If you’re based in the US and are considering expanding into new territories, the UK could be a great option for your eCommerce business. Once your business begins to grow, you may find that a good proportion of your overseas custom comes from the UK.
The UK has the 6th largest economy in the world, and has historically had close trading ties with the US (as of 2022, the US accounts for one sixth of British trade). Naturally, you’ll find the UK customers are highly interested in American goods.
There is, however, quite a bit to be aware of before you begin shipping to the UK. In this guide, we’ll discuss what you need to be aware of, and how you can overcome the challenges of shipping to the UK.
In this article
What are the benefits of shipping to the UK?
As we’ve discussed, the UK is one of the world’s largest economies, and like much of the western world, UK consumers do a significant amount of their shopping online. Here’s some of the advantages of shipping to the UK:
- Reach new markets – sell to customers across England, Scotland, Wales, and Northern Island. In the UK, eCommerce sales made up 27.1% of the total retail share in January 2022.
- Grow your business – new markets means more sales, and more sales equals business growth. While they’ll be investment required at the offset, the ROI can pay off massively with a well-managed expansion strategy.
- Overtake competitors – Whether you’re dominating the local market or struggling to keep up with the competition, selling in the UK allows you to reach customers that are out of the reach of competitors. By the time they’ve realized what you’re doing, you’ll already be miles ahead.
Now that we’ve discussed some advantages of selling from the US to the UK, let’s look at what you’ll need to consider going forward.
Taxes and Tariffs
Unlike the EU, the US doesn’t have a trade agreement in place with the UK to lower costs of trade between the countries. As a result, the cost of shipping goods from the US to the UK can be high, depending on the product.
As you’d expect, cost variations depend on the weight and size of your product, how quickly you need it to be shipped, which carrier you choose, and whereabouts in the United Kingdom you’ll be shipping to.
There are two taxes to be aware of when shipping to the UK from the US; import duty tax and VAT.
You’ll need to pay the UK government import duties when shipping goods to the UK. The cost of import duties depends on the items you’re shipping, but generally, the cost is between 0% and 12% of the declared value of the goods.
For example, let’s say you’re shipping $2000 worth of goods to the UK, with a 5% import tax. The import tax would be $100.
You’ll also need to pay Value Added Tax (VAT) when you ship goods from the US to the UK. VAT is 20% of the declared value of goods, cost of shipping, and import duty.
If we take the $2000 worth of goods, the $100 import duty, and include a hypothetical $500 shipping cost, we’re looking at $2600 before VAT. To add VAT, simply work out 20% of $2600, which is $520. Therefore, the cost of shipping these goods to the UK will be $3120.
Some items, such as alcohol and confectionery, may have additional costs associated with them. You’ll also need to consider insurance for shipping your goods, too.
Paying VAT and Import Duty
Thankfully, paying VAT and Import Duty to HMRC (the government body in the UK that handles tax) is simple. Whichever courier handles customs clearance on British soil will get in touch with your business to tell you how much you owe and collect payment. In many cases this will be Royal Mail, FedEx, or Parcelforce, although there are other companies, too.
You’ll need to pay the relevant costs before they release your goods into the country. If you don’t pay, they’ll send your items back to you – and charge you for it, of course. You’ll usually have a few weeks to pay, but you’ll likely want to pay soon rather than later.
Which carriers ship from the US to the UK?
The UK is a sought after market for many eCommerce businesses. As a result, you’ll find plenty of reliable carriers that you can use to ship your products to the UK. Here’s some of the most popular carriers to choose from:
USPS are a popular choice when shipping goods to the UK because they’re the only postal service to offer flat-rate shipping across the Atlantic. For you, it means you’ll be able to accurately forecast shipping costs and won’t have to worry about large fluctuations. USPS have a great presence in America, with drop-off points across the country.
Perhaps the biggest drawback of using USPS is the lack of tracking once your items reach British shores. All USPS packages are handled over to Royal Mail when they reach the UK, who’ll take care of last-mile delivery. You might also experience delays as Royal Mail processes the transfer, which can be from a few days to a few weeks.
USPS services to the UK
- Priority Mail Express International (3-5 days)
- Priority Mail International (6-10 days)
- First Class International Service (11-20 days)
UPS has a huge, international shipping network, making it another great choice for businesses shipping to the UK. They’ve got sites across the US, and can pick your parcels up from your place of choosing. You can ship packages in a variety of sizes, and there’s extensive tracking for both your and your customer’s peace of mind.
However, it’s worth noting that UPS is generally more expensive than other carriers, both in the cost of shipping and additional fees that can add up on some types of orders.
UPS services to the UK
- Worldwide Expedited (2-5 days)
- Worldwide Saver (6-10 days)
FedEx are another popular choice for shipping goods from the US to the UK. As you’ll see by their services below, they’re fairly comparable to UPS in terms of delivery times, and their costs are pretty similar, too.
Like UPS, FedEx aren’t the cheapest option out there, and you might have some additional fees to contend with following the base-rate.
FedEx services to the UK
- International Priority (2-5 days)
- International Economy (6-10 days)
DHL has a large presence across the world – especially in Europe. It makes them a good choice when shipping to the UK, as that’s where their logistics network is strongest. They’re one of the better companies to work with if you’re shipping to multiple countries in Europe.
That being said, their presence in the US isn’t as widespread as the other carriers on this list, and as such, you might struggle to deliver your parcels into their care. Due to their international focus and reliability, they’re also quite expensive.
DHL services to the UK
- International Express (3-6 days)
Are there any downsides to shipping to the UK?
Shipping to the UK has the same hurdles to overcome and shipping to many countries overseas. There’s always more variables involved, and, unfortunately, more opportunity for things not to go to plan. However, there are a few specific things to consider if you’re planning to start selling in the UK.
The Atlantic Ocean isn’t exactly small, so your parcels have a long way to go. This results in larger-than-average shipping costs, particularly if you’re fulfilling orders one at a time. Sending items in bulk is, of course, much more cost-effective.
There’s also the matter of taxes and duties, which again, aren’t always cheap. You’ll need to factor your additional costs into your pricing strategy.
There could be delays to delivery times if your goods are held up at customers. This is particularly true for USPS as they’ll hand your items to Royal Mail once they arrive in the UK. If Royal Mail are busy or behind schedule, it can take some time for them to process the goods.
The UK is notorious for its bad weather, especially in Northern England and Scotland. While bad weather in the UK generally isn’t as extreme as in the US, it is more common. Storms, high winds, snow, or foggy conditions might result in delays.
How to make shipping to the UK much simpler
It’s true – shipping from the US to the UK can be a headache at times, but it doesn’t have to be! Outsourcing your fulfillment to a 3PL with British facilities can make the process much quicker, easier, and cheaper!
James and James Fulfillment were founded in the UK in 2010, and we’re able to offer next-day delivery to all regions within the UK. Our headquarters is based in Northampton, England, a central location that is extremely close to several international airports, major motorways, and the UK’s premier logistics hubs.
Here’s some more advantages of using James and James to sell goods in the UK:
Pay less duties
As we discussed earlier in the article, each time you send goods to the UK, you have to pay fairly expensive duties on each shipment. When you outsource your fulfillment to us, you’ll be able to send your goods in bulk and store them in one of our fulflilment centres, meaning you’ll save on both shipping costs and import duty.
Fulfil orders quicker
Sending goods from the US to the UK takes time. Many customers expect rapid delivery for their orders. If it takes them days – or even weeks – to receive an order from you, they’ll likely look elsewhere. But, by moving stock to the UK ahead of time, you’re able to get orders out the following day – retaining more customers along the way.
Save tonnes of time
Fulfilling orders is time-consuming, and takes precious resources away from networking, marketing, or even just spending time with loved ones. Once you’ve onboarded with James and James and sent over your stock, we’ll take care of the rest – picking, packing, shipping, and even returns management. You’ll only need to worry about sending more stock after your products have flown off the shelf!
Get industry-leading client support
We understand that expanding overseas is exciting, but can also be daunting. Our fulfillment and logistics experts will support you every step of the way. From advising on the most cost-effective ways to send goods to helping you stay tax compliant, we’re always at the end of the phone should you need a helping hand.
In your first few months with us, you’ll be looked after by our Onboarding Team, whose job it is to ensure the process is as smooth and stress-free as possible.
Want to learn more?
We’d love to hear more about your ambitions to start selling in the UK, and answer any questions you may have. Feel free to fill in our online form and a fulflilment expert will be in touch within 24 hours to begin the conversation.