back-office work, such as making sure each item has the correct committed code, value and origin declared and vetted.
One solution to the delays and extra costs thrown up by Brexit is to consider setting up a warehouse in the EU for storing high-selling stock. This would enable you to provide faster deliveries and avoid damaging duties and higher costs for customers.
As well as zero customs formalities and declarations to slow things down, having an EU presence also means you don’t have to worry about complex rules of origin to enjoy tariff-free trade.
By making the retail and buying experience as seamless and as predictable as possible, you can take some of the hassle out of cross-border trade and take your eCommerce brand to the next level.
About the author
Arne Mielken is a leading global trade expert in the UK and the EU, and founder of the customs and training consultancy Customs Manager Ltd. Arne supports businesses to reach their international customers faster, by cutting costs, red tape and paperwork. He assists and trains companies to de-risk their supply chain and stay compliant, enabling them to grow globally. Customs Manager Ltd also offers UK import and export customs clearance services.
For more information visit https://www.customsmanager.org.
James and James Fulfilment
It all began in 2010, when James Hyde and James Strachan couldn’t find a modern shipping service for the eCommerce business they ran. Faced with messy warehouses based on out-dated systems, they decided to build their own.
We’ve not stood still since, helping hundreds of online brands scale up – and scaling with them.
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